What ails Baba Ramdev's Patanjali Ayurved? According to a recent IIFL report, sales of Patanjali products have halved from two year earlier levels.
After clocking in sales of Rs 120 billion in financial year 2017 – 18 (FY18), Baba Ramdev – led Patanjali Group could now enter the slow lane. According to a recent IIFL report co-authored by Percy Panthaki, Avi Mehta and Sameer Gupta, sales of Patanjali products have halved from two year earlier levels. The report, based on on-ground channel checks in Mumbai, suggests the development, could prove to be a boon for listed players like Dabur and Colgate Palmolive (India). “Dabur is expected to benefit in categories such as oral care and hair care. We have already witnessed market share in honey rebound to earlier levels for the company. In other personal care categories, Patanjali sales were never material, but in these categories, Patanjali may have witnessed a decline and hence positive for the FMCG space in general,” the report says. From humble beginning as a pharmacy in 1997, Patanjali has forayed into core FMCG products like toothpaste, shampoos, cornflakes and instant noodles over the past 20 years. Recently, it announced a foray into the dairy segment by launching milk and milk-based products, including curd and cheese, targeting sales worth Rs 10 billion from the segment. Here are five key issues that Patanjali is grappling with, according to IIFL: Distribution system Splitting distribution by product vertical has created an unwieldy system with poor servicing levels, says the IIFL report. That apart, the ordering process has become more complicated now. Gaps in timely servicing have resulted in an increase in the frequency of stock outs in certain categories, which has eventually led to the retailer not keeping that product at all. Read More On →Patanjali Ayurved