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Mumbai: Procter and Gamble Co. (P&G) is betting on one of Bollywood’s most popular actors to help it break the dominance of Colgate Palmolive Co. and Hindustan Unilever Ltd, which together control 73% of India’s toothpaste market.

The world’s biggest maker of consumer products, which started selling its Oral-B Pro-health toothpaste in mainly urban centers in India in June, is using Hindi-movie actor Madhuri Dixit-Nene to endorse the brand. By enlisting mother-of-two Dixit-Nene, 46, P&G is targeting all age groups, said Harish Bijoor, who advises companies on brands.

“P&G’s success in almost doubling market share for its Oral-B toothbrush brand in Asia’s third-largest economy encouraged the Cincinnati, Ohio-based company to enter the toothpaste market that Colgate has controlled for 75 years," said Abhijeet Kundu, an analyst at Antique Stock Broking Ltd. “Its plan to focus on cities, where rival Dabur India Ltd estimates 77% of the population use toothpastes, may restrict sales growth, according to Kundu.

“To get to a market share of even 4% or so will be a Herculean task," Mumbai-based Kundu said in an interview. “It will take at least two years for the brand to get established."

Colgate has a market share of about 51%, while Hindustan Unilever’s Pepsodent and Close-Up dental creams control 22% of the market, according to Euromonitor International.

Slowing economy

The task may get tougher after the $1.8 trillion economy expanded at the slowest pace in a decade, according to Nitin Mathur, an analyst with Espirito Santo Securities in Mumbai. Procter and Gamble Hygiene and Healthcare Ltd’s profit growth slowed and Colgate’s Indian unit reported a drop in its net income for two straight quarters.

Hindustan Unilever reported a 15% increase in profit in the three months to 31 March. India’s biggest consumer goods maker posted 27,000 crore of sales in the year ended March compared with P&G Hygiene’s 1,300 crore in the year ended 30 June 2012.

P&G Hygiene’s shares, which have risen 8% this year, rose 0.9% to 2,964.95 at 9:38am in Mumbai. Colgate-Palmolive (India) Ltd advanced 1.4% to 1.338.7.

While P&G is selling Oral-B toothpaste in urban areas, Colgate is seeking to boost its presence in rural India as well. At least 329 million people, that’s more than the population of the US, live in India’s villages and small towns don’t use toothpaste, according to a 28 May investor presentation on Colgate’s website.

Rural focus

“There’s really a lot of headroom to grow in rural areas," Prabha Parameswaran, managing director at Colgate, told analysts on a call on 27 May. “Particular focus has been made in the last couple of years in driving rural distribution as rural incomes have been increasing."

The per capita consumption value of toothpaste in India is $0.4, compared with $2.9 in Malaysia and $2 in Thailand, according to a June presentation posted on the Dabur website. Only about 42% of people in the nation’s villages and small towns use toothpaste, data shows.

India’s urban consumers are upgrading to dental creams that soothe sensitive teeth and have whitening properties, according to Manjunath Reddy, a Bangalore-based research analyst with Euromonitor. That helped the market expand 19% to 5,300 crore last year and may allow P&G to leverage on the fact that consumers are continuously upgrading, he said.

Three-in-one Product

One of six Indians suffers from sensitive teeth, according to Colgate’s Parameswaran. The company’s Visible White toothpaste, which is endorsed by 28-year-old Bollywood actress Sonam Kapoor, has been delivering incremental shares, she said.

“P&G is selling a toothpaste that packs multiple therapeutic properties," Ross Strand, a research fellow at P&G said in an interview in Mumbai. The dental cream starts at 59 for a 75 gram pack. The company will also sell two other cheaper variants, P&G said in an e-mail response.

Sensitivity is not a disease, and is a common dental problem that develops due to receding gums, vigorous tooth brushing and grinding, according to GlaxoSmithKline Plc’s website. Glaxo sells a toothpaste for sensitive teeth under its Sensodyne brand, and the British company has a 1.1% share of the Indian market.

P&G’s dental cream would have to provide a functional improvement over existing rivals’ products in order to get customers to shift, said Bangalore-based Bijoor. Most people tend to buy a particular brand and then stick to it for a long time, he said.

Reality show

The maker of Ariel laundry detergent increased its toothbrush market share to 28.7% in 2012 from 16.3 in 2007, according to data from Euromonitor. Colgate’s share dropped to 28.7% from 29.1% the same period, data show.

P&G is betting Dixit-Nene, who acted in box office hits such as Tezaab, Parinda and Hum Aapke Hain Kaun, will help the company replicate the success in the toothpaste market.

The toothpaste was officially introduced at a glitzy event at Mumbai’s Shangri-La hotel with a four-minute long movie touting the benefits of the cream, after which Dixit-Nene appeared from a revolving door clutching a giant replica of the Oral-B tube. She wore a floor-length blue dress, matching the brands’ hue.

By choosing Dixit-Nene, they’re giving a clue as to what their market really is like, said Bijoor in an interview on Wednesday. P&G’s choice of a relatively older brand ambassador suggests that the company is targeting families and older adults, he said.

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