A war that is going on for the past 21 years
A global oral care giant, renowned for its dental products, faces intensifying competition in India’s urban markets. As local players leverage aggressive pricing strategies to gain market share, the battleground shifts to modern trade channels, with both multinational and homegrown companies vying to capture the emerging middle-class consumer base through innovation and strategic pricing.
Price Movements
Colgate-Palmolive India’s stock fell 2.16% daily, contrasting with Dabur’s slight gain of 0.15%. Over five years, Colgate surged 90.32%, outpacing Dabur’s 2.60% gain. Meanwhile, Dabur’s one-year return fell 1.94%, while Colgate climbed 2.25%. Analysts link these swings to cutthroat discounting in urban markets. Investors now watch for stabilisation signals as price wars drain margins.
Recent Updates
Colgate’s Q3 net profit fell 2.2%, with revenue rising 4.7%. Conversely, Dabur’s oral care segment grew 9.1%, eclipsing HUL’s mid-single-digit growth. Dabur also claimed the second spot in toothpaste sales, challenging Colgate’s 50% oral care dominance.
Industry-wide, FMCG sales grew 3% year-on-year, yet urban demand lagged at 0.5%. Rural markets, however, expanded 5%, offering respite.
Management Commentary
Colgate CEO Noel Wallace acknowledged “heightened competitive activity,” blaming local players for volume-driven discounts. “We’ll protect brand health while addressing irrational pricing,” he asserted. Dabur CEO Mohit Malhotra countered, “We’re now #2 in modern trade, eyeing the leader’s share.” Both executives flagged urban demand headwinds but vowed innovation-led growth. Wallace aims at India’s 600–700 million middle-class consumers that will be added by 2030 as a strategic priority.
Also read….
Industry Overview
Inflation and stagnant wages have squeezed urban spending, slashing FMCG growth to 0.5% in cities. Conversely, rural demand rebounded 5%, aided by easing commodity costs. Modern trade and quick commerce channels thrive, though kirana stores dominate 70% of sales. Companies now balance short-term discounts with long-term brand investments. “You must adapt pricing to stay relevant,” said Coca-Cola’s John Murphy, echoing sector-wide tensions.
Historical Rivalry
This clash started in 2004 with an ad. That led to the Colgate-Dabur legal clash that set precedents for future development. Colgate’s ad implied Dabur’s Ayurvedic powder harmed teeth, sparking a trademark lawsuit. Courts banned the campaign, safeguarding Dabur’s 80% Ayurvedic market share. Today, Dabur’s financials overshadow Colgate’s, with higher sales growth, profits, and ROE. Despite Colgate’s legacy, Dabur’s stock resilience and Ayurvedic focus position it as a formidable challenger.
In conclusion, as price wars persist, Colgate and Dabur face divergent challenges. Colgate battles urban discounting while protecting margins; Dabur leverages Ayurvedic credibility and rural reach. Industry watchers predict rationalised pricing by late 2025, but innovation and channel agility will decide winners. With India’s middle class expanding, both giants must balance aggression with endurance to capture the next growth wave.
Written By Fazal Ul Vahab C H
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
