Patanjali Can’t Be Taken Lightly, Says Harsh Mariwala
.jpg?downsize=1010:568 "Patanjali Can’t Be Taken Lightly, Says Harsh Mariwala")
Patanjali Ayurved Ltd. has ambitious plans to scale up its haircare business. Harsh Mariwala, chairman of Marico Ltd., the market leader in hair oils, says the Baba Ramdev-backed company is not a threat but can't be taken lightly.
Marico will make sure to maintain its share in the hair oil market, he said. Its Parachute, Nihar and, Hair and Care brands together account for 33 percent of the hair oil market, the consumer goods maker had said in its earnings presentation. It has a 58 percent share in the coconut oil category.
Mariwala admitted that Patanjali is succeeding in categories like honey, ghee and even toothpaste. It has gained one-two percent market share in the hair oil category, he said. “We have to make sure that we are able to maintain our market share and they are not able to clip away at it,” he told BloombergQuint in an interview.
Also Read: Small Businesses Worst Hit By GST, Demonetisation, Says Marico's Mariwala
The ayurved products maker targets Rs 2,000 crore revenue from its haircare business, which includes Kesh Kanti-branded shampoo and hair oil, Baba Ramdev recently told BloombergQuint. Its shampoo sales stood at Rs 825 crore in the year to March.
About 55 percent of urban households used the ayurveda company's products as of July, up from 33 percent a year ago, according to a survey by market intelligence company Kantar Worldpanel. About 27 percent of rural India uses Patanjali's products, up from 13 percent a year ago. The company sells its products through 10 lakh stores and targets to double its reach.
Marico and Patanjali also compete in edible oils. Marico's Saffola has a 66 percent share in the super premium category, and sells a one-litre pack of Saffola Active for Rs 155. Patanajali's Kachi Ghani Mustard Oil is priced at Rs 115 a litre.
Also Read: Patanjali Products Now Used By Half Of India's Urban Households
Here are edited excerpts from the conversation.
Patanjali does not compete with you in too many categories. May be one or two. What do you make of this move towards natural Ayurved products and how that is playing out in India?
Firstly, they are present in virtually each and every category of FMCG products. If you look at our basket of products, they are in cooking oil, hair oil, oats, savoury oats. So, to say that they are not competing with us is wrong. Secondly, they seem to be succeeding more in categories where there is a closer fit with their brand, the way it is associated. So think categories like honey, ghee, toothpaste and a few other categories, they have had a much higher market share. In our categories, in hair care they have close to 1-2 percent market share. As of today, if you look at the kind of market share that they are able to gather, it is not too much of a threat. But that doesn't mean that we should take them lightly. We have to ensure that we are able to maintain our market share and they are not able to clip away at our share.
Why did you think that it was the most over hyped brand in the country?
Because it is being talked about a lot whenever you go out socially. Everybody asks about Patanjali. This is one question which comes up again and again. I am not denying that they have done well within a short period of time, but in many sectors they have not really gathered the momentum compared to some other categories where they have done well.
They have been making certain claims which are exaggerated claims. The courts have given a verdict in 2-3 cases against them. Hindustan Unilever, Reckitt, Dabur filed a case against them and all these three parties have won. I am sure, based on these wins, many other players will also not hesitate to file case against them for making exaggerated claims.
Do you have any legal action pending against them?
I don't know. The team has to decide if it is a worthy enough to file a case or not.
Recent research has suggested that the brand haspenetrated about 55 percent of urban households from July, which is up by 33percent a year ago and that rural penetration has doubled to 27 percent. But you aresuggesting that as yet it doesn't pose as much of as a threat.
In certain categories they have done well, especially in ghee, honey, toothpaste and few other ayurvedic categories. But barring that, they have not shaken the current players. Even the market share of 2-3 percent is not that big to create a major impact in thefield.
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