Patanjali partners with e-commerce sites to beat FMCG majors

Patanjali Ayurved ties-up with e-commerce sites to sell its wide range of products. The company announced a partnership with major e-retailers Amazon and Flipkart, targeting over Rs. 1,000 crore in sales this year itself.

The partnership includes eight e-retailers Grofers, Shopclues, BigBasket, 1mg, Paytm Mall and Netmeds, through which its entire range of products would be available online.

Additionally, it will also expand into new product segments such as bottled water through brand 'Divya Jal' and apparels and footwear under the brand name 'Paridhan' this year. Patanjali is also expanding its retail network in brick and mortar format and has plans to introduce more products in the value-based small offering targeting rural customers.

The company has around 5,000 exclusive stores and its products are sold at around 15 to 20 lakh retail outlets and this year it has a target of covering 50 lakh outlets. The company had started trial of online sales of its Swadeshi range of products, through its platform www.patanjaliayurved.net on trial basis and got encouraging results as online sales crossed Rs. 10 crore during December itself, highest online sales by any FMCG brand in a month. The company aims to achieve a turnover of Rs. 25,000 crore from the current level of Rs. 10,561 crore.

The FMCG segment contributes around 5 per cent of total e-commerce sales and it has a potential to go beyond 40 per cent by 2021. This push into the e-commerce space will help Patanjali scale up its consumer reach significantly.

We believe this will lead to intense competition for listed players like Dabur, Marico and Hindustan Unilever and this might be the reason why all the stocks were trading lower compare to their previous close on Wednesday.