Col­gate MD Bets Big on In­no­va­tions to Drive In­dia Growth

The Economic Times - - Business Of Brands -

Two years af­ter

took over as Col­gate 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 her lead­er­ship so far at .` 3,600 crore. 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.

Prabha Parameswaran

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