After repeatedly touting ‘swadeshi’ as its calling card and railing against multi-national corporations (MNCs), Baba Ramdev-led Patanjali Ayurved Ltd (PAL) is reportedly contemplating opening its doors to global brands after facing stiff competition from MNCs in the consumer segment.
The development is noteworthy as the company has always positioned itself as the champion of swadeshi products opposing the monopoly of MNCs in the country.
Earlier, reports suggested that the Haridwar-based company’s sales volume has shrunk in cities, and in rural areas, its sales volume growth dropped to a third even as the overall market for natural products continues to grow. It is worth noting that the home-grown company has interests in businesses such as food, consumer packaged goods and healthcare.
“We have three-four offers from global companies who are keen to do international deals with Patanjali. We are not averse to working with multinationals, as long as it doesn’t clash with our values. We aren’t rejecting them just because they are MNCs. We are looking at the offers,” Acharya Balkrishna, CEO of Patanjali, told a leading business daily.
Balkrishna declined to divulge any name that has approached Patanjali. French luxury group LVMH had earlier wanted to buy stakes in Patanjali. The exponential growth of Patanjali had made its competitors such as Hindustan Unilever Ltd (HUL), Colgate Palmolive, Dabur revamp their ayurvedic products.
Between July 2018 and July 2019, Patanjali has lost market shares across its main segments, including detergents, soaps, hair care, and noodles while FMCG major HUL has relaunched its ayurvedic products in several categories. Patanjali has gained share only in toothpastes, according to the financial daily which cited market research firm Nielsen data.
Earlier Patanjali was also accused of overlooking quality checks for its products. Several of its products were pulled up by the Food Safety Standards Authority Of India for failing quality tests. A failed attempt at launching a ‘Swadeshi’ Whatsapp rival called Kimbho also added to the brand losing credibility.
The home-grown FMCG major’s CEO blamed the dip in market share to trade disruptions after the rollout of goods & services tax (GST) in July 2017. “The GST rollout had a big impact on our operations; it took us time to align our trade, supply and distribution channels to GST. But now we are bouncing back, and results have started to show this quarter onwards,” the publication quoted him as saying.
Balkrishna revealed that the company is currently not planning to foray into new segments or expansion of its retail network till it recaptures lost ground. The company’s sales declined 10 per cent to Rs 8,135 crore in FY18.
Worth mentioning here is that Patanjali Ayurved in January 2018 entered into e-commerce space for its FMCG items, partnering with major players such as Amazon and Flipkart.