While the Patanjali effect seems to be waning in the overall FMCG market as rival firms align product ranges and regain lost market share, the big boys are still struggling to crack the Patanjali code in the oral care segment.
Industry executives say that companies such as Colgate-Palmolive and Hindustan Unilever have been losing market share to the Baba Ramdev-led Patanjali in oral care even as the latter’s overall sales and revenue growth has come to a screeching halt. For instance, Colgate’s toothpaste market share has been constantly falling since 2016 — from 55.3 per cent in FY16 to 53.4 per cent in FY18 and 52.2 per cent in FY19.
“Bulk of the market share loss can be attributed to the premium segment such as Colgate Sensitive and Colgate Total. The premium segment revenue contribution has plunged to four per cent compared with eight per cent earlier,” said Naveen Trivedi, research analyst at HDFC Securities.
HUL’s share dropped 80 bps to 16.3 per cent owing to the continued challenges from Dabur and Patanjali in oral care segment. Patanjali, which challenged the multinational’s dominance of the segment with its Dant Kanti toothpaste, added 150 bps over the last year to its market share, bringing it to 8.6 per cent. For Dabur, too, the toothpaste category has grown (by 9.3 per cent) led by continued growth in the Dabur Red product line, which grew by 17.5 per cent.
Similar trends are also visible in the toothbrush category, where Colgate has lost market share from a peak 47.3 per cent in Q3FY17 to 45.2 per cent now. “We expect competition from Patanjali and Oral B to draw Colgate into a price war. We also expect aggressive consumer and trade promotions as Colgate tries to claw back volume market share,” said Shirish Pardeshi, a senior analyst at Centrum Broking.
To counter Patanjali’s herbal appeal and lower pricing, its rivals are aggressively pushing an improvised toothpaste portfolio. Colgate, for instance, has been betting on its Vedshakti line over the past few quarters. “However, the national rollout of Swarna Vedshakti is yet to show up in market share gains,” Pardeshi noted. HUL, meanwhile, had admitted at an earnings conference recently that “there is more work for the firm to be done in oral care”.