India is one of the most strategic markets for us globally. We are number three in the oral care market. Looking at our 2025 strategy, we are obviously very committed to India. India has also become one of the leading innovation centers in the world, not necessarily in new products but also in technology applications and platforms. Another notable change that has happened in India over the last five to 10 years is, without a doubt, that India has become an incredibly successful talent hub. When you think about talent, innovation and growth, India is where CEOs should be spending their time.
“Increasing volume is also a priority”
Given the consumption opportunity, premiumization, potential category expansion and the tremendous middle class development that is going to happen over the next decade, there is definitely potential for India to become a larger subsidiary for us, especially given the strategic importance we place on India. The key is to get back to a true growth-oriented strategy in India. So the key for us is to leverage our scientific credentials as a global leader in oral care and find ways to develop and drive the market forward. To do that, we need to shift our mindset so that the organization is proactive in everything we do. The average price of toothpaste is still pretty low in India. So there is a real opportunity to continue premiumization as the middle class grows. We (India business) should be a $1 billion subsidiary eventually. That has to be our mid-term goal. With the team, leadership and the plans we have in place, we are confident that we will continue to see category-leading growth. That is ultimately our goal.
How significant is the volume growth in India?
You need balanced growth. It doesn’t make sense to grow just in dollar sales for years if you’re not also growing volume at the same time. Because at the end of the day, volume is what tells us that we’re generating excitement in the market so that people are using the product and using it more. We call it the “three more”: more people, more volume, more money. This is an important concept for us as we think about how we market in any country. And it scales based on the opportunity, the type of innovation, the price point of toothpaste. For example, we compete from the highest price point of 10 rupees all the way up to super-super premium. And it’s important that we innovate at all price points to balance that volume and price. This is very important for our P&L.
Can India surpass other emerging markets in terms of sales?
If you look at the growth of the middle class in India and the opportunity per capita, it should be. Brazil, for example, is in our top three. Brazil has the highest per capita consumption of toothpaste in the world, and we’ve been in that market for over 80 years. And we’ve been doing all the same things that we’re ramping up here now: driving per capita consumption, driving premiumization, bringing unique innovations that incorporate human-centricity to the market. If we execute those three things consistently and don’t get distracted, I think India will clearly be one of the fastest growing markets in the world.Why did it take a player like Patanjali to tell you that there is a big market for such a product?
I would not call the Patanjali brand a natural brand. I would call it a brand with an Ayurvedic positioning and natural ingredients, first of all. Our difference is that we are a science-driven brand. We spend three times more on clinical validation and science than any toothpaste company in the world. And we have more PhD scientists in the business than any multinational company in the world in the oral care space. So our advantage is to stay focused on how to bring scientific credentials to the market. Patanjali was a distraction for us. It was not playing to our strengths. And it distracted us from that, instead of playing to our strengths, as we do today. Now we are doing naturals, because we know how to do naturals. But the bridge from natural to Ayurvedic is a big bridge that we have to cross to gain credibility. We want to bring products to the market that clearly bring scientific, tangible health care benefits to the consumer. And therein lies our differentiation. We are not going to compete with Patanjali’s Ayurvedic credentials. That is the core of the brand. We are upholding the superiority of science and technology. That is where we need to compete. We can and should compete strategically in some of these areas. But that should not be the strategic driver for the company.
Can India perhaps drive global product innovation in the natural sector?
The “Strong Teeth” brand in India is driving innovation, which is one of the biggest operations in the world. The science was developed in New York, but we validated it in India and brought it to consumers. So, based on market developments, India will lead in innovation. And the good thing is, India can pull a lot of innovation from specific markets around the world and develop it where it’s needed locally. I think when you go into a big market like India, companies get distracted and don’t leverage their global priorities and tend to try to do everything on a local basis. This creates inefficiencies and ultimately prevents you from actually enhancing the innovation that you’re doing on a global basis and leveraging it locally.
Colgate had highlighted rural distress as one of the main reasons for the decline in sales volumes. What is the current situation?
We are seeing positive signs in both the rural and urban markets. This is due to a combination of coming out of the COVID pandemic and increased investment in the country. This has increased purchasing power in the rural markets and also helped stabilize the supply chain. So I think we’ve definitely seen a bit of a boost in the rural markets. Right now we’re seeing positive signs for us and the urban markets continue to perform very well.
What has been the most noticeable change in India over the last decade?
The digitization of the market is phenomenal. We have three service centers around the world, one of which is in India. The ability to access talent has been a big focus. The investments that India has made over the last decade are now manifesting as heavy investments in the digital space. So the online market is growing very quickly. There is a lot of infrastructure here to invest in new platforms. China is a good alternative to look at, it is the most advanced online market in the world. But it is a very costly market to do business in. So I think the caveat for India is ultimately to make sure it doesn’t become too costly to continue to develop over time. My sense is that the infrastructure here is great and the opportunity is very big.
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