Is This The Genesis Of India’s First Bulge Bracket Consumer Goods MNC?

Baba Ramdev’s Patanjali Brand Growing In India

The global consumer goods space is dominated by western multinational corporations such as Proctor & Gamble and Unilever. These companies have top world renowned brands and strong distribution and sales network across the globe. It is relatively hard to penetrate this space as a result of which Asian companies have not been successful in the consumer goods sector, unlike industrial goods. However, a small known Indian consumer goods company could transform this sector.

Also, read the list of top FMCG Companies in India.

The company Patanjali which was started by yoga guru Baba Ramdev has grown exponentially in the last few years and could give the global giants a run for the money. The company which has created a strong brand for itself in India is set to expand in neighboring countries such as China and Bangladesh. The company not only sells high-quality stuff but also at much cheaper prices than the Unilever. The reason for its low prices is that it does not spend too much on marketing and advertisements which are a major cost center for the western pharma companies. The company which is also not too profit oriented works on low-profit margins as it has more of a social angle than a profit angle.

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Note, there are some Indian companies that have a foreign presence such as Dabur and Godrej, but they do not really have a differentiated business model which could allow them to disrupt the established decades old business model of the western consumer goods majors. Patanjali, on the other hand, has already disrupted the consumer goods industry in India and could replicate it in other countries as well. The success of the company is not certain given that each country has different tastes and preferences. Also, it would not get the solid domestic support it gets because of the Ramdev brand, however its low-cost, high-quality products may capture marketshare from the incumbents.

After giving multinational consumer products makers a run for their money in India, yoga guru Baba Ramdev is taking the fight to overseas markets. To be sure, Patanjali has been exporting to the UK, US, Canada and Mauritius, which are home to large Indian-origin populations, for the past couple of years, but in limited quantities. The company, which sells everything from shampoo and toothpaste to biscuits and noodles, and rice and wheat to honey and ghee, is in talks with both the central and Jharkhand governments to pursue its ambition.

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