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Last Updated : Aug 09, 2018 06:47 PM IST | Source: Moneycontrol.com

Patanjali sales slow down; incremental gains in toothpaste, ghee decline: Report

Patanjali’s household penetration had increased from 27 percent to 45 percent in 2017 but the consumers have lapsed out after the novelty factor of the products wore out, according to the report.

 
 
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FMCG company Patanjali is facing a consumer offtake slowdown after growing its turnover nearly five times to Rs 10,000 crore in FY17 from Rs 2,000 crore from FY14. But the FY18 revenue was flat.

Although the company was successful in holding sway over the market in categories like toothpaste and ghee, the incremental gains have declined, according to a Times of India report.

The reduction in incremental gains is much higher in categories where the company’s products were not differentiated, the report says quoting a Credit Suisse note.

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Nielsen data showed that even in categories like hair care the company’s market share growth rate has dropped sharply.

Hindustan Unilever Limited launched a range of ayurvedic products, while Dabur has used strategic pricing to compete with Patanjali.

“The key factors leading to the decline in Patanjali are brand fatigue setting in due to lack of renovation, inability to crack general trade distribution, dilution of the ayurvedic credentials on excessive extension, strong competitive response from large companies with their own ayurvedic offerings, and a sharp drop in advertising spends,” the Credit Suisse report said.

Patanjali’s household penetration had increased from 27 percent to 45 percent in 2017 but the consumers have lapsed out after the novelty factor of the products wore out, according to the report.

“We believe it is a combination of internal factors which are driven by Patanjali’s own strategies and external factors driven by a competitive response which is causing the slowdown in Patanjali,” the report said.

Earlier, Co-Founder Ramdev had claimed the company would see 100 percent year-on-year (YoY) growth every year and eventually overtake HUL.
First Published on Aug 9, 2018 06:47 pm
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