Colgate CEO points to urban warfare via deep discounts

economictimes.indiatimes.com:

consumer goods companies marked by steep discounting to attract urban shoppers, said Noel Wallace, global chief executive officer at Colgate-Palmolive, indicating sluggish urban demand is forcing companies to engage in bleeding price wars.

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«It's not unusual in terms of the heightened competitive activity as some of the manufacturers, particularly local players, are chasing more volume in their categories,» Wallace told investors. «India was probably the most notable with a significant increase in competitive activity in the urban space particularly in the modern trade where we saw a multitude of competitors discounting more to drive volume.»

Wallace said he expects fast-moving consumer goods (FMCG) companies to become «more rational» and the market to stabilise over the next few quarters. «We are going to address that, and we will make sure we protect the health of the brands as we do that.»

The company behind the eponymous toothpaste brand controls half the Indian market for oral care products. Colgate-Palmolive (India) had earlier pointed to a weakening demand environment, especially in urban markets, suggesting a potential deceleration in consumer activity or a shift in purchasing pattern. Colgate India reported 2.2% drop in net profit with revenue growing a modest 4.7% in