Colgate MD Bets Big on Innovations to Drive India Growth
Two years after Prabha Parameswaran
took over as Col gate India's managing director, the top oral care marketer
enjoys a record 56% share in the market after increasing its revenues by more
than one-third under Rs 3,600 crore.
her leadership so far at ` Parameswaran is confident about keeping up the momentum. In an interview with ET's Sagar Malviya, she said a strong innovation funnel will drive Colgate's growth in the country and its new launch, Colgate Maximum Cavity Protection, is an example of that.
Edited excerpts: Don't you fear that your latest product, Colgate Maximum, could cannibalise some of your existing variants instead of rival brands?
Maybe there will be a bit of cannibalisation within our own portfolio, but it will happen at the premium end. It (Colgate Maximum) is priced at a premium to the family brand that exists.
What we anticipate is that a lot of family brand consumers will upgrade. India was also one of the principal countries where consumer testing was done to agree that the product should be taken nationally. We also think it will attract non-Colgate users which we have seen in markets such as Brazil, Turkey and Malaysia, where the product has been launched.
In the last two years, Colgate India has grown well due to doubling of rural reach and new product launches. Are these factors sustainable to drive future growth?
We did expand our distribution, but direct ones. One advantage of that was we were able to place wider assortments. The middlemen will sell bestseller and not necessarily what the wider consumers want. According to Nielsen, there is one store opening every five minutes in India. For growth, we have to be in all these stores. So there is more headroom to drive distribution in foreseeable future.
Aren't you worried that your global rival Procter & Gamble has gradually stepped up its presence in oral care segment in India?
We have a strategy and growth plan and we will stay and execute that with excellence. Competition will come and do what they have to do. From an investment standpoint, advertising builds brands and the future. When the wallet is squeezed, you have to find ways to tempt the consumers and we are doing it through innovation, making it visible and making it available at an arm's length.
But how will you increase usage of your products even if it's made available to them?
In urban India, our penetration is over 90% but in rural areas, it is 63%. If we translate that into population, around 380 million people don't use toothpaste in India. That is the size of the US population. We have also started the journey into premiumisation but we aren't there yet when I compare it to other countries. From a category standpoint, we can double the size if we look at this growth driver and headroom. If we look at our portfolio, we still think there are opportunities.
Instead of one toothpaste in the home, people are now using different toothpastes. That itself will help us change the portfolio. Now, looking good is important and everyone wants white teeth. So the whole area of beauty opens up and there can be many subsegments within it. We have a dedicated group in India that looks at innovation for the country.
Colgate has been India for over 75 years, yet the country contributes only about 3% of your parent's total sales. Don't you think Colgate could have grown the market more over the years?
The parent company expects growth from India, but the country is not a new emerging market which is a flavour of the month. We have been here and they know what to expect and we are here for the long term. We have accelerated penetration, the country is ready for new benefits and we have got in there. We are looking at new ways to drive consumption. Organisationally, we are very prepared for the change in retail environment as well as consumers changing.
her leadership so far at ` Parameswaran is confident about keeping up the momentum. In an interview with ET's Sagar Malviya, she said a strong innovation funnel will drive Colgate's growth in the country and its new launch, Colgate Maximum Cavity Protection, is an example of that.
Edited excerpts: Don't you fear that your latest product, Colgate Maximum, could cannibalise some of your existing variants instead of rival brands?
Maybe there will be a bit of cannibalisation within our own portfolio, but it will happen at the premium end. It (Colgate Maximum) is priced at a premium to the family brand that exists.
What we anticipate is that a lot of family brand consumers will upgrade. India was also one of the principal countries where consumer testing was done to agree that the product should be taken nationally. We also think it will attract non-Colgate users which we have seen in markets such as Brazil, Turkey and Malaysia, where the product has been launched.
In the last two years, Colgate India has grown well due to doubling of rural reach and new product launches. Are these factors sustainable to drive future growth?
We did expand our distribution, but direct ones. One advantage of that was we were able to place wider assortments. The middlemen will sell bestseller and not necessarily what the wider consumers want. According to Nielsen, there is one store opening every five minutes in India. For growth, we have to be in all these stores. So there is more headroom to drive distribution in foreseeable future.
Aren't you worried that your global rival Procter & Gamble has gradually stepped up its presence in oral care segment in India?
We have a strategy and growth plan and we will stay and execute that with excellence. Competition will come and do what they have to do. From an investment standpoint, advertising builds brands and the future. When the wallet is squeezed, you have to find ways to tempt the consumers and we are doing it through innovation, making it visible and making it available at an arm's length.
But how will you increase usage of your products even if it's made available to them?
In urban India, our penetration is over 90% but in rural areas, it is 63%. If we translate that into population, around 380 million people don't use toothpaste in India. That is the size of the US population. We have also started the journey into premiumisation but we aren't there yet when I compare it to other countries. From a category standpoint, we can double the size if we look at this growth driver and headroom. If we look at our portfolio, we still think there are opportunities.
Instead of one toothpaste in the home, people are now using different toothpastes. That itself will help us change the portfolio. Now, looking good is important and everyone wants white teeth. So the whole area of beauty opens up and there can be many subsegments within it. We have a dedicated group in India that looks at innovation for the country.
Colgate has been India for over 75 years, yet the country contributes only about 3% of your parent's total sales. Don't you think Colgate could have grown the market more over the years?
The parent company expects growth from India, but the country is not a new emerging market which is a flavour of the month. We have been here and they know what to expect and we are here for the long term. We have accelerated penetration, the country is ready for new benefits and we have got in there. We are looking at new ways to drive consumption. Organisationally, we are very prepared for the change in retail environment as well as consumers changing.
ET 140529
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