Colgate-Palmolive sees early signs of rural revival, remains optimistic about growth

Oral and personal care specialist Colgate-Palmolive said that the rural market was showing early signs of recovery, raising hopes of an end to the prolonged slump that has gripped India’s rural market since the Covid-19 pandemic.

Speaking at the company’s investors meet on Wednesday, Prabha Narasimhan, managing director and chief executive officer said that the company is aiming to increase its consumption by changing consumer behaviour. In the long run, the company aimed to drive up its volume-based growth in the oral category.

The company’s new CEO seemed optimistic about capturing the immense potential of rural markets, pointed out analysts.

“One year into Prabha Narasimhan’s tenure as its CEO, the Colgate India organisation seems more charged-up, though real results are yet to be seen. Plus, the rural factor is still not all that clear, in our view,” said analysts from JM Financial after attending the event.

“The market got excited with Colgate’s April-June quarter results which led to a nearly 9% rally in the stock price but we are not sure if that level of growth is repeatable soon,” they added.

In the investor’s meet, the company highlighted various of its measures taken to drive growth in both the toothpaste and toothbrush sectors while tapping the rural market.

In the meeting, the country’s largest oral care company highlighted that the rural per capita toothpaste consumption stood just at 0.6 times the national average. 55% of the rural consumers did not brush even once a day and only 20% of the urban households brushed twice a day.

Under its digital initiatives, the company aims to increase its market share by improving the process of digitalization and better product assortments.

Colgate has made rapid strides with its AI-led assortment tool ‘Smile stores’. The AI-based image recognition tool provides store-level customized service.

In a well-penetrated oral care category, Colgate aims to drive premiumization through science-based superior products.

The company highlighted its Colgate Active Salt brand as doing exceptionally well in the South and East Indian markets.

The company has revamped Colgate Total and the initial response has been encouraging which was evident with its double-digit growth.

Colgate Strong Teeth is growing in double digits and added over 2 lakh total distribution points. The company has its products displayed in over 17 lakh outlets directly.

The company would continue to drive up the premiumization of its brand by capturing the market with its emerging categories of kid’s toothpaste, whitening and electric toothbrushes.

The company told investors that its MaxFresh toothpaste helped it penetrate the market by increasing its growth by two times.

With the launch of Visible White and a few other products, the company is aiming to expand its oral beauty range.

Colgate believes that it can gain a share from Ayurvedic/naturals segment as it doubles down on its science-backed superior efficacy products.

Colgate has also launched a whitening pen (Rs 1,499 consumer price), which offers a long-lasting (6 months) whitening effect after 7-14 days of application.