OdishaPlus Bureau
Three years ago, Indian yoga guru and entrepreneur Baba Ramdev was riding high. The fast moving consumer goods (FMCG) empire he co-founded had tapped into a wave of Hindu nationalism after the election of Prime Minister Narendra Modi in 2014. Customers were snapping up Patanjali Ayurved’s affordable, Indian-made products such as coconut oil and ayurvedic remedies. It actually became a threat to foreign companies in India.
“Turnover figures will force multinational companies to go for kapalbhati,” saffron-robed Ramdev declared in 2017. The yoga guru had said sales would be more than double to 200 billion rupees in the year to March 2018. But instead Patanjali’s sales have plunged to 81 billion rupees, according to its annual financial report.
According to analysts and company sources, it deteriorated further in the last fiscal year. Provisional data indicated sales of just 47 billion rupees in the nine months from April- December.
From current and former employees to suppliers, distributors, store managers, and consumers, everybody is of the same opinion that Patanjali’s ambitions have been tottered by several mistakes.
One big lacunae is that Patanjali’s products and their qualities are not consistent because the company expanded very quickly. The company however says its rapid expansion did bring some teething problems, but those problems had been overcome. Patanjali also suffered, like many others, due to demonetization of 2016 and GST of 2017. The move disrupted Patanjali’s sales.
According to figures, Patanjali has 3,500 distributors that supply some 47,000 retail counters across India. Patanjali shops, mostly popular with rural Indians rising into the middle class, sell snacks like mango candy or ayurvedic remedies promising to cure joint pain.
One big lacunae is that Patanjali’s products and their qualities are not consistent because the company expanded very quickly.
Ramdev has been the public face of Patanjali since it was set up in 2006 and remains its brand ambassador. But the company is owned by his business partner Acharya Balkrishna, who met Ramdev at a Sanskrit school three decades ago and holds 98.55 per cent of Patanjali’s shares, according to a return filed by the company in 2018.
The 46-year-old Balkrishna, whose net worth Forbes puts at $4.9 billion, brushed aside concerns about the company’s health. “We suddenly expanded, we started three-four new units, and so problems were expected. We have solved that network problem,” said Balkrishna, referring to supply chain issues that affected deliveries.
According to one ex-employee, problems include not having long-term deals with transporters, which complicated planning and increased costs. Patanjali executives also lacked the software needed to effectively track sales.