Homegrown Colgate shines, HUL loses sheen in oral care market

A major shake-up is underway in the Rs 6,200 crore oral care market with FMCG major Hindustan Unilever (HUL) losing ground, with homegrown Dabur eating into its market share and Colgate-Palmolive consolidating its leadership.

As per research firm Nielsen's data on the domestic toothpaste market, HUL has been losing market share. While category leader Colgate-Palmolive gained volume market share in 2014 at 56.7 per cent as against 55.9 per cent in 2013, HUL's share declined to 21.5 per cent from 22.8 per cent in 2013.

Market share of HUL's both brands, Pepsodent and Close Up, dipped during the period. Dabur also gained volume market share from its brands Dabur Red and Meswak in 2014 to 13.4 per cent from 12 per cent in the previous year.

Analysts blame HUL's "wrong strategy" of just focussing on two brands, Pepsodent and Close Up while rivals have focussed on product innovation and offering a bouquet, specially after the entry of Procter & Gamble into the segment albeit little initial success.

When contacted, an HUL spokesperson said: "Oral Care continues to be a priority for HUL. We continue to drive our growth in this category through consumer relevant innovations.

“We have launched several innovations in the category in the recent past, such as Closeup Diamond Attraction, Pepsodent Clove and Salt, and the relaunch of Pepsodent Expert Gum care. These innovations have received very good consumer response.” In the April-December period this fiscal, Colgate- Palmolive increased its volume market share to 56.7 per cent from 56.2 per cent in the year-ago period. HUL, on the other hand, saw it decline to 21.4 per cent from 22.5 per cent in the corresponding period last fiscal.

Dabur also gained and its market share stood at 13.5 per cent up from 12.5 per cent in the same period last fiscal, according to Nielsen data. 

Toothpaste category is highly competitive. Colgate continued to be a leader with better volumes and HUL is consistently losing market share,” Prabhudas Lilladher Sr Vice President - Research (FMCG) Amnish Aggarwal said. Explaining where HUL has tripped up, Morningstar Investment Equity Research Analyst Suruchi Jain said: "HUL has obviously gone wrong in its strategy. While Colgate has a bouquet of products, specific for different tooth problems, HUL followed a general strategy with Pepsodent and Close Up.” The analysts feel although P&G hasn't met with so much of initial success, its entry has intensified competition and is forcing HUL to relook at its strategy.

“Now they (HUL) are trying to follow Colgate and bringing out new variants ... P&G has also eaten into HUL's market share,” Jain said. P&G entered the toothpaste market in India with its product Oral B in July 2013. Recently, HUL launched new variants of Pepsodent, Salt and Clove and and 

re-launched Gum Care. Total toothpaste industry sales in India in 2014 stood at Rs 6,189.67 crore, up 4.12 per cent from Rs 5,944.38 crore in the previous year.