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Ayurvedic Colgate may be first choice of Consumers in 2018-19

Chander Mohan
Chander Mohan

Healthy lifestyle using herbal remedies is what lies at the core of Ayurveda. According to Ayurveda, our universe is made up of five elements, namely, water, air, earth, fire and ether. All these elements are present in humans as three doshasVataPitta, and Kapha. While a perfect balance between these three doshas leads to a healthy body, any imbalance leads to health issues. Now, Ayurvedic medicines aim at establishing a balance between these life energies and creates a spiritual harmony as well.

Another major characteristic of Ayurvedic medicine is that it heals the body without having any side effects. Apart from this, there are innumerable advantages of Ayurvedic medicine that can help you in understanding the significance of such medicines in a healthy life.

The holistic medical system,Ayurvedic medicine came into existence around 5,000 years ago and is known to be the oldest forms of medicine in the world. If a person adopts an ayurvedic lifestyle, then he/she can achieve a total wellness of mind and body to live a healthy and long life.

The name of Ayurveda itself reflects this as its meaning in Sanskrit is “life-knowledge”, and hence its practice can be used to win over the health issues and lead a salubrious life.

This prompted Colgate to combat competition with new launches such as Colgate Swarna Vedshakti and Cibaca Vedshakti. A recent report by Edelweiss states that Colgate’s revenue trajectory is a tale of two sides. While revenue CAGR (compound annual growth rate) over FY10-14 was 15.5 percent, backed by double-digit growth, the revenue trajectory over FY14-17 was three per cent on account of flat to low single-digit growth.

Though the firm remains a market leader, its market share has been declining ever since it peaked in March 2016.

While Colgate remains confident that the market share loss that started from Q1 FY17 is likely to ebb, the gains hereon will be gradual, starting H2 FY19.

The Edelweiss report added that even though Cibaca Vedshakti has garnered market share as high as five percent in certain markets, the product has not cannibalised Colgate’s ayurvedic and other toothpaste categories.

Analysts at Edelweiss estimate Colgate to clock six percent volume growth from FY19. This, coupled with steady price hikes of 3-4 percent and renewed focus on the personal care category with Palmolive, is estimated to pave the way for 10 percent revenue CAGR over FY17-20. Macro drivers such as increasing penetration and low per capita consumption, will also aid the growth.

The firm is now taking steps to ensure deeper penetration of Cibaca Vedshakti and Swarna Vedshakti with more stock-keeping units (SKUs) and superior packaging over competitors.

It is also playing on the pricing front with Cibaca Vedshakti priced 12 percent and five per cent cheaper than Dabur’s Meswak and Red, respectively. Swarna Vedshakti is priced 12 percent and 39 percent lower than Lever Ayush and Patanjali Dant Kanti Advanced, respectively.

But the report warns that the overall competitive intensity has not eased. While Colgate is trying to bring hygiene through lower saver/value packs, competition has been snapping at its heels.

Dabur continues to remain a strong competitor, deepening its penetration in rural and South India, and Lever Ayush is stretching its penetration pan-India and trying to gain market share in the ayurvedic toothpaste segment.

Colgate Palmolive may be the market leader in oral care, but its declining market share since March 2016 is expected to get stemmed with the help of new products launched in the ayurvedic segment.

The decline in market share was triggered by the sudden surge in consumption of ayurvedic toothpastes, led by Patanjali’s entry into the segment.

The firm’s market share has been sliding steadily from 55.7 percent in Q4 FY16 to 53.7 percent in Q3 FY18.

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