Colgate-Palmolive India’s New MD lists 4 ways to regain market share

Colgate Palmolive India Ltd’s new managing director said regaining lost market share and driving revenue growth are among the key priorities for India’s largest toothpaste maker.

Ram Raghavan, who took over as the managing director in July after spending nearly 22 years in the company’s other divisions, held his first interaction with analysts over the weekend.

The toothpaste market has been intensely competitive even as the overall demand remained subdued, the analysts said. Colgate-Palmolive’s market share fell 600 basis points between 2014-15 and 2017-18 on account of Baba Ramdev-backed Patanjali Ayurved Ltd.’s “rapid rise” with its Dant Kanti toothpaste, according to Credit Suisse AG.

Yet, the maker of the namesake brand managed to maintain its market share in the toothpaste category above 52 percent over the last 18 months, the brokerage said.

According to another brokerage, Edelweiss Financial Services Ltd., Patanjali even ate into the share of Pepsodent and Close-Up maker Hindustan Unilever Ltd. and forced herbal products maker Dabur India Ltd. to tweak its dental offerings.

Here’s how Colgate-Palmolive plans to regain its lost market share:

Focus On ‘Naturals’ Segment

Colgate-Palmolive has pushed its ayurvedic variants Cibaca Vedshakti and Swarna Vedshakti in North India and South India, respectively, to counter the challenge from Patanjali. But Credit Suisse said Raghavan in the analyst meet acknowledged that consumers hadn’t responded readily to their ‘naturals’ 

Expanding Kids Range

Colgate-Palmolive plans to add several toothpaste brands aimed at children to build long-term loyalty.

Differentiated Communication To Expand Market

The penetration of toothpaste in India stands at 80 percent, according to analysts, including Credit Suisse, Edelweiss and UBS AG, indicating a decent scope for expansion. Citing various studies, Colgate-Palmolive’s management at the analyst meet said consumers in India on average brush only up to five times a week. Only 30 percent of consumers brush once a day.

Moreover, only 30 percent children in India brush twice with only 20 percent in urban areas doing the same, it said. The company will focus more on “communicating” the importance of brushing teeth twice a day.

Renewed Vigour In Palmolive Range

The company acknowledged that the pace of new launches, incremental distribution and marketing in its personal care brand Palmolive has become “soft”. It has taken measures to revive the brand in the last 18 months and the range of launches planned in Palmolive will be expedited, Raghavan said.

While Colgate-Palmolive steps up to protect its domination, Edelweiss said that the company may focus on revenue and volume growth at the expense of operating margins in the near term. Colgate-Palmolive’s consolidated revenue grew at an annualised rate of less than 3 percent over financial years 2015-2019. But its operating margin improved from 20.8 percent to 27.7 percent during the period, according to company filings.


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