An insight into the needs of Patanjali and pitching in for

investment

Analysing the basic needs of the company:

Problem 1
Problems
 Debt-fueled expansion
 Higher distribution and selling expenses
 Advertising and promotion expenses
 High dealer discounts can be offered on good over supplied

Problem Statement:
Patanjali is considered to be the fastest growing FMCG company in India. It
has grown from less Rs.500cr in FY12 to Rs. 10,000 in FY16. Patanjali still
faces a number of threats from its competitors and still has a long way to
go.
The continuous expansion and growth of the company has fueled the
company with the debts as the expected sales and profitability margin are
too low for the continuous growth. Expansion of the company and the
consumer base should go hand in hand. The view of the company to make
the entire nation is a time-consuming process as it requires a heavy
advertising and promotion. Not only the advertising and promotion is
expensive for the company in the period of expansion but can also harm the
company’s financial structure.
Patanjali has been traditional in reaching out to their customers by offering
heavy dealer discounts. Such discounts only accounts to more burden on
one’s self financials. It’s time that they start adapting other means to gain
access to the untapped market. The company should look for other ways to
retain their pre-existing customer base and to attract new market.
Increasing the customer base is not the only thing that the company
requires right now, a proper self-efficient system of general trade is
necessary to match the demand. The trade channels should be properly
managed and should be capable of communicating the demands of the local
suppliers to the warehouses and other suppliers.

Solutions
An internal application for Patanjali between the sales network to facilitate
them to match the demand and supply of every product on time

An external application to allow the customers to enquire about the

availability of the products at various Patanjali stores (or the nearby ones)
to ensure their convenience
In case the product is not available at one store but is available at another
store, the consumer can know about the availability of the product and can
go and buy the product.
Since the consumers can now find their products amongst the widespread
network of general trade, they will be pleased with the convenience and
ease of finding the product
Advertising and promotion expenses will be handled the application, this
will help the consumers in payment as well as in contributing by increasing
the consumer base.

The consumer has the power to converse with the store owner/manager
and enquire about the availability of different products as per his/her
needs.

HIGH-DEMAND PRODUCT
In case of a high demand product, if the product runs out of stock, the
nearby consumers can be notified wo have once enquired about the
product or purchased the product.

The power of communication between the consumer and the store will
allow the consumers to know about the availability of the products in
various Patanjali stores.
The app will also allow offer discounts and coupons to the consumers, if
they decide to pay through the application.

This will not only ensure the retention of existing customers, but the
extensive marketing with the help of in-app offers and coupons will attract
the remaining market as well.

In other words, Peppty offers a system of Business Management, as it not

only deals with the supplies of stock but also, manages and increases the
consumer base.

Problem 2

Opportunities
With the acquisition of Ruchi Soya, the only major competitor left for
Patanjali is Adani Wilmar with a dominion in the market, majorly in the
edible oil products.
Adani Wilmar has not implemented technology to access and communicate
to the customers.
Decline in profitability margins of Patanjali due to increase in number of
Competitors
Supply chain and distribution network unable to keep pace with the
constant expansion and development

Solutions
Peppty can serve as an internal application for employees and work within
the distribution system to keep the general trade consistent. The
application will provide the store keepers a platform to communicate with
the suppliers.
This feature will not only be limited to communication of two personnel. In
a short period of time, the app will be able to help suppliers realize the
demand of products as per the area, making the supply chain efficiently
managed.
Peppty allows the business to be self-efficient and gives them access to a
competitive edge. Adani Wilmar and none of his brands use an application
to manage the trade or consumers.
As rapidly as Patanjali is expanding, with the view to have the complete
nation as their market, Peppty will act as a helping hand as it will bridge
the supply gaps and also attract new customers through aggressive
promotions, coupons, discounts and offers.

Problem 5

Patanjali’s decline in turnover was due to the company’s inability to timely

adapt to the GST regime and develop infrastructure and supply chain. As
compared to FY 2017, FY 2018 saw a 10 percent decline in the revenues of
Patanjali. The onset of GST in 2017 led to a 50 percent drop in next year’s
profit, the prime reason being lack of technology. Hence it was unable to set
up a compatible GST-related inventory and invoicing management system
in a timely manner, which created a demand-supply gap that could not be
bridged in time. There was an inventory mismatch due to delayed supply of
goods by distributors and as a result this company was unable to expand its
consumer base.
Apart from its network of five lakh franchise stores, Patanjali products are
sold across all online platforms, including Amazon, and big offline retail
platforms like Big Bazaar. Nearly 90 per cent of small outlets that sell
Patanjali items have a scarcity of its products, as per reports of Business
Today (November, 2018)

Root Cause of failure – Lack of proper technology to make supply match

demand in the consumer goods industry.
Solution –
 Access to an app that enables to bridge the gap and expand customer
base. In order to upgrade the technology, we require investment.
 Here at Peppty, we offer organisations a new kind of network that
connects users of the app with the business in a more convenient
manner.
 The social network provided by us is cheaper in comparison to
building a new network altogether.

Problem 6
The company’s major breakthrough is from its herbal, ayurvedic and
natural products where the company holds about 10% of the consumer
goods market. When Patanjali started to stir competition leaders like HUL
and Colgate made their move by relaunching its ayurvedic personal care
products. Patanjali also faces stiff competition from other big brands such
as Hindustan Unilever Ltd, Dabur & Colgate, ITC Ltd. The inception of GST
and the hostile takeover of rival brands led to a major setback to the
financial performance of Patanjali.

Root Cause of Failure – Competition in the market for FMCG products,

especially herbal ayurvedic products.
Solution –
 An application that helps to withstand competition.
 This app helps its users to use this app to locate the nearest store as
per their preferences and buy.
 Peppty is a private social network that aims at strengthening privacy
of users and allow them access to registered shops to purchase daily
necessities.
 Peppty guarantees security, because it is a network that connects
only the closed ones and allows them to regulate the posts that are
made online.
 We are presently also offering to sell our product to concerned
offices and institutions in need of a local intranet service by
customising our product as per their requirement.
Our Business Model- Need for Investment
 The basic objective of our organisation is to bridge the gap between
both retailers and customers. We provide a social platform that
brings the entire local retail sector under one network and facilitates
direct interaction with the potential customers. We have expertise in
building private, social and secure sites for corporate houses and
organisations. Our clients include local shops, retail outlets etc.
 The latest update also includes the feature of online business
transaction and allows customers the access to search for the nearest
convenience stores that might sell the product they are looking for
 The shops registered under Peppty will have the authentication to
utilise the payment mode provided by us, which would enable them
to discount their bills. This is the minimum guarantee on investment.
 Our business is a start-up which requires funding from reliable
investors and in return we provide them with our technology and
potential customers. This can help convert Peppty users into
Patanjali product users, which would be a mutual benefit.
 Lack of advertising support, lower trade spends vs. other brands, a
complex distribution structure and an incoherent marketing strategy
have been the primary factors that have impacted growth. While
brand preference does not seem to be the primary reason for the
problems, these issues, if they continue could have lasting impact on
market shares.
 Peppty would provide the platform where Patanjali could advertise
its products and attract customers. This would automatically
guarantee development and expansion of both the businesses.

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