In Indian villages, where over half the population neglects daily brushing, and in cities, where only a fifth brush twice a day, Colgate Palmolive India’s managing director, Prabha Narasimhan, emphasizes the responsibility of the company to enhance oral hygiene habits. Narasimhan points out that while every household in India purchases toothpaste, regular usage remains a challenge.
Narasimhan stated, “Our primary goal is to properly promote the value of oral care. When we constantly adhere to this purpose, the category flourishes. Conversely, when we falter, the category’s growth rate slows. “As the category leader achieves double-digit growth, we see an acceleration in category expansion.”
The company that produces the well-known toothpaste brand commands fifty percent of the oral care market in the country and experienced a growth of 10.6% during the quarter ending in March.
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In the past year, numerous fast-moving consumer goods categories, including oral care, experienced a slowdown, particularly in rural markets. Consumers there tightened their spending to counter inflation in daily groceries and household items. Additionally, companies decreased pack sizes without reducing prices, causing consumers to adjust their usage while purchasing a similar quantity of packs.
However, consumption in villages surpassed that of urban markets last quarter as many companies reduced prices due to declining commodity costs. Colgate noted that there is a growing sense of optimism in rural areas, which is expected to continue improving as inflation stabilizes and there are anticipations of a regular monsoon season.
Narasimhan added that based on current indications, inflation is expected to remain relatively low, increasing at a gradual pace. She emphasized that unlike many commodity-linked categories, the toothpaste category does not fluctuate significantly with commodity cycles.
Oral care consumption in India is notably low compared to other countries. For instance, markets like the Philippines consume 1.8 times and Brazil 3.1 times more than India. The US-based oral care giant has been focusing on innovation, especially in premium products, which consequently yield higher profit margins.
Analysts noted that the management is heavily prioritizing premiumization, aiming for a threefold growth in premium products compared to the core portfolio.
“To attain this objective, Colgate is strategically concentrating on its Total portfolio and intensifying efforts in organized channels. Furthermore, it aims to regain its former market share of Total from a decade ago, which has decreased from double-digit prominence in modern trade to single digits,” as stated in a report by Elara Securities.
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Nonetheless, only 12% of the oral care category consists of premium products, whereas 28% of SEC A consumers purchase premium items within this segment. In contrast, in categories like personal care, premium products constitute 30% of the category, with half of the SEC population opting for higher-priced items.
The company’s reliance on oral care products in India is significant, unlike its global counterpart, which boasts a robust portfolio in personal care as well. Plans are underway to introduce new products from its global portfolio, the company announced.
Narasimhan expressed, “Colgate will remain synonymous with oral care, and we aspire for it to continue receiving the same level of prominence, affection, and trust it enjoys today. However, we recognize an opportunity for diversification, which constitutes the fourth pillar of our strategy in developing the Palmolive brand.”
