Is Patanjali actually going to displace traditional biggies from the market, or is it just Baba Ramdev’s charm?

A few days ago, yoga guru Baba Ramdev had taken a direct dig at the rivals of his FMCG firm patanjali, saying, "Patanjali will shut the 'gate' on Colgate. The birds in Nestle's nest (logo) will also fly away."

His confidence has come because of Patanjali achieving the 5000 crore mark, and successfully bringing Ayurveda back into the daily lives of Indians, just the way he had brought Yoga back to the its country of origin many years ago.

And now, Patanjali is all set to overpower traditional FMCG biggies like Hindustan Unilever, Nestle, Marico and Dabur, and we say this basis data and records.

Patanjali has put a dent on these companies in the past four months, and investors think that Ramdev's company will further impact their market share and consumer preferences.

This year, so far, the BSE FMCG index, a gauge of the FMCG stocks on BSE, has already slumped 9%, even though the consumption demand has revived, along with the expectation of good monsoon, which would up rural wages and further support demand growth.

"I think the market is growing. So there is room for everyone, but there will be some give and take in market shares. Patanjali has this ayurvedic halo around it and Baba Ramdev is a great brand," Pradip P Shah, Chairman, IndAsia Fund Advisors, told ET.

"There is a natural feeling that these products are good and the price points are lower compared with the premium products available in the market. There is a great product out there and their distribution and packaging are pretty good," he said.

One might be forced to think that the success of this 10-year old FMCG firm is just because of Baba's charm. Raamdeo Agrawal, Co-Founder & Joint MD of MOFSL, says, "It will definitely take away market shares in some segments. They have a segment where they will thrive. So it is a marketing challenge for the rest of the pack, be it Hindustan Unilever or Colgate or Emami, whosoever is hurt by Patanjali products." However, he also added that, "Patanjali will have some challenges coming in later on product superiority, because one needs to see whether product superiority or just the blind faith in Baba Ramdev's brand equity is driving them"

Some, however, are of the view that the market is big enough for the competitors to survive. "Clearly, Patanjali is making inroads, but that does not mean the Unilevers of the world will fade away. They are astute. They have excellent marketing. They will come out with different products. They will come out with different prices," Pradip P Shah of IndAsia Fund Advisors told ET.

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