Colgate-Palmolive India has prepared a blueprint that will see the oral care major focus on four key areas, including driving volume growth in toothpastes by focusing on rural India, MD & CEO Prabha Narasimhan said in the latest earnings call.
The other focus areas are premiumisation through science-based innovation, leading growth in toothbrush with superior products and building the personal care portfolio under the Palmolive brand.
Narasimhan said that there was a huge opportunity for growth in India, given its low oral care consumption versus international markets.
“From a macro perspective, India’s per capita toothpaste consumption in urban and rural areas is 0.6x that of the Philippines market. While in urban areas, the consumption is 0.7x of the Philippines market, it is just 0.5x in the rural India,” she said.
Also, only 20% of the urban households brush twice a day in India, while 45% of rural peers brush once a day, she said. “So, the opportunity for us would be to get people to brush more. We will also focus on tapping the 55% rural households who do not brush daily to drive volume growth,” said Narasimhan, who joined the company in September 2022 from Hindustan Unilever.
Besides, Colgate has an 85% market share at the Rs 40 price point, providing scope for taking consumers up the value chain, Narasimhan said.
The company has also relaunched its flagship Colgate Dental Cream with new technology providing best-in-class cavity protection in the March quarter, she said.
At around 50% now, Colgate’s market share has eased from 55-56% in the pre-Covid-19 period, according to sector experts. Colgate still remains the leading oral care player in the country, followed by Dabur, which has a share of around 16% and has grown in the last few years from about 12-13% earlier, sector experts said.
Naramsinhan said that the naturals category, which had emerged after the entry of Patanjali a few years ago, has now plateaued for the industry. However, the segment continues to grow for Colgate, she added.
“Colgate Visible White O2 has been one of the most successful toothpaste launches in India. This represents a huge opportunity for growth,” the MD & CEO said, adding that the company had launched a Visible White whitening pen in the March quarter to provide whiter teeth overnight for consumers.
While the company remains optimistic about growth, analysts say that the oral care category in India remains highly competitive and Colgate’s focus on rural areas may take time to yield results.
“Colgate remains focused on low growth oral care segment across price points, which we believe will curtail the overall growth for now,” Amnish Aggarwal and Harsh Advani, analysts at Mumbai-based brokerage Prabhudas Lilladher, said.
The analysts added that the company has scope to expand its operating margins in the coming quarters given benign raw material costs and price hikes taken over the course of FY23.