German multinational corporation (MNC) Staedtler, whose pencils, crayons and pens I grew up using, has returned with the largest online stationery shop.
Half-a-century in-between, when India produced its own stationery, and still does, seems like history.
Expelled in the 1970s, Coca-Cola is back with Pepsi for company.
India imports its confectionery and cosmetics, once treated and taxed as luxury, while making its own. Globalisation has changed last century’s self-reliance concept.
Hordes of foreign investors with their MNC labels are in the huge Indian market. India Inc. having its own MNCs, welcomes foreign MNCs and gains finance and new technology.
A new challenger to this cozy-yet-competitive arrangement has emerged from a totally unconventional quarter. Although confined to producing and marketing consumer goods, it is formidable and growing.
Its promoter, Baba Ramdev, 50, the bare-chested bearded guru has brought yoga to Indian homes with his morning television programmes. Besides those who see yoga as a cure, his followers include powerful politicians, businessmen and Bollywood.
His political activism in the last decade and participation in anti-graft movement has earned him more middle-class fans.
Now, with a government that actively promotes yoga and ayurveda, the Indian indigenous school of medicine, he has extended his business arm, making products from food to fast-moving consumer goods (FMCG).
Patanjali Ayurved that he co-founded in 2006, as yet an unregistered company, has shown revenue worth US$360 million (RM1.4 billion) during the 2014-15 fiscal year.
His business drive both complements and contrasts Prime Minister Narendra Modi’s “Make In India” campaign that is aimed at foreign investors. While the PM woos investors to bring funds and technology, Ramdev is competing with them in a vast market where they have been established for long.
Giving a novel twist to his business operations, he insists he is not doing vyapar (business), but upkar (an act of benevolence). Things foreign, he says, are against Indian culture and environment. His three billion rupee advertising budget aims to take them on.
Ramdev’s organic products strike a chord in Indian homes. His meteoric rise has alarmed foreign producers and their Indian subsidiaries. Patanjali Ayurved undercuts competition. Its toothpaste, for instance, sells for Rs75 (RM4.39) for a 200gm pack compared with the competition that sells for Rs120-plus.
Patanjali has captured 4.5 per cent of the market share of the American Colgate-Palmolive that has been the market leader for decades. Colgate has lost by 60 basis points (100 basis points = 1 percentage point) to 57.3 per cent.
Since Colgate’s October-December quarter results at the end of January, several brokerages have flagged competition from Patanjali Ayurved in the toothpaste segment. They predict Colgate could lose four to 10 per cent of its market share over the next three years.
Last May, the government ordered Swiss MNC Nestle, the largest producer, to withdraw Maggi noodles following laboratory findings that it contained high levels of monosodium glutamate and up to 17 times the permissible limit of lead. Although Maggi is back in the market, with Patanjali’s entry, the going is tough.
There is controversy over safety certification of Patanjali’s noodles. Ramdev denies any wrongdoing, but adds: “My controversy is my strength, not my weakness.”
Apart from toothpastes and noodles, Patanjali Ayurved has also confronted GlaxoSmithKline Consumer, Mondelez and Johnson & Johnson by launching its own health food drinks and baby care products. Based on natural herbs Patanjali products have disrupted that segment as well with a battery of products.
Besides other established Indian competitors, it has dared FMCG giant Hindustan Unilever that aggressively revived its old Ayurveda brand Ayush and acquired new ones last December.
Dabur, another major player in this segment, is modernising its ayurveda portfolio and introducing new products including women’s healthcare and babycare segments.
At the top is Dabur’s bestseller Chyawanprash. A combination of natural herbs, medicines and honey, it is consumed, especially during winters, accounting for 40 per cent of sales.
In a recent report on the Indian consumer segment, Deutsche Bank analysts Manoj Menon and Gaurav Bhatia said on the emergence of Patanjali Ayurved as a serious player: “Its competitors, such as Colgate (toothpaste), Britannia, ITC (biscuits, dairy), Dabur (honey, chyawanprash), Nestle (Maggi, packaged foods), will be starting to take notice of the strong growth delivered by Patanjali and its expansion into new categories.”
In another report, Edelweiss has predicted that Patanjali’s Power Vitawill will provide competition to health food drink companies like Mondelez and GSK Consumer.
It is also planning to launch new products like baby oil, talcum powder, baby soap and shampoo.
Varun Berry, managing director of biscuits giant Britannia, told the Times of India that he had “personally analysed” Patanjali biscuits.
Dabur chief executive Sunil Duggal calls Patanjali a “disruptive force,” adding: “He (Ramdev) is someone no one has dealt with before and there are no existing analogies which can match him.”
Future Group food & FMCG president Devendra Chawla also toured the 150-acre Patanjali Food Park for a “better understanding of the business, since well-heeled consumers are also buying their products”.
Although Patanjali is busy setting up new units across India, the principal nerve centre remains Haridwar in the Himalayan foothills, where Ramdev combines yoga at his ashram with business.
Consumption of ayurveda products cuts across income levels. The big honchos are worried at finding their own family members, particularly the seniors, switching to Patanjali products.
“The advantage it has is that once you buy into the ayurveda philosophy, it’s not restricted to just one product.”
Ramdev and Patanjali Ayurved have filled a credibility gap that herb-based ayurveda products have suffered from. Grown on different soils in varying climatic conditions, they have defied standardisation unlike the Western medical streams. Patanjali may open the doors for ayurveda products at home and abroad.
The savvy spiritual leader combines calisthenics on stage with Bollywood actor Shilpa Shetty and throwing political barbs at his critics. But way ahead of competitors, he is also tying up with hyperlocal delivery startup Pluss to reach his products at doorsteps.
He leads ayurveda’s advent into a globalised world.
Mahendra Ved is NST’s New Delhi
correspondent. He is vice-president of the Commonwealth Journalists Association and a consultant with ‘Power Politics’ magazine