Patanjali Business Model: How does Patanjali Make Money?

Founded in 2006 by Baba Ramdev and Acharya Balkrishna, Patanjali is a well-known Indian brand for natural products. They make and sell household items using traditional Ayurvedic methods. Operating from Delhi and headquartered in Haridwar, Uttarakhand, Patanjali blends technology with ancient practices to create reliable and natural products. The company’s success lies in building trust among Indian consumers by offering promising and entirely natural goods. Patanjali’s commitment to traditional methods sets it apart in the market.

Name of the company	Patanjali
Founders	Baba Ramdev and Acharya Balkrishna
CEO	Balkrishna
Industry	Cosmetics and personal-care, ayurvedic and food products
Headquarters	Haridwar
Revenue	30,000 crores INR Approx

Who Owns Patanjali?

Patanjali Ayurved, famous for Ayurvedic stuff, has a unique setup. Acharya Balkrishna, a close helper of founder Baba Ramdev, owns most of it – about 98.6%. This big ownership is a big deal for Patanjali’s recent success. In 2023, Forbes said Acharya Balkrishna is the 68th richest Indian, worth around $3.2 billion. He’s actively involved, helping Patanjali grow and become known.

Baba Ramdev, the Yoga guru, doesn’t directly own Patanjali Ayurved shares. Despite being the face of the brand, his ownership isn’t in its shares. Instead, he influences and shapes Patanjali Ayurved’s mission. However, Patanjali still holds 40% of the subsidiary’s shares.

Business Model of Patanjali

Patanjali’s business model is focused on FMCG. They make herbal and mineral-based products and sell them at affordable prices. Patanjali has a vast network of yoga and Ayurveda.

Patanjali’s Yoga sector boasts 5 lakh branches and mentors in the Patanjali Yoga Samiti. This extensive network not only promotes yoga but also contributes significantly to the profits of Patanjali’s consumer goods segment. The company actively promotes and guides people in yoga, organizing camps nationwide. The substantial reach of their Yoga network brings substantial benefits to the consumer goods brand, underlining Patanjali’s commitment to holistic well-being alongside its business success.

Patanjali’s business model aligns with typical FMCG companies – manufacturing and selling products. However, what sets them apart is their remarkable growth compared to other FMCG companies.

Patanjali’s successful marketing strategies have yielded remarkable outcomes. Now, let’s explore how this business model uniquely benefits the company.

What is unique about Patanjali’s business model?

Patanjali’s standout feature is prioritizing quality over profit. They offer products at a lower price than many FMCG companies by sourcing accurate raw materials directly from farmers, reducing production costs.

Distributors and retailers make low profits with Patanjali products. Patanjali sets up its retail outlets in different cities and towns to address this. Selling products under one brand helps save on extra promotion and advertising costs.

How does Patanjali make money?

Patanjali, a popular Indian consumer goods company, uses a diverse business model for revenue. Primarily centered on making and selling fast-moving consumer goods (FMCG), Patanjali also ventures into different activities to diversify income. Here are the main ways Patanjali generates money:

• Sale of FMCG Products: Patanjali earns money by selling everyday items like food and personal care stuff. They sell these in their stores, online, and through partnerships. People buy these products at good prices, making up a big part of Patanjali’s money.
• Ayurvedic Medicines and Healthcare Services: Patanjali makes money from Ayurvedic medicines and healthcare services. They produce herbal remedies and health supplements based on Ayurvedic principles. Additionally, Patanjali runs clinics across India. It provides consultations and traditional Ayurvedic treatments. The income from these services adds to Patanjali’s overall earnings.
• Yoga and wellness centers: Patanjali makes money from yoga and wellness centers. They offer classes, workshops, and retreats for yoga and meditation, attracting people seeking health benefits. These programs add to Patanjali’s earnings. It aligns with their commitment to overall well-being based on ancient teachings.
• Partnership and Licensing Agreements: Patanjali teams up with businesses through licensing agreements, broadening product reach and income. They let others use their brand and ideas, earning royalties and fees. This helps Patanjali grow and make money by leveraging its popular brand.

Conclusion

Patanjali has successfully challenged big companies in India’s goods market. Using its brand, unique positioning, and natural products, it gained the trust of Indian consumers. The direct distribution and low prices helped it reach many people.

But growing fast brings challenges. Keeping the brand good and product quality is tough while growing. Competing with big companies requires constant new ideas. People checking Ayurvedic products need strict quality and rules.

Patanjali changed India’s goods market with a different model. It’s set for more growth by focusing on customers, a good distribution, and cheap and natural products.