Live Issue: Can int’l brands compete in Patanjali’s ayurveda arena?

Colgate Palmolive is about to launch an ayurvedic toothpaste, Cibaca Vedshakti. The market leader in toothpastes said to have over 50 pc share in India had variants under Colgate Herbal, but this quarter’s launch won’t sport the ‘Colgate’ tag.

 

As consumers seek attendant health benefits and choose natural products, Patanjali has reaped the rewards and prompted several others to ride the wave. Toothpaste is but one of the categories in which this has been evidenced. The marketplace also consists of herbal variants from Dabur and Himalaya, which have their own rightful place in the 'nature' products ecosystem. 

 

Ramanujam Sridhar, founder and CEO, Brand-Comm, believes that Colgate's entry into the market is a delayed reaction to Baba Ramdev's Patanjali’s success. 

 

"Normally, MNCs are more comfortable (launching) global products that have done well in other markets. You take products like Surf, Tide, Coke or Pepsi – they're doing well in other markets and it's about launching in another country. This time (Vedshakti's launch) is a reaction to an unexpected phenomenon. They didn't expect the magnitude of impact Baba Ramdev's products had. The success or acceptance has surprised them (MNCs) and showed them an emerging market for health-driven products and maybe they've missed it. A local company may have done it quicker. For an MNC the way they approach, the research is important and it explains their previous long-term successes," he explained.

 

Colgate is making a conscious effort to earn a share of the space through Cibaca, invoking the vedas while doing so. And the branding is reinforcing the perception that when it comes to ayurvedic products, Indian consumers may prefer home-grown brands with some roots in the country's herbal heritage.
 

Jitender Dabas, chief strategy officer, McCann Worldgroup India, believes otherwise. He notes, "It's not about Indian or foreign, it's about having stronger associations for credibility in the space. For example, just being an Indian brand doesn't necessarily mean that you can make better ayurvedic products... unless you are a brand like Dabur which has credentials and heritage in the space. But at the same time, since India is the place of origin of ayurveda, a non-Indian MNC company will always have a bit of an uphill task to establish its credentials in an Indian space of ayurvedic solutions."

 

Jaideep Shergill, co-founder, Pitchfork Partners, believes that it's a matter of perception, and a name like Vedshakti can make consumers believe that the roots are Indian. 

 

He explains, "It's about the product being customised – from the name to the packaging. It's about how it is (going to be) marketed and sold. Today, if you look at entertainment – Star or Colors – they are leading GECs. How many people know they're owned by MNCs? They were never sold to customers as MNCs. Today, housewives think it's an Indian channel. At the end of the day, you look at any category from financial services to entertainment, you'd find such examples. In that sense, Colgate has named it well but whether it works or not time will tell. In theory, what they've done is fine."

 

 

Dhunji Wadia, president, Rediffusion Y&R, adds that there's no real rule when it comes

Does pricing matter?

 

At a recent Kantar Worldpanel briefing, an IMRB representative revealed findings that pointed to Patanjali being bought for its promise of health benefits rather than prices that are a notch below competition. 

 

With Cibaca Vedshakti, the equation is different.  Priced at around Rs 50 for 175 grams, it has a lower entry point than Patanjali’s Dant Kanji, which costs Rs 75 for 200 grams, while Colgate Herbal sells a tube of 200grams for Rs 89.

 

Chlorophyll's Kiran Khalap believes that the price alone won't define success for the brand. He says, "If you look at Patanjali (and its success), it's a mix of the credentials of ayurveda, the product ingredients, rather than the price. Colgate won't attract for price alone. It will come down to Colgate's years in dental care to a natural version. The specific benefit it communicates and how strongly it is a subset of the overall equity in the overall dental care market is important to find out."

 

Sridhar concurs that price doesn't matter in the ‘high involvement’ category, where people are not willing to compromise. “Even middle class parents when it comes to stuff like education, health and the like are going that extra mile to make sure their children don't lose out,” he adds. 

 

McCann’s Dabas too agrees that price doesn’t matter, but adds a rider. He notes, “I don’t think you can lure those people who are buying ayurvedic products (with lower prices), because they find them more effective.  Everything else being equal, only then price will become an advantage." 

 

It isn’t ever about an individual attribute but about the value proposition, contends Wadia. “Once you get that right all other parameters fall in place,” he notes.

 

But when the core value proposition is ayurveda, could credentials make all the difference? Consumers will tell.