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Patanjali’s toothpaste market share doubles, Colgate loses ground

A year of faltering growth didn’t stop Baba Ramdev-backed Patantali Ayurved Ltd. from eating into the share of larger rivals, including market leader Colgate Palmolive India Ltd, in the Rs 10,000-crore toothpaste market.

Patanjali’s share doubled in 2017-18 to 7.4 percent, according to Nielsen data sourced from the industry. Most of it came at the expense of Colgate (see table). Herbal appeal and lower pricing have won Patanjali consumers in the world’s second-most populous nation with 1.3 billion people. Millions now use everything from honey to hair oil made by the company, helping it become the nation’s No 2 consumer goods maker with about Rs 10,500-crore sales in 2016-17. Dant Kanti (Sanskrit for shining teeth), a muddy-brown herbal toothpaste that leaves a tingling taste, is the second-biggest contributor to its revenue

The Rs 4,300-crore Colgate Palmolive is no pushover though. Toothpaste in many homes in India is still called Colgate, a brand recall built over more than eight decades that has given it over half the share in value and volumes. And it’s defending its turf aggressively.

The company launched Vedshakti herbal toothpaste and plans more such offerings. “Colgate is focused on expanding its natural offering by broadening its geographic reach and introducing a wider range of price points,” its parent said in a conference call after January-March earnings.

But Dhanraj Bhagat, consumer and retail partner at consultancy Grant Thornton India LLP, said. “The moment you think about Patanjali, you think ayurveda. They [Colgate] will have a very tough time competing.”Bhagat suggested that the consumer products maker should create a sub-brand and position it accordingly to appeal to the Indian consumers.

And, Colgate Palmolive doesn’t have Baba Ramdev’s brand appeal to bank on. On prime-time Indian television, the yoga guru in is his saffron robes exhorts audiences to reject toothpastes made by multinational companies that at one time rejected the country’s traditional oral-care practices. He hawks Dant Kanti.

While he doesn’t take names on TV, Baba Ramdev had taken to Twitter about two years ago to take on Colgate Palmolive. He tweeted images from the company’s print campaign in the 1980s calling the use of abrasive charcoal and salt to clean teeth as harmful. Colgate’s toothpastes now have both.

To counter that, Colgate Palmolive aggressively spends on advertising. Its Indian arm spent about 12 per cent of its revenue on marketing compared with nine percent globally in 2017-18, , according to an HDFC Securities report.

The global consumer goods maker also has the heft of a deep distribution network of about 58 lakh retail outlets. In comparison, Patanjali’s products are sold through a million retail outlets, and over 5,000 of its own and modern trade stores, and online retailers.

“Patanjali’s distribution is constantly on the rise, but still not as deep as that of Colgate or Hindustan Unilever,” Harish Bijoor, founder of brand consultancy firm Harish Bijoor, Consults Inc, said. Compared to the established players, its distribution reach is only 8 percent of the total market, he said. BloombergQuint

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