Patanjali Ayurved, started in 2006 by the famous Yoga Guru Baba Ramdev, has seen a meteoric rise in the past few years with revenues of ?5,000 crore in FY16 from ?450 crore in FY12. While Patanjali’s combination of low prices, ‘natural and pure’ proposition and ‘swadeshi’ positioning are widely acknowledged to be the reasons behind success, what is not that well known is the critical role played by Patanjali’s path-breaking sales and distribution strategy in driving this exceptional growth trajectory.
Patanjali can offer low prices to consumers due to very low selling, administrative and general costs at 2.5 per cent of revenues. Advertising spend in FY 16 at 6 per cent is also well below the peer set. Critically, it has kept retail margins at half or lower levels as compared to competition. The focus of the article is to demystify how Patanjali scaled up distribution in an intensely competitive retail FMCG environment in India despite low retail and A&P spends.............Read more
Source: The BusinessLine