Major Reasons Why Patanjali Saw The Downfall In 2018

Factors Behind Decline In Patanjali's Sales

The year 2018 has witnessed many ups and downs in the entrepreneurial ecosystem. While many businesses have registered huge profits, few have seen downhill.

One of the leading FMCG brands in India, Patanjali Ayurveda, has recorded a dip in its sales this year. The Brain-child of Baba Ramdev, Patanjali has been consumer’s favourite due to its affordability, use of natural & organic ingredients and its make in India factor.

Once a major disrupter in the FMCG sector, Patanjali has gone through slow sales this year. According to a report, 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 an excessive extension, strong competitive response from large companies with their own ayurvedic offerings, and a sharp drop in advertising spends.

Let’s take a detailed look at the potential reasons which have hampered Patanjali’s profits in 2018.

Ignoring Competition

Patanjali was the torch-bearer of natural and organic products in Indian Market, contributing to its humungous success.

After witnessing Patanjali’s success and the potential of organic product industry, the rival companies mostly multinationals started rolling out their own variant of the natural and herbal product.

Thus, Patanjali soon faced increased competition with many rivals, which largely affected their sales.

Lack of Innovation

Businesses refusing to change with time will face inevitable failure. In today’s competitive market, renovation is the key to maintain your brand position and drive sales.

Another reason behind Patanjali’s decline in turnover was primarily because of the company’s inability to timely adapt to the GST regime and develop infrastructure and supply chain.

Poor Management

After garnering huge popularity among consumers, Patanjali ventured into many other sectors besides FMCG. With such aggressive expansion, it became difficult to manage all the business verticals and ensure quality. As a result, various quality issues emerged leading to declining in the sales. Patanjali’s failure to keep up with consumer expectations led to losing their brand position among consumers.

The company appointed separate distributors for different business verticals such as staples, personal care and biscuits among others, which created an issue in service levels.

Lack of Advertising

Many companies tend to focus more on marketing during the launch of their business. Consistent and continuous marketing is important for the growth of your business. The effectiveness of a marketing campaign determines the sales of a product. The growth slowdown in Patanjali is a direct result of poor management of trade channels and lack of a coherent advertising strategy.