Baba Ramdev’s Patanjali Beats MNCs In TV Advertising; Declared Top FMCG Ad Spender
Baba Ramdev’s Made in India brand Patanjali has been declared as the #1 spender for TV advertisements this week. As per latest data coming in from Broadcast Audience Research Council (BARC), Patanjali’s advertisements appeared 17,000 times between January 23rd and January 29th, beating all traditional FMCG biggies such as HUL, Cadbury and more.
Cadbury was the #2, whose ads appeared 16,000 times.
BARC monitored 450 TV channels across India to churn out this data.
Its not yet confirmed, but some TV analysts are stating that after a long time, an Indian brand, whose manufacturing, distribution and management exists in India, has been able to spend so much advertisement money within a single week. The importance of this development can be gauged from the fact that Patanjali was ranked #6 just a week prior to this ranking.
Out of their 30-product portfolio, Patanjali chose these 7 products for creating an advertisement blitz last week. These are: butter (ghee), shampoo, biscuits, noodles, honey, dental cream and aloe vera cream.
As per SK Tijarawala, who is Patanjali’s spokesperson, this massive advertisement spending was a deliberate strategy to target their most frequent customers, across India.
He said, “We got the first ranking this week also because of all our seven TV commercials were rolled in together this time. We are coming out with seven more products, so there are more ads in the pipeline.”
In fact, unconfirmed reports emerging has hinted that Patanjali is all set to spend Rs 300 crore in the next 6 months, to rigorously promote their FMCG products, and to expand their reach and brand-recall value.
Colgate, Unilever Are Worried
Last week, reports emerged that Patanjali’s products have become so popular that they are now directly snatching away market share of established FMCG czars such as Colgate and Unilever.
In fact, Colgate-Palmolive India has recorded their worst ever performance in the last 44 quarters, and slowest growth in last 6 years, as their share of toothpaste products have been greatly reduced by Patanjali’s own toothpaste product.
Analysts are predicting that Patanjali will turn into a Rs 20,000 crore FMCG company by 2020; and thus, the market share of these existing FMCG biggies would be greatly reduced.
Although Colgate still commands 57.3% market for toothpaste, the sales of Patanjali’s herbal toothpaste is eating into their market share. Colgate has recently introduced a ‘Made in India’ variant with neem tree extracts, which is seen as a desperate attempt to regain their market share from Patanjali.
Several reputed brokerage firms have drastically reduced Colgate’s future growth predictions, as they have stated that Patanjali’s rise will impact share market severely.
Arnab Mitra of Credit Suisse said, “Colgate’s volume growth has seen a significant drop in 2015-16, which is divergent from peers who are seeing steady volume growth. The key reason is the strong traction that Patanjali has gained in the category.”
Percy Panthaki of IIFL Institutional Equities said, “Patanjali has already garnered more than 5% market share and we believe that as general/modern trade distribution ramps up, market share would further increase to 13% by 2019-20. We estimate the highest impact on Colgate as Patanjali is gaining substantial traction in oral care,”
Marico chairman Harsh Mariwala said, “The biggest disruption that has happened in the recent past is Baba Ramdev,”
Deutsche Bank analysts has clearly predicted that the rise of Patanjali will directly impact “its competitors, such as Colgate (toothpaste), Britannia, ITC (biscuits, dairy), Dabur (Honey, chywanprash), Nestle (Maggi, packaged foods) etc., will be starting to take notice of the strong growth delivered by Patanjali and its expansion into new categories.”
Earlier, we had shared how Rs 2000 crore Patanjali will take on Nike and Adidas, besides fighting Horlicks and Bournvita directly. As per Baba Ramdev, who doesn’t own any stake in this venture, they will cross Rs 5000 crore by the time 2016 ends.