Baba Ramdev’s Patanjali Can Pose a Threat to Dabur, Marico

DoThe Best
By DoThe Best October 13, 2015 12:39

Baba Ramdev’s Patanjali Can Pose a Threat to Dabur, Marico

Baba Ramdev-promoted Patanjali Ayurved can pose a threat to homegrown consumer goods companies that focus on natural products, Suruchi Jain, equity research analyst at Morningstar India told NDTV.

“For homegrown companies that focus on natural products like Dabur and Marico, this can definitely pose an important development and a threat,” she said.

The development Ms Jain was speaking of was Future Group entering into a partnership with Baba Ramdev’s Patanjali Ayurved. On Friday, the two entities announced a pact to sell Patanjali’s FMCG (fast moving consumer goods) products through Future Group’s stores with plans for joint manufacturing in future.

However, Baba Ramdev’s Patanjali products are unlikely to change the dynamics in the overall FMCG pie as large players like ITC, HUL, Godrej, Dabur, Marico have a strong brand recall and customers are willing to pay a premium for the products, she said.

“Now unless there is a niche that Patanjali picks up among the entire FMCG space, if perhaps in that particular niche product they could gain significant share (then the overall pie may see a shift) but in terms of the overall pie… I doubt that the dynamics will change significantly.” (Watch the full interview)

Ayurvedic, natural and organic products are niche markets, and don’t end up forming the majority part of the pie, she explained.

For Patanjali the play would lie with consumers who prefer natural, non-chemical products – where Dabur and Marico are existing players.

Patanjali’s range of FMCG products, including staples, nutrition, hair care, skin care, dental care and toiletries, will be sold through Future Group’s Big Bazaar, KB’s and EasyDay outlets across India, according to the deal.

Baba Ramdev has said that Patanjali is also planning to launch products like pasta, oats, juices and muesli soon and is targeting to achieve Rs 5,000 crore turnover this fiscal. Patanjali is due to launch its range of instant noodles this week.

DoThe Best
By DoThe Best October 13, 2015 12:39
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