New Delhi, Oct 27: The Rs 400-crore toothbrush market (300 million in volumeterms) has shrunk by 5 to 7 per cent in terms of volume and 2 per cent invalue in the last one year, as per the ORG-Marg retail audit data(all-India) released in August 1999. The urban market--estimated at 227million units--is also showing a decline of 5.5 per cent in volume terms,while in value terms, the Rs 278-crore urban market is growing at a mere 0.3per cent.Ironically, one of the main reasons for the shrinking market is believed tobe a large number of promotions wherein a toothbrush is given away free. Infact, this year, about 30 per cent of the annual production of toothbrushesis estimated to be given away free as part of a co-promotion offer withother brands, or through buy-one-get-one free offers from toothbrushmanufacturers themselves.
Interestingly, within the total toothbrush market, the fastest growingsegment is the premium segment of Rs 20 and above--the other two segmentsbeing the discounted segment (below Rs 10) and the popular segment (Rs 10 toRs 20). While in January '98, the premium segment had a share of 4.6 percent in value terms, by August '98 it had climbed up to 6 per cent and byAugust '99, the segment had doubled its size to 12.8 per cent.
``A shift is happening. The premium segment is growing faster than the othertwo segments,'' says S Sen, brand manager of Smithkline Beecham ConsumerHealthcare (SBCH), whose Aquafresh brand has captured almost 50 per cent ofthe premium toothbrush market-and 6.4 per cent of the total toothbrushmarket, according to the ORG figures for August '99.
According to industry watchers, there are three reasons contributing to theshift to premium toothbrushes:
Consumers have become more conscious of product attributes, and withthe value-for-money equation changing, are willing to pay more;
Consumers have more disposable income to spare for value-addedbenefits;
Manufacturers of toothbrushes are pushing the higher-margin premiumtoothbrushes more.That everyone wants a share of the premium segment is clearly evidentconsidering the number of new launches in the premium segment in the lastone year. Colgate-Palmolive launched its ColgateTotal at Rs 20 in November'98 and later Active Flexible at Rs 25 in May '99; HLL came out with itsClose-Up Contact priced at Rs 22 and Pepsodent Gum Care at Rs 23 in Nov '98,while Oral-B Indicator hiked its priced from Rs 20 to Rs 24 in January'99.
``Push strategy from manufacturers will definitely be towards growing thepremium segment because the margins are better there,'' agrees Sen. Themargins in the premium segment are believed to be five times more than onthe average toothbrush. In terms of projected growth, market watchers claimthat it will take sometime to go back to the original growth rate of 4 to 5per cent, led by an expansion of the market. ``No one wants to be the firstone to stop these promotions,'' says an industry source.
Eventually though, two factors could drive growth: penetration will lead tovolume growth; and two, the shift to the premium segment will lead to growthin value. The toothbrush market is dominated by four players who controlnearly 70 to 75 per cent of the market. The rest is captured by very strongregional players like Ajanta and Ajay.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.