After surviving the Patanjali storm in the cities, Dabur dons an aggressive avatar to defend its rural turf. It’s a battle between ayurveda based on science versus healing hinged on faith.
It took Dabur five quarters—a good 15 months—to realise that ayurveda hinged on ‘faith’ was getting the better of the one based on ‘science’. Patanjali, an ayurvedic upstart backed by maverick yoga guru Ramdev, had disrupted the fast-moving consumer goods (FMCG) market in early 2015. The bunch that first felt the heat were the multinational giants (MNCs) led by Hindustan Unilever and Colgate, who were vilified by Ramdev as a ‘foreign evil’ exploiting the country.
For Dabur, the fifth-largest FMCG company by revenue in India, the first vestige of a threat was in branded honey, a relatively small (worth 1,100 crore) category but core to the Dabur portfolio. In a first in over two decades, sales dipped by 8.50 percent in the first quarter of 2017 fiscal over the previous year’s corresponding period. For a company used to robust double-digit sales growth in this category, the decline came as a bolt from the blue.
“Our competitor was selling honey at a price 30-40 percent lower than ours,” recalls Sunil Duggal, a Dabur veteran who took over as CEO in 2002. “We erred in our thinking that these disruptive forces were of short duration.”
For the next four quarters, honey sales kept sliding, slowly but surely eroding Dabur’s dominant market share of 60 percent; it reached a new low of 40 percent. To make matters worse, the volume market share of Dabur’s flagship Chyawanprash brand also fell by almost 2 percent— from 58.9 percent in October-November 2015 to 57 percent during the same period in 2016.
Clearly, something was wrong somewhere. In Dabur’s case it was its obsession with the bottom line. “We were concentrating more on protecting profit and had adopted a somewhat defensive posture towards disruptive competition,” Duggal recounts. This, he adds, was only encouraging the competition to get more disruptive.
Denne historien er fra November 9, 2018-utgaven av Forbes India.
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Denne historien er fra November 9, 2018-utgaven av Forbes India.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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