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Patanjali not to increase ad spend, TV to take back seat

The company has decided to keep its advertising budget stagnant at Rs 550-600 crore for the next fiscal with a 360-degree communication where mediums such as digital and outdoor would get prominence at the cost of TV

In a move that could be disappointing for TV channels, especially the Hindi news genre, Patanjali Ayurveda – one of the leading TV advertisers in the FMCG category – has decided to increase focus on other mediums to reach out to its consumers.

Patanjali, that currently gives significant weightage to TV in its ad budget, has decided to keep its ad spend stagnant at Rs 570 crore in the next fiscal as well with mediums other than TV getting a larger share.

“We will spend the same Rs 500-600 crore. But we will add various other media tools, which were not being used earlier, to make it a 360-degree communication. We will focus on digital and social media, outdoor and research. The money will be diverted to these platforms," SK Tijarawala, spokesperson, Patanjali Ayurveda said.

The Baba Ramdev-led company had set a target of doubling its revenue to Rs 20,000 crore in the current fiscal. The company, however, is unlikely to meet its target. Also, as not many launches have been lined up, the company's advertising requirement would be not as high in the coming year.

Tijarawala said, “Obviously, the pressure on advertising has reduced. Last year, we had introduced a lot of new products and launches and we were required to communicate more. We don’t advertise or communicate to promote. We only create awareness, passing on the information which is of use and benefits consumers. Now, once we have already passed that information to the market, there is no need to repeat it much. Hence, the need and pressure to advertise has lowered. Despite that, we will continue with the pace of strengthening our product portfolios. Henceforth, the same pace and intensity of advertising will continue.”

Asked if GST had hit the company's revenue target, he said, "This is a transitional and transformational phase where the systematic and infrastructural mindset in the market has changed. The transactional behaviour in the retail market, the monetary transactional system, infrastructure and modus operandi have all changed. In this transitional phase, there will be some hiccups, but it is good for the economy, nation and countrymen.”

He explained, “If you look closely, this financial year gave us the practical working (operational) time of only 10 months. Two months got invested into transition and restructuring. We were always going against the high tide. We have kept the pace but because of these changes, there was a marginal slowdown.”

The GST rollout on July 1 posed as a major setback to almost all the consumer industries. For Patanjali, urban and semi-urban were always strong markets, while rural was strengthening slowly. Tijarawala believes, “The rural and lower strata of the society were not ready for the changes, and that is why possibly it is taking more than the expected time.”

The company is now expecting that the launch of the diapers and sanitary napkins category would push its revenue. Patanjali is planning a major advertising campaign around this product category.

“This will also require advertising. A social angle to this is that 40% of women still don’t have access to sanitary napkins, which is a sad situation. We take it as our duty to provide them with the economic range of our products,” said Tijawarala.

There has been a lot of talk about how Patanjali products are taking a back seat in the traditional pharmaceutical, general and retail stores. When asked about the reason, Tijarawala explained the five-pronged sales strategy of the company.

Patanjali started off with having only exclusive Patanjali Chikitsalay and Aarogya Kendras. Later on, they launched exclusive supermarket stores – Patanjali Mega Stores, which are still very few in the country. Then on, the tie-ups with the big retail giants started and it entered the modern trade outlets – Big Bazaar, Reliance Fresh and others. The availability of the products in the open market, retail markets, including pharmaceuticals and other general stores, came in next, followed by e-commerce platforms.

Tijarawala said, “With this expansion, the correction phase is running parallel. At some places, it is losing while at some others it is gaining sales momentum. It cannot be said that the demand has decreased.”

Among the many categories where the company has ventured, spices have brought success while Dantkanti remains the leader in their portfolio after cow ghee. “More than the products, we had made the entire FMCG industry and all other companies too to deliver better to the consumers – in terms of the quality and pricing. That’s how the mindset and consumer psyche has been changed. The people are now asking for healthier products,” said Tijarawala.

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