Hindustan Unilever Ltd. (HUL) revived its Ayurvedic brand Lever Ayush in 2016 by launching 20 new affordable personal care products aimed at mass-market consumers, in an effort to compete with the rising presence of Patanjali Ayurved. While Ayush aims to establish itself as an authentic Ayurvedic brand with notable advertising campaigns and a strong distribution network, analysts caution that it faces significant challenges due to Patanjali's established brand loyalty and market presence. Despite Ayush's initial growth post-relaunch, its long-term success against Patanjali and establishing itself as a market leader in India's Ayurvedic products remains uncertain.

1. Case Study
In December 2016, fast-moving consumer goods (FMCG) giant Hindustan Unilever Ltd
(HUL) revived its ayurveda brand, Lever Ayush (Ayush), and launched 20 new personal care
products. The products, priced between ₹30 and ₹130, were targeted at the mass market,
helping Ayush shed its premium tag. The move was aimed at bolstering the company’s
personal care portfolio, apart from enhancing its competitive strength in the fast-growing
Ayurvedic space.
Ayush’s new tagline Sahi Ayurveda (True Ayurveda) was expected to position the brand as
an authentic ayurvedic brand. To support this, HUL launched a new series of Ayush ads
which sought to educate customers that not all products that claimed to be ayurvedic were
genuine. For the relaunch campaign that was run across various media, HUL roped in actors
Akshay Kumar as the lead brand ambassador and Tamanna as the brand ambassador for
products targeted at women. HUL also partnered with one of the leading institutions
propagating the science of ayurveda — Arya Vaidya Pharmacy — to develop its new
products.
Disruption in the sector
HUL is the Indian subsidiary of one of the world’s largest consumer goods companies,
Unilever N.V. Established in 1933, HUL has for long been the market leader in the FMCG
sector. The company had launched Ayush in 2001 but, by 2006, the brand had lost
momentum in the market. This prompted HUL to push it to the sidelines.

2. In the meantime, Baba Ramdev, a yoga guru with a keen interest in ayurveda — along with a
close associate, Acharya Balkrishna — set up Patanjali Ayurved Ltd. (Patanjali), which
offered a range of ayurvedic consumer products. Patanjali was credited with rejuvenating the
market for ayurvedic products and with disrupting the Indian FMCG sector, ultimately eating
into the market share of such major incumbents as HUL and Procter and Gamble. By 2017,
Patanjali’s revenues had risen to ₹10,000 crore and the company became a serious competitor
for HUL, which had revenues of over ₹30,000 crore. Patanjali had set itself an ambitious
target of achieving ₹50,000 crore in revenues by 2020. Its stupendous success pushed HUL to
rethink its strategy in the Ayurvedic space.
A real challenge to Patanjali?
Industry observers have said it is not the first time that HUL has had to take on a tough local
challenger. In the 1980s, the company had to contend with Nirma, a new detergent brand that
targeted lower and middle class consumers, which ultimately toppled the Lever brand Surf
from the position of market leader. However, Hindustan Lever Ltd, as the company was then
known, made a comeback with its own low-priced contender Wheel, which helped the
company regain its lost market.
This time, though, analysts say that even with HUL’s strong backing, Ayush might find it
difficult to make a mark, given the highly competitive ayurvedic market in the country and
Patanjali’s strong brand image.
Analysts also point out that within the last decade, the ayurvedic products space has
expanded immensely due to the rise in awareness of the benefits offered by Ayurvedic
products. The natural, herbal, and ayurvedic products categories (collectively called the
‘naturals’ category) had grown over the years to account for a whopping 41 per cent of
India’s personal care products market. The category not only boasts of FMCG giants and
Indian players, but also a slew of small but popular brands. Between 2016 and 2021, the
ayurvedic products market is expected to grow at a CAGR of 16 per cent, prompting
companies to formulate strategies to tap this market.
However, some analysts say that Ayush is only brand with the potential to stand up to
Patanjali. They say that after Patanjali, Ayush is the only ayurvedic brand with a wide
product portfolio encompassing toothpastes, soaps, face-washes, face-creams, shampoos, and
hand-washes. Moreover, unlike Patanjali, HUL has had a presence in the premium ayurvedic
segment with its Indulekha brand which enjoys strong market appeal.
With a bid to further strengthen its position in the naturals category, HUL also reintroduced
its 33-year-old Citra brand in India. The company also launched variants of Naturals in
popular brands such as Tresemme Botanique and Clinic Plus Ayurveda.
Distribution, product quality
Moreover, HUL has a robust distribution system, spread across the length and breadth of the
country, with a network of around eight million outlets — the kind of reach Patanjali is still
aspiring to achieve. While HUL has strong manufacturing capabilities, Patanjali has struggled

3. with supply chain problems and the huge gap between supply and demand, losing customers
in the process.
Patanjali has also had its share of product quality-related issues from time to time. For
instance, in May 2017, Haridwar’s Ayurveda and Unani Office found some of Patanjali’s
Ayurveda products to be of sub-standard quality.
However, analysts say that Patanjali has certain distinct advantages in its distribution
network, which includes three types of ayurveda clinics (Arogya Kendra, Chikitsalaya and
Swadeshi Kendras), which account for a large part of its sales. Patanjali employs trained
ayurveda practitioners at the clinics who dispense its products. The clinics serve as customer
touchpoints, which help in word-of-mouth advocacy and promotion of new products.
Unlike Ayush, Patanjali has a strong brand identity and enjoys immense customer loyalty.
Analysts say that Patanjali’s association with ayurveda proponent Baba Ramdev has created
in consumers a firm belief in the efficacy of the company’s products. Moreover, Patanjali has
been spending heavily on advertising in order to be on a par with the ad spend of FMCG
leaders. It advertises its products as Swadeshi (native) and often hits out at foreign FMCG
giants. Over the years, HUL has found its brands being targeted by Patanjali ads that
questioned their efficacy.
The road ahead
While Patanjali has created a dominant position for itself in the Indian ayurvedic space,
experts say that Ayush has yet to gain customer acceptance and that the company failed to
adequately advertise its association with Arya Vaidya Pharmacy which, they believe, could
have boosted consumer confidence in its products.
However, according to HUL, within six months of the re-launch of Ayush, the brand had
witnessed growth. The company said it was pleased with its performance. But whether it will
be able to wrest market share from Patanjali and establish Ayush as a market leader in the
country’s ayurvedic supplements and personal care space, remains to be seen.
The Questions
If you were a Marketing Manager at Lever Ayush charged with making Ayush the market
leader in the Indian Ayurvedic space,
1. How would you create a market for Ayush?
2. What strategy would you adopt to take on the Patanjali brand, given its strong association
with yoga guru Baba Ramdev and marketed on the Swadeshi plank?
3. How would you promote Ayush? What would your advertising message be?