Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

When you start to grow, everyone wants to be a part of your success story. This is evident in case of Indian <a href="http://www.businessinsider.in/The-Consumers-God-Babas-Patanjali-to-record-1bn-sales-next-year/articleshow/51427510.cms">FMCG giant Patanjali Ayurved</a>, which has been granted loans by ICICI Bank and HDFC Bank, even as lenders are shying away from most corporate borrowers. <keyword id="6406649" type="COMPANY" weightage="100" keywordseo="Patanjali-Ayurved">Patanjali Ayurved</keyword>, owned by <a href="http://www.businessinsider.in/Baba-Ramdevs-Patanjali-is-rattling-the-consumer-market-and-how/articleshow/51053252.cms">yoga guru Baba Ramdev</a>, is eyeing to raise Rs 1000 crore this fiscal year. 
 
The Haridwar-based consumer goods maker was approached by these banks who offered it corporate loans, as said by MD Acharya Balkrishna. He added that public sector banks SBI and PNB have so far extended their credit facility to the company. 
 
"While big industrialists fail to repay loans, we pay off our dues right on time. This is made possible due to our escalating product sales," Balkrishna told ET. 
 
Patanjali Ayurved has <a href="http://www.businessinsider.in/Patanjali-is-taking-over-the-entire-Ayurveda-industry/articleshow/51453997.cms">left behind several established names </a>in the industry after its inception a decade ago, and now plans to raise funds through bank term loans or corporate bonds. It is now looking forward to doubling its production capacity to 2,000 tonnes a day by the end of 2016-17. 
 
"Whoever gives us cheap money, we will go for it as <a href="http://www.businessinsider.in/Patanjali-is-taking-over-the-entire-Ayurveda-industry/articleshow/51453997.cms">we are expanding fast</a>," Balkrishna said. "More banks are coming to us with their offers while a few merchant bankers too contacted us with fundraising proposals via bond sales. We are exploring all options," he said. 
 
Patanjali is now planning to set up manufacturing units in Maharashtra, Madhya Pradesh, Punjab, Jharkhand and West Bengal, along with launching a new product line of nutrition baby foods. 
 
<a href="http://dailyamin.com/wp-content/uploads/2015/11/16nov6u.jpg">Image source</a>

Everyone wants to be a part of Patanjali’s success as FMCG giant aims Rs 1000 crore this fiscal

Until a few years back, herbal product markets in India had just two names to reckon for, <keyword id="6842" type="COMPANY" weightage="100" keywordseo="Baidyanath">Baidyanath</keyword> and <keyword id="2057176" type="COMPANY" weightage="100" keywordseo="Vicco">Vicco</keyword>. However, in 2006, a new company entered the market and in just 10 years, it has left behind both these companies. 
 
Yoga guru Baba Ramdev's Patanjali Ayurved has set on a wave of Ayurveda love in the country, which has resulted in it being a successful business model using traditional products and the ancient system of medicine. 
 
This wave has also inspired the other two companies to pull up their socks and cash on to the increading popularity of Ayurvedic products. 
 The reason why some of these companies dealing in Ayurvedic products, like Vicco, Sandu, <keyword id="277948" type="COMPANY" weightage="100" keywordseo="Amrutanjan">Amrutanjan</keyword> and <keyword id="589160" type="PERSON" weightage="100" keywordseo="charak">Charak</keyword>, were not able to attract Indians to them was their limited portfolio, which never went beyond the traditional products. However, Patanjali sells products ranging from detergents and toothpaste to ghee, atta and noodles in an FMCG market, thereby making Ayurvedic products a big deal in India. 
 
This success of Patanjali Ayurved has inspired other gurus like Sri Sri Ravi Shankar, Sadhguru Jaggi Vasudev, Ram Rahim as well as Aurobindo Ashram to enter the consumer segment with Ayurveda-centric products. 
 However, Kolkata-based Baidyanath is of the opinion that they don’t need to rival Patanjali, <keyword id="62997" type="CITY" weightage="100" keywordseo="Dabur">Dabur</keyword> or <keyword id="26169" type="COMPANY" weightage="100" keywordseo="himalaya">Himalaya</keyword> in the core FMCG segments. "We have been here for 100 years and want to survive another century in a sustainable way. No point getting into all FMCG segments and be a fringe player," Ameve Sharma, its third-generation scion, told ET. 
 
Coming back to Patanjali, why a company the originated in 1997 as a small pharmacy has reached these heights? The reason is the nonconventional approach of catering to categories like noodles, oats and detergents. 
 "What we have done is consistently focused on quality and pricing. Ask consumers about our product quality. Why are repeat purchases coming? It's because of the quality we are offering consumers," said SK Tijarawala, spokesperson of <keyword id="700471" type="UNKNOWN" weightage="100" keywordseo="Patanjali-Ayurveda">Patanjali Ayurveda</keyword>. "As far as pricing is concerned, we are trying to give consumers the best possible prices. 
 
<a href="http://static.panoramio.com/photos/large/73116827.jpg">Image source</a>

Patanjali is taking over the entire Ayurveda industry

<a href="http://www.businessinsider.in/searchresult.cms?query=Ramdev">Ramdev</a>’s <keyword id="6406649" type="COMPANY" weightage="80" keywordseo="Patanjali-Ayurved">Patanjali Ayurved</keyword> cashed in a whopping Rs 2,500 Crores+ during 2014-15. That puts it at par with <a href="http://www.businessinsider.in/searchresult.cms?query=FMCG">FMCG</a> giants like <a href="http://www.businessinsider.in/searchresult.cms?query=Emami">Emami</a> or <a href="http://www.businessinsider.in/searchresult.cms?query=Zandu">Zandu</a>, but we hardly mention them in the same sentence. 
 
The reason is quite simple – the former is looked at more from a ‘non-profit’ lens, a product that is aimed at well-being, and is not out to make moolah. Which is crazy given that it’s minting such money! 
 Even Baba <keyword id="6369109" type="PERSON" weightage="100" keywordseo="Ramdev">Ramdev</keyword> claims he’s not out to make money. "Hamne ye kaam vyapaar ke liye nahin, upkaar ke liye kiya hai” (We’ve done this to help people and not for business), he claims. 
 
"We never had a business plan. We also don't know markets or marketing", Acharya Balkrishna, Managing Director of Patanjali Ayurved adds. 
 That doesn’t deter us from looking into this accidental business model that runs so successfully that it can give any <keyword id="34523" type="CITY" weightage="100" keywordseo="fmcg">FMCG</keyword> giant a run for its money. After all, the Indian population is falling for a 'Materialized Spiritualism' that comes sprinkled with a pinch of <keyword id="6355812" type="COMPANY" weightage="80" keywordseo="Yoga">Yoga</keyword> and <keyword id="48379" type="CITY" weightage="100" keywordseo="Ayurveda">Ayurveda</keyword>, and a desi brand tag. 
 
But how do you get your hands dirty when the founder-CEO claims there is no plan in place to make sure they make money! You try and decode its business model. 
 
Business Insider India dissects the mysteries behind the shadowy business machine. 
 
 
Love him or hate him, you just can’t ignore him. 
 
Image credit: Indiatimes

Business by chance - Decoding Baba Ramdev’s FMCG Empire

<ul><li>China's push for rental housing startups ended up pushing local rentals through the roof, according to a Wharton University report. </li><li>OYO, <keyword id="2766908" type="PERSON" weightage="20" keywordseo="Nestaway">Nestaway</keyword>, <keyword id="3844186" type="PERSON" weightage="20" keywordseo="CoHo">CoHo</keyword> and <keyword id="136437" type="COMPANY" weightage="20" keywordseo="Lemon-Tree-Hotels">Lemon Tree Hotels</keyword> are working on similar models in India. </li><li>The report recommends mortgage trusts as a solution to keep rents under check and still allow co-living to be a viable business model.</li></ul>India's largest budget hotel chain is ready to kick off it's new venture, Hamstede, where private equity major Warburg Pincus will be a majority shareholder. "The board (of Lemon Tree Hotels) has approved an initial investment of $5 million," Chairman and Managing Director Patanjali Keswani told Business Insider. The company will have a 30% stake in Hamstede. And it's not the only one. A whole host of startups like OYO, CoHo, and Nestaway are growing fast. Consulting firm PwC has pegged the market for urban residential housing at $13.5 billion. Delhi-based CoHo had estimated the <a href="https://yourstory.com/2016/05/coho/" data-type="tilCustomLink" target="_blank">co-living market in India at $10 billion</a> in 2016. The model that Hamstede is built on is derived from the successes of three Chinese companies offering co-living spaces Mofang, Nova, and Zirooms, and another startup based in Hong Kong Weave. Warburg Pincus is an investor all these companies and all these firms played a part in the rental housing boom in China in recent years. The Chinese experience with co-living has an ominous sign for Indian tenants. President Xi Jinping pushed for the rental housing boom <a href="https://www.reuters.com/article/us-china-economy-houseprices-rent-analys/how-chinas-plan-to-develop-rental-housing-backfired-idUSKCN1LU0JA" data-type="tilCustomLink">but it backfired</a>. Despite the increased supply of homes, rents in China’s major cities soared in the double-digits. While the companies' valuations spiked, accommodation became unaffordable for many students and young professionals. In some cities, rents increased by as much as 30% between 2017 and 2018, according to <a href="http://d1c25a6gwz7q5e.cloudfront.net/reports/2019-03-08-E-House-Poly-FINAL.pdf" data-type="tilCustomLink" target="_blank">a study by Wharton University</a> released in March 2019. How co-living business works "Today if you live in Mumbai, and you work in Lower Parel, you cannot afford an apartment there. Your apartment will be in Borivali and travelling two hours one way everyday. I will put up a co-living space very close to Lower Parel but the trade-off is I will give you a far more compact living area, where you spend the night. The common area will be very social, where youngsters can hang in the evening, with a living room and an open kitchen and so on," Lemon Tree Hotels' Chairman Patanjali Keswani said explaining the model to Business Insider. However, in China, the rush build capacity home-owners borrowed heavily and companies bid generously for land parcels. The excess cost was passed on to the tenants, the Wharton study showed-- an important lesson as Indian startups chase the same opportunity. Big money is chasing these new co-living ventures. Not just Warburg Pincus, Tiger Global, and Singapore sovereign wealth fund GIC are all invested in the idea in different countries. As India opens up to co-living, tenants will be looking for affordability, particularly in big cities like Mumbai where rents are already beyond many people's reach. The solution The Wharton study recommends securitisation as a possible solution to keep both the rents and the financial pressure on companies low. Companies can raise money against the rents receivable and distribute the income as as dividends to shareholders. In formal terms, this will be a real estate investment trust. Both Mofang and Zirooms have raised money using this route in China, but retail investors are not allowed to invest in these securities yet, according to the report. If the experiment helps in cooling the Chinese property market, both owned and rental, this can become a new avenue for financing high-cost co-living projects without adding burden on the tenants. An idea Indian companies can borrow too. SEE ALSO: <a href="https://www.businessinsider.in/from-pgs-to-co-living-spaces-how-student-accommodation-is-changing-in-india/articleshow/65201577.cms" data-type="tilCustomLink" target="_blank">From PGs to co-living spaces: How student accommodation is changing in India</a>

China's experience with co-living should be a warning for tenants as well as companies in India

It’s all set to be a ₹5,000 Crores company by next March, and is headed by a Yogi. It has effectively demolished all set notions of business, finance and marketing. In an age where companies spend as much as 70% of their earnings on marketing, this ‘desi’ <a href="http://www.businessinsider.in/searchresult.cms?query=FMCG">FMCG</a> brand expends a few pennies at the most. Yet, <a href="http://www.businessinsider.in/searchresult.cms?query=Kishore+Biyani">Kishore Biyani</a>, CEO, <a href="http://www.businessinsider.in/searchresult.cms?query=Future+Group">Future Group</a> expects sales revenue of about ₹1,000 Crores in the next 3 years from his partnership with this brand. We’re talking of the ‘swadeshi’ <keyword id="34523" type="CITY" weightage="100" keywordseo="fmcg">FMCG</keyword> giant – <a href="http://www.businessinsider.in/searchresult.cms?query=Patanjali+Ayurved">Patanjali Ayurved</a>. 
 
BI India chatted up with <a href="http://www.businessinsider.in/searchresult.cms?query=Acharya+Balkrishna">Acharya Balkrishna</a>, Managing Director of <a href="http://www.businessinsider.in/searchresult.cms?query=Patanjali+Ayurved">Patanjali Ayurved</a> to get a rare glimpse into this unconventional business machine that’s raking in the moolah like never before. 
 
1. How did Patanjali begin? 
We’ve always focused on the needs and demands of the people of the country. That led to the inception of the brand. Our focus has always been on <a href="http://www.businessinsider.in/searchresult.cms?query=Yoga">Yoga</a> and <a href="http://www.businessinsider.in/searchresult.cms?query=Ayurveda">Ayurveda</a>. We never planned it to be so big. We wanted to serve the people, and by the grace of the Almighty it has been successful. Without divine intervention this would never have been possible. 
 
2. How difficult was it to create a brand? 
The biggest difficulty was that people who run MNCs never revolt against the government. However, Swamiji spoke up against black money and other pressing issues. You must realize it’s the government that issues certificates and licenses. To stand up to the government and yet establish a brand, it’s a daunting task. We have had over 300 cases registered against us. Yet, we were successful in our protest. Our processes are transparent and in line with the government operations and the love of the people is with us. That’s exactly why the brand has been left unharmed. 
 
3. How do you conduct your market research? 
We’ve never done any market research or market survey. We’ve focused all our efforts on <a href="http://www.businessinsider.in/searchresult.cms?query=R%26D">R&amp;D</a>, product development and quality control. 
 
The initial idea was that MNCs offer the best quality. They had a monopoly over the Indian <a href="http://www.businessinsider.in/searchresult.cms?query=FMCG">FMCG</a> market. Indian brands were expected to lose out on quality. We focused on low price and high quality to demolish this myth. It has worked for us. 
 
4. How do you assess the need for a product? 
We never think of commercial benefits. Our efforts are guided by consumer demand. We surround ourselves with people and understand their sentiments, needs and desires. 
 
Our first products were Aloe Vera Oil and Amla Juice. There was no market for products like these. Nobody ever thought this would sell. It started like this. Amla farmers were in dire losses. We felt we should buy some from them. We knew Amla was very good for your health. Swamiji declared the benefits of drinking Amla juice, and it started to sell. Any corporate trained in market research and planning would call this move a foolish move. 
 
For Aloe Vera Oil we were selling it at as little as Rs. 200. Most MNC priced theirs at around Rs. 1300. Our focus was never on the size of the market, but on the demands of the people. 
 
5. Why don’t you market your products? 
For any <a href="http://www.businessinsider.in/searchresult.cms?query=FMCG">FMCG</a> product you'll have raw material, processing cost and packaging. Nobody gives out of their own pocket. Either one has to increase the price or offer inferior quality. If we invest in marketing we can’t offer low prices. MNCs might try to sell products via marketing, we’ll do the same with quality. 
 
6. Are you worried about the future of your retail outlets after the partnership with <keyword id="44949" type="CITY" weightage="100" keywordseo="Future-group">Future Group</keyword>? 
Our sales would spike from this partnership. Once people see products in malls, try them, and find it’s effective, they’ll become loyal customers of the brand. This would draw them to our brand stores. This would strengthen <a href="http://www.businessinsider.in/searchresult.cms?query=Patanjali">Patanjali</a> as a brand. 
 
7. What are your current expansion plans? 
Our Atta noodles would arrive very soon. We would sell it at half the price of most leading MNCs. We’ll also launch Power Boost – a malt-based children’s health supplement soon. We’re currently focusing on ramping up our R&amp;D operations on this. 
 
8. How did you come across the idea to have your won noodles brand? 
We never planned to enter the ready-to-eat category. Our social media expert spoke up about the <a href="http://www.businessinsider.in/searchresult.cms?query=Maggi">Maggi</a> controversy. The posts went viral. People asked us to offer a healthy alternative to <a href="http://www.businessinsider.in/searchresult.cms?query=Maggi">Maggi</a>. Our R&amp;D team worked on it and started developing. Now we’re a few days from the launch. 
 
9. How do you plan to finance your expansion plans? 
We would get bank loans. We can also loan from partner institutions. There are no plans to look at <a href="http://www.businessinsider.in/searchresult.cms?query=FDI">FDI</a> currently. 
 
10. Do you think your financial model is self-sustainable? 
We’ve come so far based on this model. We started by taking personal loans as well. Patanajali can’t dream to be a global brand overnight. We don’t build castles in the air. This model seems simple and effective to us. 
 
11. Have you broken even? 
In the zeal to expand, when we started there were several problems. We optimized our systems accordingly. We decided to expand as much as we can afford to. It’s as simple as that. 
 
12. Are you looking at other brand partnerships? 
None as of now. We’re always open to more fruitful partnerships that would help better our services. 
 
13. What do you look for in a job candidate before you hire them? 
Our system is corporate, but our culture isn’t. We hire people that share our line of thought. Incidentally they’re also experts in their fields. We don’t hire those who have non-vegetarian fare, consumer tobacco or alcohol. They must be patriotic and spiritual. We routinely receive resumes for consideration. We scan them and choose the best in case of vacancies. 
 
We look at a relationship that can survive the test of time. They work here to serve society, not just to earn money. I personally never charge a rupee as a salary. 
 
14. It’s been in the news that you’re looking to hire executives from top FMCGs. 
If there are people in the system that are willing to come to our side, it’s a different thing. However, we never target specific brands. We haven’t come this far by copying the financial system or policies of any company, and we won’t. We don’t consider these companies as competition. 
 
15. Do you think Swamiji’s share of controversies had a positive or negative impact on the brand? 
The central and state governments were against us when Swamiji stood up against the government’s policies. This means people had faith in us and our brand. Otherwise this would have closed down by now. 
 
 (The following conversation was in Hindi. It has been translated to English with as little loss as possible)

Exclusive: the accidental
business - Patanjali Ayurved

New Delhi, April 12 () The lockdown to contain spread of COVID-19 in the country has had disastrous impact on the hospitality sector, especially for hotels, hoteliers said. "The impact is disastrous. The hotels are businesses which are very capital intensive and also have very high fixed costs," Lemon Tree Hotels Chairman and MD Patanjali G Keswani told . The capital intensive component is normally debt and it has to be serviced by payment of interest on debt and repayment of debt. Hotels are also labour intensive, so they have lots of fixed costs such as wage bill, besides paying government levies, minimum load charges, among others, he added. "Earlier Indian hospitality industry was on average witnessing 65 per cent to 70 per cent or full occupancy till end of the February. First few days of the March were fine, once the things started accelerating, the occupancy has gone down to minimum," Keswani said. Going ahead, occupancy in India is going to be very low. So hotels will have to either shutdown or run in a very limited manner, he added. The government has also requested industries to not lay off staff and cut salary, where in liquidity is a problem, Keswani said. Under this situation, the industry is going to go sick very fast unless you have the external source of capital, like holding company. "The govt took a good first step to announce the moratorium on interest and principle repayment for three months. But the problem is the period is too short. One can not plan on the basis of three months. "Ideally government should have done a 12-month moratorium and said the amount you are not paying in these 12 months shall be added in the debt," Keswani said. The industry is not looking for a dole but is asking for minimum support to survive by pushing back repayment of instalments, some support for paying salaries and waiver in government levies, he added. In similar vein, Cygnett Hotels and Resorts founder &amp; MD Sarbendra Sarkar said, "The lockdown has adversely affected the hospitality industry...We are experiencing a big drop in new reservations, and increase in cancellations, etc." While RBI's three-month moratorium has come as a relief, the industry hopes that the government will soon offer schemes that will enable the sector, he said. In the meantime, Cygnett is reviewing its progress so far and seeks to make necessary changes and strategise for the post-COVID 19 period during this time, he added. Stating that COVID-19 has severely impacted the industry, Bird Group ED Ankur Bhatia said, "With occupancy crashing to a below 5 per cent against 95 per cent last year due to the unfortunate impact of COVID-19 mayhem, the tourism industry was in the front line and is the worst hit. No wonder a slew of hotels will fold up under pressure." The Associations have put forward multiple proposals to stay alive as well to ensure the employees are taken care of and retained, he added. "We welcome government's move to offer moratorium for three months on loans. The moratorium on capital and interest repayments of loans taken by the registered businesses would help for now as some of the payments were due end of March," Bhatia said. Amatra Hotels and Resorts co-founder and COO Anurag Dua said hospitality and travel sectors have been amongst the worst affected segments, with the businesses coming to a standstill as governments across the world locked down their countries to stop the spread of the coronavirus. "The moratorium of three months would provide the much-needed relief for the hospitality sector in India provided banks/NBFCs approve it unanimously with no condition precedent following the RBI move," he added. However, businesses working on rental models with private owners have not received any benefit which might act as a deterrent to operators at large, Dua said. "We expect the situation to improve once cases of COVID-19 slows and believe that the domestic tourism industry shall grow at a better rate," he added. AKT RVK

You Searched For "patanjali business model" and got 6 results

Everyone wants to be a part of Patanjali’s success as FMCG giant aims Rs 1000 crore this fiscal

BI India Bureau

Patanjali is taking over the entire Ayurveda industry

BI India Bureau

Business by chance - Decoding Baba Ramdev’s FMCG Empire

Saikat Pyne

China's experience with co-living should be a warning for tenants as well as companies in India

Sriram Iyer

Exclusive: the accidental business - Patanjali Ayurved

Saikat Pyne

Lockdown has had disastrous impact on hospitality sector; govt support needed: Industry

PTI

Popular Keywords

Buying Guides