Patanjali Ayurved Ltd, the hottest company in India’s consumer products markets, is in talks with Amazon, Flipkart, and BigBasket, among others, to stitch partnerships that will help it grow its sales on the internet.
“Some of the discussions are in the early stages, and will take some time to mature. We are talking to all these companies to see how we can partner with them to grow our business,” said Acharya Balkrishna, managing director of Patanjali. Balkrishna is no newbie to the internet. He has 5.2 million likes on his Facebook page and over 50,000 followers to his Twitter handle.
Patanjali already sells online through its site www.patanjaliayurved.net, but wants the power of ecommerce platforms behind it. “This year, we will focus on ecommerce as one of the growth drivers,” Ramdev Baba, the guru behind the Patanjali yoga-to-media-to-consumer goods empire, had told reporters at the company’s annual press conference on May 4 in New Delhi.
“Some of the discussions are in the early stages, and will take some time to mature. We are talking to all these companies to see how we can partner with them to grow our business” — Acharya Balkrishna, managing director of Patanjali
Ramdev’s target for Patanjali is to double revenues to Rs 20,000 crore by 2017-18, for which the scale and reach of ecommerce is essential. About 10% to 15% of Patanjali’s revenues this year will come from ecommerce, sources say, amounting to Rs 2,000 crore to Rs 3,000 crore and making it among the top brands that sell online in India.
To put things in context, Patanjali is already perhaps India’s second largest homegrown consumer goods company, second only to ITC, and is within striking distance of market leader Hindustan Unilever. Dabur India had revenues of Rs 7,680 crore in the financial year 2016-17. Nestle India’s revenue was Rs 9,223.80 crore in 2016. In 2016-17, Colgate-Palmolive (India) reported net sales of Rs 4,490 crore and Hindustan Unilever revenue of Rs 31,987 crore.
About 10% to 15% of Patanjali’s revenues this year will come from ecommerce, sources say, amounting to Rs 2,000 crore to Rs 3,000 crore and making it among the top brands that sell online in India
While most of these brands have some presence in ecommerce, Patanjali plans to open exclusive stores online on each of these platforms. “We are working on those lines, but it’s not yet finalised,” said Balkrishna.
Indian ecommerce has topped $20 billion in sales. While it is a small fraction of the overall Indian retail market, which accounts for nearly $700 billion in sales, ecommerce as a segment is growing fast.
It is important to have a presence in this space, explains Balkrishna. “Ecommerce is becoming an important channel, and we don’t want to miss the opportunity to address customers needs online. We will work on the logistics and make the experience better for our customers.”
In food and groceries, “online penetration was 0.03% in 2014, but we expect this to increase to 2.9% in 2020, partly led by the large general merchandise players also entering this category,” wrote Morgan Stanley in its report.
Patanjali is also eying the global market through partnerships with ecommerce companies. In November, sources told this writer that Amazon was in talks with Patanjali to take its product portfolio to the US, UK, and some other countries. Patanjali products are available on Amazon.com, the US retailer site, they are sold through sellers in that market, not directly by Patanjali.
Patanjali is also eying the global market through partnerships with ecommerce companies. In November, sources told this writer that Amazon was in talks with Patanjali to take its product portfolio to the US, UK, and some other countries
Taking Indian brands abroad is one of Amazon’s focus. It has tied up with Amul to list products such as ghee and sweets on its global store platform. It is also in talks with Fab India, Biba, Hindware and Organic India.
A request for comment to Amazon India on Patanjali’s talks with it did not yield any answers. Flipkart, too, did not comment;
“No comments on the story,” a spokesperson said on email. Flipkart’s CEO Kalyan Krishnamurthy had said earlier that the company is actively looking at the grocery space
. It has already started listing grocery products on its platform.
BigBasket, too, did not comment on the development.
Updated at 12.50 pm on May 22 to change the lead image.