CASE STUDY-SHUSHEN HERBALS

Shushen Herbals (https://shushenherbals.com/), an ayurvedic healthcare brand is the

brainchild of Dr Anil Agrawal a renowned Ayurveda doctor, who established the company in
1994 at Vidisha, Madhya Pradesh. The town has been a centre of Vaishnavism, Buddhism and
Jainism for thousands of years and it is also linked with greatest human Saga Ramayana.
Various saints and sages like Chyawan Rishi, Valmiki, Kalidas, etc were also associated with
the town for its rich Vedic history. Inspired by age old traditions and rich history of ayurveda,
Dr Agrawal started his journey to manufacture authentic ayurvedic medicines and ayurvedic
OTC products for his patients. The Flagship product categories of the company that are sold
offline are Chyawanprash, Dant Manjan, Pain Oil, Medicated Hair Oil, (OTC- Contributing 22%
of total offline Revenue) and Churans, Syrups, and Capsules (Medicines prescribed by
doctors- Contributing 78% of total offline Revenue). The brand started expanding its
customer base and operations in 2003 by venturing into MR Model (Medical Representative
Model where MRs from the company visit potential doctors, hospitals, and clinics to
recommend and sell company’s products to their respective patients; this type of sales model
is common in pharmaceutical sector). Due to limited resources, until 2019, the sales force of
the company was limited to 10 biggest districts of Madhya Pradesh covering a network of
2800+ Ayurvedic Doctors and 1700+ Medical Shops. In 2019, the company was converted
into a Private Limited Entity (private limited company is a company which is privately held for
small businesses. The liability of the members of a Private Limited Company is limited to the
amount of shares respectively held by them. Shares of Private Limited Company cannot be
publicly traded.) from a sole proprietorship company (A sole proprietorship, also known as a
sole tradership, individual entrepreneurship or proprietorship, is a type of enterprise owned
and run by one person and in which there is no legal distinction between the owner and the
business entity.) by his son Mr Shivam Agrawal (the current CEO), who had the dream of
expanding the business to national geographies. In April 2020, Mr. Shivam, a young
entrepreneur, amidst the Covid Pandemic, decided to take the business online due to
increasing demand of ayurvedic products. Amongst the lockdowns, the general public was
inclining more and more towards the traditional herbal medicines and concoctions. This
trend was further reinforced by the Indian Government and Ayush Ministry who regularly
adviced people to consume herbal medicines such as Tulsi, Ashwagandha, Turmeric,
Chywanprash, etc to boost immunity. Mr Shivam saw the pandemic as a golden opportunity
to educate, expand and cater to the rising demand for ayurvedic products that offer no side-
effects and are beneficial in the long run for every age group. The Company currently offers
42 different SKUs online that are available to purchase directly from their website and various
leading marketplaces like Amazon, Flipkart, Wellverse, Healthmug, etc. The product offerings
available online fall into two verticals, Classical Ayurveda (Classic Ayurvedic Herbs such as
Ashwagandha, Tulsi, Turmeric, Chaywanprash, etc.) and Proprietary Medicines (Patented
Formulations- Pain Oil, Pain Capsule, Sexual Wellness Products, etc.)
While the general notion of public regarding ayurvedic products is that they are 100% pure
and free from other artificial ingredients, it is not generally the case. Often, the so called
ayurvedic products made at mass scale consist largely of artificial additives and preservatives
to extend the product shelf life along with a relatively small percentage of active ayurvedic
ingredient. However, Shushen Herbals prides itself as India’s only brand that produces 100%
Pure, Traditional and Ayurvedic Products containing no artificial additives and preservatives.
Hence, it prices the products at a premium (25% above the competitors like Dr Vaidhya,
Patanjali, Dabur, Jiva, etc.) The products are advertised digitally through paid ads and
influencer marketing, and through MRs and word of mouth offline. The company also
maintains social media handles to interact with its customers and provides a 24*7 helpline
channel to resolve any queries. In FY21, the online channels contributed to 75 % of the total
revenue. Additionally, the Classical Ayurveda Vertical contributed to 80% of online sales and
the Proprietary Medicines vertical, 20%.

As expected, during the first and second wave of Covid 19, the company performed above
expectations (250% more than the expected sales volume in Q2, FY2021) due to the reasons
discussed above. This was also majorly possible due to the online channels that resulted in
expanded geographies and orders placed by customers Pan India. However, Post second
lockdown, the sales began to drop drastically possibly due to fall in the covid driven demand
and a relatively relaxed attitude of general public towards healthcare. The mass scale
vaccination drive organized by the Indian Government also contributed to a change in the
attitude of general population. Compared to Q2 FY2021, there was a dip of 56% in revenues
in Q3 FY2021. After this observation and much deliberation, the company reached to the
following four alternatives:
1. Change the name of the brand from Shushen Herbals to more relatable and
recognizable alternative. This alternative was though upon due to the reason that
most of the general public is not aware of the origins of the word “Shushen” from
Ramayana (https://shushenherbals.com/pages/about-us) and does not find it
relatable. However, changing the name would require a complete makeover and
rebranding which would be a costly affair.
2. Alter the product offerings from 100% Pure, Traditional and Ayurvedic products to
contemporary ayurvedic products (offered by similar companies like Dabur, Himalaya,
etc. These offering consist of artificial ingredients along with ayurvedic herbs) which
can reduce the price but will also dilute the brand’s unique selling proposition.
3. Extend the product line and launch new products such as herbal juices, multivitamins,
ayurvedic food supplements, etc. which may or mayn’t be 100% pure. Extending the
product mix would offer the loyal customers more variety.
4. Venture into a new vertical- Launch a new vertical of luxury ayurvedic skincare
“Iyuram” and enter into new market to capture ever growing demand in the beauty
industry. The beauty industry rarely experiences a dip in the demand and caters to
both young and older potential customers. “Iyuram” promises to offer chemical free
100% ayurvedic traditionally prepared ayurvedic skincare products such as Chandan
Kesar Face Cream, Kumkumadi Serum, Herbal Facewashes, and herbal soaps etc. that
are free of any colors, surfactants, fragrances, preservatives, and other additives.
 While this is an attractive niche, it would require a huge amount of capital investment
to enter into a completely new vertical. Mr. Shivam considers “Iyuram” as a promising
investment and is still planning the Go To Market Strategy for this brand, along with a
social media strategy.
What could be other reasons for the company’s decreased revenue? Given the above
circumstances, what should the company do? What choices can Mr. Shivam pursue amongst
the four alternatives? While he is most confident about the quality of his products, securing a
sizeable funding during this post covid era is a challenge. Keeping this in mind, how should
the company proceed ahead? If launched, what should be the GTM for “Iyuram”? How can
“Iyuram” secure a loyal base of consumers in a saturated skincare market?