10 things start ups and small businesses can learn from Patanjali Ayurved Ltd

Patanjali products seemed to have burst into the scene recently, but the company was launched in 2006 and has since seen incredible growth. With a revenue of 5000 crores this past year, the company is set to double that number by next year making it the fastest growing FMCG company in the country. Even though a sizeable section of the youth might have reservations with the Patanjali brand it is hard to deny that the company is ascending the success graph at a record pace.

Here are 10 things that have helped Patanjali become a retail hit that start-ups and other businesses might benefit from-

Bring in an exclusive influencer

Baba Ramdev is only the face of Patanjali, although most people might think he is the proprietor of the company as well. While there are other people behind the economics and functioning of the brand, Ramdev is the image associated with the company and the products. What Patanjali has in Ramdev is an exclusive influencer, who is not promoting any other company or products outside of this brand.  In comparison other companies competing for categories often sign on influencers that are also representing various brands and products, so even if the influencer brings with them a massive following, the attention of their followers is divided among various brands.

Patriotic Branding is a plus

Patanjali holds a range of products that represent the goodness of Indian ingredients and culture, making it a winning hit with the people. Even with relatively sub-par packaging, Patanjali products seem to find their way into the shopping bags of many customers. A big part of the Patanjali branding is the use of ingredients sourced locally that are unique to India. Currently, Patanjali is one of the largest buyers of aloe vera, along with other herbs and plants sourced from the foothills of the Himalayas. With its production facilities situated in Haridwar, the Patanjali brand represents the culture of India, using patriotic messaging in their campaigns. When a customer purchases a Patanjali product they are also purchasing a product that is rooted in Indian values.

Multiple distribution outlets equals more revenue

Young companies that create a product to retail are often challenged with distribution channels and digital customer acquisition costs. Patanjali, in contrast, has multiplied its distribution channels so that a larger customer base can be targeted. From local ayurvedic shops and ‘chikitsalayas’ to large supermarkets as well as digital channels, Patanjali products can be found at over 4000 franchise distributors in addition to other Ayurveda Kendras and shops. These various outlets allow the company to engage with a nationwide audience across social strata. From the shelves of supermarkets and the carts of Amazon.in to the local ayurvedic shops, Patanjali is bringing in customers at every level.

Low-cost price for goods equals more goods sold

There are two key factors that allow Patanjali to keep the cost of manufacturing low. Their main production factories are located in Haridwar, Uttrakhand largely an excise free state, where the excise free status will remain in place until 2020 even with the introduction of new GST regulations, secondly the cost of sourcing herbal/ ayurvedic ingredients and other raw materials from the Himalayan belt is often low or subsidized. These exemptions help keep the cost price of goods low allowing the company to mass-produce.

Affordable for all consumers

Due to low-cost prices, the company is able to put the products in the market at a market price that is far less than that of its competitors. Where a standard toothpaste tube costs around a 100 INR mark, Patanjali Dant Kanti costs an average 50 INR or less. Even in the other FMCG segments, Patanjali prices are lesser than that of the competition keeping their sales high.

Leave no product unturned

From cereal bars to detergent, Patanjali markets a wide range of products under its brand name, since the brand has already established its ayurvedic-natural image. Recently they were pulled up for falsely advertising products, but even with the minor setbacks, the company has managed to break into new verticals because they are successfully able to attract existing consumers to their new products. A loyal customer of any brand is likely to purchase multiple products of the brand they trust versus a competitor.

Bring your TG into confidence before expanding the horizons

Long before Patanjali products made their way into the shelves of supermarkets in tier one cities, they were already household names in many smaller towns in the nation through their distribution channels in Ayurveda Kendra, ‘chikitsalayas’ and local dispensaries. Word of mouth marketing has been a major factor in the success of the brand and what started as a grass root company has had meteoric success.

Quality products will create word of mouth advertising

A lot of Patanjali products use ayurvedic ingredients and recipes which is a trusted method of curing ailments and strengthening the body. Ingredients used by Patanjali like aloe vera, turmeric, rose water etc are proven to be beneficial for skin and hair care, Patanjali products are often advertised as being 100% natural, making them effective.

Push the boundaries

Most of the big FMCG players have been in the market for decades; in comparison, Patanjali was founded in 2006 and since then has expanded into various categories year on year. Most major companies spend years aiming to dominate one category before introducing a new SKU. In comparison, the 206 SKU count Patanjali boasts of keeping their sales high.

Move forward regardless of competition

Most start-ups are likely to gauge the field before entering the market, and an important aspect of making an initial business plan entails assessing the market and trying to fill a gap where needed. Patanjali seems to have taken the opposite approach and has created products in verticals where tough competition has existed for years. Recently the company has also entered the cosmetics space, which is dominated by veteran brands and has still seen good sales there as well.