New Delhi: Colgate-Palmolive India has devised a strategic plan to concentrate on four key areas, as mentioned by MD & CEO Prabha Narasimhan during the latest earnings call. The company aims to drive volume growth in toothpastes by focusing on rural India, emphasising premiumisation through science-based innovation, leading growth in toothbrush sales with superior products, and expanding the personal care portfolio under the Palmolive brand.
Narasimhan highlighted the substantial growth potential in India, considering its relatively low oral care consumption compared to international markets. She pointed out that India’s per capita toothpaste consumption in both urban and rural areas is lower than that of the Philippines market, standing at 0.6 times and 0.5 times, respectively. Additionally, statistics reveal that only 20% of urban households and 45% of rural households brush their teeth twice a day, indicating an opportunity to encourage greater oral hygiene practices. The company aims to capitalise on this by targeting the 55% of rural households that do not brush daily, thereby driving volume growth.
Furthermore, Colgate currently holds an 85% market share at the Rs 40 price point, providing an avenue to elevate consumers to higher-value products. The company also reintroduced its flagship product, Colgate Dental Cream, in the March quarter, featuring new technology that delivers superior cavity protection.
Although Colgate’s market share has slightly declined to around 50% from 55-56% before the Covid-19 pandemic, it remains the leading player in the oral care segment in India. Dabur holds the second-largest market share at approximately 16%, showing growth from its previous share of 12-13% in recent years.
Regarding market trends, Narasimhan mentioned that the naturals category, which gained traction with the entry of Patanjali a few years ago, has now plateaued for the industry. However, Colgate continues to experience growth in this segment. The company’s successful launch of Colgate Visible White O2 toothpaste presents a significant growth opportunity. Narasimhan also highlighted the release of the Visible White whitening pen in the March quarter, providing consumers with the ability to achieve whiter teeth overnight.
While Colgate maintains an optimistic outlook for growth, industry analysts caution that the oral care category in India remains highly competitive, and Colgate’s focus on rural areas may require time to yield tangible results. Analysts from Prabhudas Lilladher, a Mumbai-based brokerage, note that Colgate’s emphasis on the low-growth oral care segment across various price points could potentially limit overall growth. However, they believe that the company has the potential to expand its operating margins in the coming quarters due to favorable raw material costs and implemented price increases during FY23.
