Consider India, we Indians generally eat red apples. The reason behind not eating green apples is that it is not available at all the places in the market. Though red apple and green apple differs in colour but there are some added advantages in green apple in terms of vitamins or fibre. Now consider a company who wants to roll out green apples in Indian market. What will they do? They will launch opposite of red apples. They will make sure benefits are reaching people through communication channels. They will make sure of keeping price point lower than that of red apples. They will sell them on the basis of added benefits. But there are some challenges such as making sure of availability at all the places where red apple is available, retain the customers, to launch red apple under the same brand or to only focus on green apples etc. After entry of green apples in the market, red apple producing companies face the challenge as their customers are slowly switching to green apples. In such situation, what a red apple producing company should do? There are various answers in marketing language but they should think it on the big level. In India, category creation takes time. In doing so few first movers get advantage but also they get surpassed by second movers. As the green apple company has already started creating category for green apples, now red apple companies can leverage that and start producing green apples to fight that one green apple company keeping red apple competition healthy as earlier. This move will definitely cannibalize the business of red apple but it will gain through green apple business. Human psychology works in very unique way. People try to compare on the same parameters and if they don’t find then they compare on category basis. Now consider two companies rolling out green apple in the market, people will compare them with each other rather than comparing it with the red apples. This all will help growing the overall category of apples in both the variants.
Whatever mentioned above is the metaphor. We all can relate it with the Indian FMCG market today. Patanjali is being green apple and all other FMCG companies are red apple companies. Patanjali provides ayurvedic products whereas other FMCG firms provide non-ayurvedic products. This is not the first time India is buying green apples. This has happened before when Dabur started its operation in 1903. But after few decades it became more of red apple company rather than focusing on green apples. The current scenario of India FMCG is all the firms are preparing for the competition created by Patanjali. As mentioned in above examples, I think Patanjali is recreating ‘ayurvedic’ space in Indian market. Now other companies have to decide whether to stick to the non-ayurvedic category and get affected by Patanjali because at the end of the day when customer compares a non-ayurvedic product with that of ayurvedic product, he/she will definitely go with ayurvedic product for its added advantages or to launch products in non ayurvedic category to leverage the already created category and compete with Patanjali with same offerings. Overall, from my point of view, this re-entry of green apple in the market will only boost the apple segment in all.