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An Indian yoga guru wants to sell $1.5 billion of soaps, shampoos and ghee this year

Quartz logo Quartz 28-04-2016 Suneera Tandon
Baba Ramdev-Patanjali-India © Provided by Quartz Baba Ramdev-Patanjali-India

Yoga guru-turned-business maverick Ramdev is flexing his muscles to grab a bigger piece of India’s Rs 3.2 trillion fast moving consumer goods pie.

In recent projections, the Rs5,000-crore Patanjali Ayurved has sought to double its revenue to cross Rs10,000 crore (or $1.5 billion) by March 2017. The company sells Ayurvedic or herbal versions of soaps, shampoos, ghee, and face-wash.

“We will invest Rs 1,000 crore to set up five to six processing units in various parts of the country. Besides, we will invest Rs150 crore in research & development,” Ramdev said on April 26. “We are looking at doubling our turnover to Rs10,000 crore in the current fiscal.”

The yoga exponent, who first burst forth on television screens across India in the early 2000s, showcasing quick ways to shed fat and improve immunity, is a household name in India. Patanjali Ayurvedic products were launched in 2007.

Popularity of the products has since risen.


Patanjali is creating a new market for itself

Patanjali to invest Rs 1,150 crore in FY17

Over the past three years, Patanjali has gained clout through word-of-mouth publicity and advertisement blitzkriegs on prime time TV, kindling Indian consumers’ love for indigenous products.

“Patanjali’s differentiators lie in consumer trust in Ayurveda and in group founder—yoga guru Ramdev, its inherent product quality and lower product prices,” suggests an April 2016 report by brokerage firm Religare Securities.

His company’s products, marketed as chemical-free and cheaper, directly compete with brands of large multi-nationals such as Hindustan Unilever, toothpaste-maker Colgate, besides domestic majors like Dabur and Emami.

Despite the brand’s claims, Patanjali’s products have been under the scanner for misleading consumers. Media reports suggest that products claimed to be manufactured by Patanjali were actually being manufactured by external vendors. Ramdev has dismissed such allegations as “politically motivated.”

If past numbers are anything to go by, the company doubled its revenue from Rs 2,006 crore for the year ending March 31 2015, to Rs 5,000 crore for the year ended March 31, 2016. According to a January 22 report by financial services firm India Infoline Ltd (IIFL), Patanjali’s revenues will further swell to Rs20,000 crore by 2020.

The company plans to launch a beauty-care range and kids’ wellness products. Development of an online sales channel is also a work in progress. The company will invest hundreds of crores of rupees on large food-parks that will help it scale procurement of raw materials such as essential herbs.

While the numbers and growth projection alreadyseem overwhelming, the guru apparently has more tricks up his sleeve.

“This,” he told reporters in New Delhi, “is just the beginning.”

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