According to Colgate-Palmolive, the urban market in India has shown signs of recovery, while the rural areas are experiencing slower growth. This can be attributed to factors such as inflation, declining incomes, and limited job opportunities. Despite these challenges, Colgate-Palmolive remains optimistic and anticipates a pickup in the rural market during the second half of the year. It’s worth noting that Colgate-Palmolive’s toothpaste is used by every second Indian, highlighting its significant market presence.
“Real incomes have come down and the general level of unemployment in rural India is very high. The impact of inflation on them is very high,” Mukul Deoras, President, Asia Pacific at Colgate-Palmolive, said at the Evercore ISI annual consumer and retail conference.
By volume, the country’s overall toothpaste market was down 2-3% in the March quarter, with marginal growth in urban and mid-single-digit decline in rural markets. “But there is confidence that the rural market, which is lagging, will actually start getting better in the second half of the year, assuming all the other things like monsoon and so on are good,” said Deoras, who is also the chairman of Colgate India.
The company behind the eponymous toothpaste brand said when compared to China, the Indian market has a significantly lower online and modern trade contribution, slower pace of premiumisation and low per-capita consumption. Besides, the annual per-capita consumption of toothpaste in urban India is about 200 grams and 100 grams in villages, lower than nearly 300 grams in China.
“The per-capita consumption in India is very low. And therefore, that in itself strategically is a very big opportunity for us because if we don’t drive per-capita consumption in India, then it’s not going to happen. As market leaders, we have to do everything that we can to drive the per-capita consumption, and that remains our single biggest opportunity,” said Deoras, adding that the company’s market share trend is stable and has started inching up.