The Baba Ramdev-backed FMCG company has been insightful and disruptive in its marketing strategy
In a chat with ET Now, Ashish Bhasin, VP, chairman and CEO South Asia, Dentsu Aegis Network and VP of AAAI India explains why Patanjali is old wine in new bottle with a difference. Excerpts:
ET Now: Do you think that the likes of Colgate and Nesle will also milk Patanjali's brand pull strategy?
AshishBhasin: Almost certainly. I think there are two phenomena that are working in the case of Patanjali.
Firstly, as a country we have a very positive inclination towards natural products. For example, when we fall ill, we all go back to our grandmothers' recipes, mothers things, etc. This is a very inherent insight of Indian culture which Patanjali has gotten on to.
Now that Patanjali has opened up the gates, there is no reason why a Hindustan Lever or a Procter & Gamble or a Dabur or a Marico will not take advantage of it. And indeed, Colgate.
I think Patanjali has done very well. They have scaled up at a phenomenal pace. The challenge is now what they do when more and more players enter and start capitalising on the trend — how they keep refreshing their brands.
Distribution is going to be key because beyond a point they will not be able to rely only upon their own franchise stores. India has more than 6,25,000 villages. So, if you have to reach everywhere you have got to use the existing retail supply chain. Whether or not are they able to make that jump will be very critical in their scaling up.
I feel the multinationals and other players in the FMCG area will actually gain from this, because a very big segment has been opened up. An insight which was inherently lying hidden is now open for all to tap.
ET Now: If Patanjali is old wine in new bottle, what is it that they've done right that the Daburs and the Maricos couldn't do for years?
Ashish Bhasin: This insight was always there — it is probably 5,000 years old. It's just that there was a latent consumer need and Patanjali has been able to capitalise on that at the right price point.
It is not the first time in history that it is happening. There are other similar analogies. Unilever used to sell Surf at Rs 30/kilo. Nirma launched at Rs 8-9/kilo. Unilever thought that Nirma was never going to succeed, but there was a market for a low-priced product.
The most important point is that one that segment opens up, it also opens the eyes of the other players. It has happened in other segments and other categories as well. There are latent needs lying there and nobody is capitalising upon it, and suddenly a player comes in and disrupts in in whole. In Nirma's case it was Karsanbhai, now it is Patanjali.
You are right when you say it's just old wine in new bottle. But is that not what insights are all about? You figure out the deep consumer insights, you figure out if there is a need and you try and satisfy it at the right price point.
I think Patanjali has done a good job of it. But I also think they have actually opened up a completely new category. If I were a Unilever or a Marico or an ITC, I would actually see this is as a big opportunity for the medium to long term rather than as an threat in the short term.