Patanjali Ayurved of Baba Ramdev has grown aggressively in the oral care segment and it has concerned the market dominator Colgate Palmolive. The global CEO of the U.S. based MNC, Ian Cook stated that for the first time they have acknowledged competition in the herbal segment in the country. He added that Colgate is in plans to launch new products in the natural segment.
It is the natural segment of the country that has grown rapidly. To capitalize on the same, they are revitalizing the Colgate Active Salt toothpaste package. The short term share impact has come from the native competitors with high promotional activity, he stated.
The toothpaste category in India is valued at Rs 6,000 crore and it has reported 0.8 percent grown in terms of volume in the last year due to the severe slowdown in the rural demand.
He added that they underwent innovation and go-to-market plans already adopted in the country to take corrective measures against the recent short term slowdown due to Patanjali Ayurved. Cook stated that they feel good about making this progress throughout the year.
Colgate has maintained the market share that increased to 54 percent from 48 percent before eight years. Hindustan Unilever is the closest rival and witnessed a drop in the share from 29 percent to 21 percent in this period.
Colgate has not gained a sizeable present in the segment, but the Colgate Active Salt Neem has gained nearly 1 percent market share in five months of its launch. Colgate has also stated that it is launching Colgate Sensitive Clove Essence toothpaste and it is planning to launch fruity flavor toothpaste that are mild and safe for children between two and five years of age.
In the meantime, Baba Ramdev claimed that Patanjali Ayurved had the ability to upstage lead the consumer product MNCs such as Nestle and Colgate. He claimed that Colgate will be below his brand Patanjali Ayurved in 2016 and in another three years the brand will surpass Unilever. He added that Dant Kanti toothpaste of Patanjali made Rs 450 crore of business in the previous fiscal year. This is almost 12 percent of the annual revenues of Colgate that totaled Rs 4,100 crore in 2015.
As per the analysts, Patanjali toothpaste’s hype is for real and the threat is taken seriously by Colgate. The management committee of the firm reviews the onground action regularly and it is planning to handle the competition posed by Patanjali and herbal players including Himalaya and Dabur.
Richard Lui of JM Financial stated that Colgate seems to be quite confident that it can protect and grow its territory while it is cognizing that it is not a normal FMCG competitive battle. He wrote that there seems to be no confident plan that will make Colgate a definite winner in the segment. Moreover, the recent reports state that the herbal players in India are growing rapidly in demand. To be specific, Himalaya and Dabur grew by double digits in the consumer products segment that expanded just by 6 percent.
Now, the success of Colgate lies in framing a successive plan that will make it a definite winner tapping into the herbal market segment in the country