Patanjali shakes up MNCs: The threat is real , Colgate to come up with Vedshakti

The firstpost.com  observes ,the first rumbles in the toothpaste market are being felt with a well known oral care brand, Colgate deciding to come out with a herbal variant. The Economic Times reported that multinational giant Colgate Palmolive is ready with a herbal variant, Cibaca Vedshakti, “an indigenous brand”, to counter Baba Ramdev’s ayurvedic toothpaste, Dant Kanti.

What really made a multinational company that has firmly ingrained itself in the India terra firma for over eight decades to come out with a toothpaste that it claims is an ayurvedic variant now?

Firstpost spoke to brand specialists to find out what does this fledgeling brand have that forced an established MNC to come out with a new product to face the competition.

Baba Ramdev’s Patanjali  has almost 444 products, including 45 types of cosmetic products and 30 types of food products, according to his company website.

The route to success that Baba Ramdev took has been slow and deliberate. He started out with his television shows where his body contortions and vishesh tippanis (tips) got viewers establish a connect with him. And most of these tips were simple easy-to-do remedies. For instance, rubbing your nails together for hair growth, or juicing vegetables – like bottle gourd – that one would not give a second glance to for good health. Baba Ramdev made its effects known without hype or any claim other than it being an ayurveda recipe.

“He is an evangelist but a very good one,” says Alpana Parida, Managing Director, DY Works, a Mumbai-based brand strategy and brand design firm. “Earlier, no one talked of ayurveda or managing illness in a holistic way the way he has and that is where his strength lies,” Parida said.

Ayurveda was not a new word for gen-next Indians. It is a word bandied about for years by brands to differentiate themselves in the crowded marketplace. There are some Indian companies that have touted ayurveda as their differentiator. However, they have not been able to cut the competition apart. Many home-grown brands were able to limp a bit clutching on to ayurveda as a differentiator but soon were trampled in the dust raised by the MNCs.

Patanjali toothpaste Dant Kanti sales are estimated at Rs 450 crore, the ET report stated, and has been able to brush off 1.5 percent of Colgate share in the dental care market.  Harish Bijoor, Founder,  Harish Bijoor Consults, says that when the MNCs rode into the country with their dental care products, they were chemical concoctions which helped form habits in people. When the consumers got bored of the products, then the subtle variations kicked in. Like fluoride toothpastes, for instance. But they all were in the realm of chemicals. Some came in later with Indian variants like neem, tooth powder, etc but they did not catch the attention of consumers like Baba Ramdev’s products did.

Baba Ramdev scored by pulling out the ayurvedic card and made it seem he was privy to some secrets with his deep knowledge of the branch of Indian medicine, says Santosh Desai, Managing Director and CEO, Future Brands. “The idea is that if consumers are open to variants then they are open to ayurveda variants, too. If anyone believes they can compete with Baba Ramdev on this front then they are being optimistic,” says Desai.

Another area that Baba Ramdev scores is with his not in-the-face advertising. There are countless franchisees in small towns and villages with the smiling face of Baba Ramdev that sells his products exclusively. “It is his strong distribution network that has helped,” says Alpana. You get the product from Dindigul in Tamil Nadu to the known markets in Haridwar and Rishikesh to a small out-of-the way area in a village in the interiors of Maharashtra.

The distribution network is only 4 percent of the total market category. “He has worked up the MNCs with only 4 percent of the distribution network. Just think what would happen if Baba Ramdev were to double this to 8 percent,” says Bijoor.

It was only a matter of time that the saturation in the Indian market led consumers to accept a different player. When that player was known through TV channels in their homes, the offerings became believable. Also, word-of-mouth publicity after using the products have also helped. “The difference in pricing alone cannot be a major contributor to the acceptance of a product,” points out Dham.  That can’t be the reason for Patanjali Ayuved’s Dant Kanti to displace 16 well-known brands in the market, says Bijoor.

Word-of-mouth publicity for the efficacy of Patanjali Ayurved products has led to repeat buys. “The repeat buy is the fear factor for the MNCs,” says Bijoor. He believes that competition has trifurcated – from MNCs of yore to Indian MNCs like Dabur and ITC to a third formation with the rise of baba cool companies like Baba Ramdev’s, Baba Rahim’s and Sri Sri Ravi Shankar.  “The Baba cool companies will take a chunk off each of the former two and be a real threat to both,” says Bijoor.

Firstpost.com further analyses : Colgate may be the first mover now in the ayurvedic turf among the MNCs. Soon there might be others who will paint themselves with Indian colours. Or someone will come with fruit flavor variants of toothpastes. Who knows?! But it is not like Baba Ramdev will be able to outclass the competition in all the categories he is present in. He may have an advantage over malted drinks, biscuits, cookies but not in noodles, say some analysts. Noodles can’t be ayurveda after all!

Read other related stories : The Economic Times, IndiaTV, FirstPost.

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