Abstract

The case discusses the emergence of India-based Patanjali Ayurved Limited (Patanjali) as one of the strong companies in the Indian FMCG sector, posing a threat not only to Indian fast moving consumer goods (FMCG) companies but also to large multinational FMCG companies. The case traces the journey of Patanjali from a small pharmacy called ‘Divya Pharmacy’ incorporated in 1997 by yoga guru Baba Ramdev and Ayurveda expert Acharya Balkrishna (Balkrishna), to a company that garnered revenues of US$ 370 million for the year ending March 2015. In 2006, Patanjali was incorporated to sell ayruvedic medicines and over-the-counter products. It also started selling products like wheat flour, clarified butter, and juices made of Indian gooseberry and aloe vera. Patanjali was quick to expand in the market, launching several products that were of high quality, priced competitively, and reflected the Indian ethos. These products were initially distributed to the small clinics that Patanjali had established. Patanjali slowly started distributing its products through small mom and pop stores, and by 2012, emerged as the fastest growing consumer products brand. By 2015, analysts were starting to opine that Patanjali could well be on its way to changing the dynamics of the FMCG market in India.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the impact of multinational FMCG companies on Indian retail
• Learn about the unique aspects of the FMCG market in India and understand its dynamics
• Study the strategies to be adopted by local companies in an emerging market where MNCs are well entrenched
• Explore the future strategies that domestic companies can adopt to consolidate their presence in the highly competitive Indian FMCG market

Keywords

Patanjali, ayurvedic products, managing in developing countries, companies from emerging markets, opportunities in emerging markets, FMCG, competition, product development, pricing, distribution, new product development and branding