However, both the companies said India continues to remain a value market with consumers of oral care and beauty products still entering the market often buying lower-priced options or using these products less frequently.
“India as a country [is] on its way to being the third-largest economy by 2030, and [is] the fastest-growing economy among the larger economies in the world. And while that has slowed down, it’s slated to be the fastest,” said Prabha Narasimhan, MD & CEO, Colgate-Palmolive (India), at the Consumer Analyst Group of New York Conference in Florida, US.
Colgate-Palmolive’s market strategy
India presents a “very, very attractive” opportunity for consumer packaged goods companies, according to Narasimhan, who pointed to India having 200 million high- and upper-middle-income households by 2030, coupled with the growth of modern retail and e-commerce.
“These, coupled with each other, also leads to a change in the retail environment, pushing more and more towards the self-service and the e-commerce type of retail, which is always good for a company like ours because it allows for discovery of products, which then makes it share-accretive, margin-accretive, premiumization accretive,” she added.
In FY24, Colgate-Palmolive (India), the maker of Colgate toothpaste and Palmolive body wash, reported sales of ₹5,644.18 crore and a profit of ₹1,323 crore. Its products reach 272 million households in India via 7 million outlets. Colgate is the largest oral care brand in the country.
While oral care penetration has increased dramatically in the past decade, product usage still lags in both urban and rural markets, she said. For instance, 80% of urban India does not brush twice a day; only one out of two rural consumers brush daily.
“Premiumization is also quite low if we compare it to comparable categories like bathing soaps or shampoos. So, on both vectors, whether it’s consumption or its value, there are tremendous opportunities for us to grow,” she added.
Its premium brands include Colgate Total, Visible White, the recently-launched Periogard Regimen, and Palmolive body wash.
“We have three legs to that (premiumization). Colgate Total, we see the success of Colgate Total, and penetration in India of Colgate Total still remains in single digit and a huge opportunity. Similarly, Visible White. And similarly, leveraging our extremely strong partnership with the dentists in the country, built over numerous decades to sell a therapeutics portfolio,” she added.
L’Oréal’s expanding presence
Meanwhile, French cosmetics group L’Oreal also emphasized the growing consumer base in India. Nicolas Hieronimus, CEO, L’Oreal, speaking at the same conference, said that 500 million new consumers in emerging markets will be able to afford L’Oréal products by 2030, with half of those in India.
L’Oreal counts countries such as Brazil, Mexico, India, Thailand among others as emerging markets. China is part of its North Asia business that also includes Japan.
“It’s (India) definitely a market that was not ready for L’Oreal in terms of distribution network, in terms of purchasing power a couple of years ago, but now, it’s ripe for us and accelerating,” he said.
The company sells a wide range of brands, including L’Oréal, Maybelline New York, Garnier, Lancôme, Yves Saint Laurent, and Prada fragrances.
India has seen a surge in demand for beauty products over the last decade. In fact, India’s beauty and personal care market is projected to touch $30 billion by 2027, per a 2023 report by Redseer Strategy Consultants along with Peak XV.
“We just launched CeraVe (skin care) last year in India and half of the luxury portfolio is not even distributed there, so we are at the very beginning of our emerging market adventure because now there are consumers that can afford our products, but also that can access our products on their phone,” he said.
L’Oréal doubled its emerging market sales between 2020 and 2024 (from €3.5 billion to €7 billion), accounting for 16% of the company’s sales.
“Suddenly, you have millions of young men and women that can find our products and buy them from their phone, instead of having to go to small stores where our catalogue was not represented. So, it’s a big opportunity for L’Oreal,” he added.
