The rise, the fall and the rise again of Patanjali

In 2016, Patanjali had almost created a monopoly in India!

Everyone thought they’d beat the likes of Nestlé, HUL, and Dabur

But to their utter SHOCK, Patanjali failed the very next year!

Here’s the rise, the fall and the rise again of Patanjali:

At one point it seemed Patanjali is invincible.

They had everything right from the powerful personal brand of Baba Ramdev to un-breakable trust and distribution.

But its competitors like HUL and Dabur were surprisingly not that concerned.

They understood that Patanjali was making a very rookie mistake.

A lot of people believe that the biggest reason for Patanjali’s failure was shifting the brand from Ayurveda to FMCG,

— but combining Ayurveda and FMCG was exactly their USP.

However, that possibly initiated the phenomenon of BRAND STRETCHING.

See, Patanjali had a strong personal brand attached to Yoga, and combining regular products with Ayurveda was a great sell.

People bought Patanjali more because of this Ayurveda + daily life connection rather than as a replacement for foreign products

But they thought about building upon their Swadeshi recall instead of continuing to focus on the Ayurvedic recall and regulating their product quality.

Don't get us wrong — even Swadeshi is a great sell.

In a deeply patriotic country like India, we love supporting and buying from Indian-origin businesses that source from places that benefit Indians directly.

So, that recall could have done wonders —

only if they could have maintained the quality of the products they are offering, but that clearly didn’t happen.

Patriotism is a strong sentiment, and even if once people feel a company is using this sentiment of theirs just to take advantage of it, the trust pales off.

It's an emotion whose sanctity you need to protect.

Patriotism is not a marketing strategy. And if at any point people find impurity in it or an attempt to use it for the brand’s advantage, there's an instant aversion from the brand.

To be fair to Patanjali, they actually tried maintaining the quality standards, but having so many product lines and BLITZSCALING always has its own problems. They prioritized growing rapidly over growing sustainably.

They didn’t understand that people wanted a replacement for the chemical-backed products & not for foreign products.

They could've played with that narrative for a long time & won.

Instead, Patanjali started focusing on replacing each & every product in your house with theirs.

In many cases, the product wasn’t even a better option when compared to the MNC alternative, but they still tried to sell it.

And that’s how the brand got over-stretched.

Brand stretching is actually beneficial when you use your brand equity to help other product lines grow. But the rule is they have to have the same psycho-sensory recall.

Basically if you’re selling ayurvedic shampoo, then you can definitely stretch to ayurvedic soap and cream.

But the stretching goes too overboard when the same ayurvedic brand also sells you a new kind of Maggi.

There’s a difference between upselling & selling anything randomly without realizing how it dilutes the brand over time.

And this dilution due to over-stretching combined with mismanagement in quality & aggressive, similar kind of marketing leads to what's called BRAND FATIGUE.

But the thing is, all this is done now. Patanjali can’t go back to being the only Ayurveda brand, but they have started concentrating on product rather than the Swadeshi story.

They’ve set up state-of-the-art labs & research facilities, & introduced quality control practices.

They have been looking to fix all the loose ends in the product so that the Ayurveda + FMCG narrative sells again.

And it has been working. Even though the competition is piling on natural products to cut-off Patanjali,

they have the natural advantage of being the one true Indian champion in this segment.

So, no matter how many problems they might have, people will still prefer Patanjali for their truly natural products over any other major FMCG.

The real competition for them is from within.

Multiple Ayurveda companies & start-ups have been slowly eating up the market share, and some of them might scale to become juggernauts.

Patanjali is working hard to gain people’s trust back in this segment.

As for new product launches, that's something that they’ll never stop. For some reason, they have a fixation to be in every segment.

But time and again, the trend has shown that such disconnected umbrella branding doesn’t work.

An Ayurveda + FMCG company selling saaris & sports t-shirts is weird. But they are not giving up on that anytime soon.

But that’s the advantage you have in such a vast market like India.

Even if brand over-stretching has been the cause of the recent fatalities,they can still sell these products in tier 2, 3, 4 where this brand is still relevant and brand fatigue hasn’t kicked in.

Probably that is their new strategy.

In order to make this work, they have increased their distribution network to reach a wider audience.

This article was about the reasons for their decline in 2018-20 and the downfall of their supreme brand image,but the comeback they have been making right now is commendable.

We’ll cover that properly when more clarity and data is available.

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