Apr 2, 2016

India’s spiritual gurus are the newbie gods of consumer goods

Madhura Karnik
April 1, 2016

India’s consumer goods market is in for some divine intervention as spiritual gurus make a beeline to the profits counter.

After the spectacular success of Patanjali Ayurveda – yoga guru Baba Ramdev’s firm – others are now either entering the sector or aggressively expanding existing businesses.

In February this year, Gurmeet Ram Rahim Singh – the flamboyant leader of Dera Sacha Sauda, a sect in northern India – launched about 150 products, marketed as swadeshi (indigenous) and organic. These products, including rice, pickle, and bottled water, among others, will be sold by MSG All Trading International, a firm owned by the sect.

Another firm, Sri Sri Ayurveda, owned by Sri Sri Ravi Shankar’s Art of Living Foundation, has recently increased marketing and promotion of its products. Launched in 2003, it now plans to expand its reach. SSA wants to increase the number of its franchise stores from the current 600 to 2,700 by 2017, a March 2015 report by broking firm Edelweiss said.

There is more.

The Bochanwasi Shri Akshar Purushottam Swaminarayan Sanstha and Puducherry’s Sri Aurobindo Ashram, too, have entered the FMCG space, the Edelweiss report added. BAPS runs the Swaminarayan temples in India, the US and UK, besides the Akshardham temples in Gujarat and New Delhi.

While most of these organisations have always experimented with Ayurveda – one of the world’s oldest medicinal systems – selling and promoting products on a small scale, they have now begun to think of its retail viability, thanks to Patanjali’s winning streak.

Ramdev’s firm is now a tough competitor to some of the country’s oldest consumer goods players, including Dabur and Emami. It has already eaten into Colgate-Palmolive’s market share in the toothpaste category.

“Post the spectacular initial success of Patanjali, we expect other spiritual gurus also to go the ‘Patanjali way’ in the FMCG space. In particular, we are seeing renewed aggression – mass media, events, more products – from SSA,” the Edelweiss report authored by analysts Abneesh Roy, Pooja Lath, and Tanmay Sharma said.

India’s Ayurvedic products market is set to grow at 15% between 2016 and 2020, according to Nomura, the Japanese brokerage. That gives the new entrants a huge opportunity.

These spiritual gurus already have a huge follower base. SSA can capitalise the over 350 million AOL adherents, including influential politicians, businessmen and actors. Earlier this month, Future Group founder Kishore Biyani said during AOL’sWorld Cultural Festival that he is open to selling SSA products though his retail outlets.

According to Edelweiss, “SSA is riding on brand equity” of its founder Shankar and AOL. Right now, the company sells personal care products, dietary supplements, and food products.

A questionnaire sent by Quartz to SSA remains unanswered.

Delhi-based MSG is affiliated to Dera Sacha Sauda, which has over 50 million global followers, its website says. In a video, the sect’s chief Singh said that his firm’s products will be organic and all the processes will be transparent.

The company will sell its products through teleshopping, online platforms, and mobile apps. CP Arora, an MSG director, told the Press Trust of India that there is already demand from the US, Canada, England, Germany, and Australia.

However, these companies haven’t had a smooth ride. Patanjali products have run into trouble over safety concerns. In December, its desi ghee (clarified butter)was tested for fungus, days after its instant noodle brand was under the scanner for not having the requisite food safety approvals.

Competition heats up

So, should Patanjali, the current star, worry about the sudden influx of me-toos? Not really, according to Deepak Singhal, Patanjali’s chief strategy officer.

“There is no competition as such. These new entrants have a long way to go before they can match Patanjali,” Singhal told Quartz. If anything, he said, they could help spread awareness of natural and Ayurvedic products.

“We have the advantage of originality, they (new firms) are trying to take a piece of the pie,” he said.

Let the divine games begin.

This article first appeared on Quartz.

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After the success of Ramdev's Patanjali Ayurveda, others are eyeing a piece of the pie.Image credit:  IANS, Dibyangshu Sarkar/AFP, Punit Paranjpe/AFP


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