Monday, September 17, 2007

Business: Toothpaste Market in India

Toothpaste market in India is worth Rs 2200 Crore (2006).

In India, per capita toothpaste consumption stood at 74g in 2005, which is amongst the lowest in the world, compared to 350g and 300g in Malaysia and Vietnam respectively.

Toothpaste enjoys a country wide penetration level of 50%.

Rural: 39%
Urban: 75%

Oral hygiene continues to be under aggressive competition, with sales increasing by a modest 3% in current value terms in 2006 to Rs. 2,400 crs. Toothpaste accounted for a whopping 83% of value sales.

HLL's market share in the dental care market has grown from a mere five per cent in 1979 to an impressive 36 per cent today, whereas Colgate-Palmolive has been seen its market share decline from a dominating 75 per cent to a struggling 56 per cent.

Segments:

Popular Segment - Colgate Dental Cream, Pepsodent - Declining

Low Price Packs - Cibaca, Babool - Growing

Niche Products - Ayurvedic and Sensitive toothpastes - Stagnant

Freshness Segment - Colgate MaxFresh,Close Up,Anchor Gel - Growing

Price-based Segments:

Regular Segment: 100 gm: Rs 25-30

Low Price Segment: 100 gm: Rs 14-20

The Lower Price Point segment accounts for around 25% of total category volumes. Small and regional brands from the low priced segment are expected to perform well because they are often close to the market, respond faster to changes and are willing to learn from mistakes.

Colgate

Colgate has been present in the domestic oral care market (of India) for the last 70 years.

A dominant position in the toothpaste segment with a 48% market share in the domestic market.

1.5 times the second largest player.

Cibaca was acquired by Colgate in 1994 from Ciba Geigy.

The company today has two main brands in the toothpaste segment � Colgate and Colgate Cibaca.

Colgate Cibaca has risen to become the 4th largest paste brand in the country in volume terms after Colgate Dental Cream, Pepsodent and Close-Up

Pepsondent

Brand of Hindustan Unilever Ltd (HUL, erstwhile HLL)

In a declining toothpaste market, HLL has managed to grow its brands and this has been attributed to Pepsodent’s value proposition being redefined.

Pepsodent’s share has been climbing steadily from 15.5 per cent in the last quarter of 2002 to 16.3 per cent in the quarter ending June 2006.

HLL's Dental insurance scheme, being launched through a partnership with the New India Assurance, offered a dental insurance of Rs 1,000 on purchase of any pack of Pepsodent.

Anchor

Anchor belongs to Anchor Health and Beauty Care (AHBC), a part of the Anchor Group (makers of Anchor Electrical switches).

Anchor White Toothpaste was positioned as India‘s first British Dental Health Society certified 100 per cent vegetarian toothpaste, in 1997.

Anchor and Ajanta price their offerings at more than 40% discount, giving the market leaders a run for their money. These low priced competitors accounted for more than 80 per cent of the growing "discount segment".

Top 5 Brands – Market Share (2006)

1. Colgate Dental Cream: 34%

2. Close-Up: 14%

3. Pepsodent Complete: 10-11%

4. Colgate Cibaca Top: 5.7%

5. Colgate Fresh Energy Gel: 3%

6. Other Brands: 32.3%

a. Anchor, Babool, Ajanta, etc

Company - Market Share (Value), 2006

1. Colgate Palmolive Ltd: 47.3%

2. HLL: 30%

3. Dabur: 7.2%

Source (Market share): AC Nielsen Market Information Digest India, 2006

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