Nevertheless, there is a need for incumbents to up the ante. The reasons are there to see. While Colgate has maintained its leadership position over the years despite phases of rising competition, it recently lost some market share. Also, though Patanjali has a minuscule market share (about 1.9 per cent), increasing consumer preference towards health-positioned toothpastes is a risk.
Dabur's Red toothpaste enjoys first-mover advantage in this segment and is growing at a healthy clip. "Today, the brand controls nearly seven per cent market share, from five per cent two years ago," says Lalit Malik, chief financial officer, Dabur India.
However, Dabur, incidentally, has the highest product overlap with Patanjali and is already fighting it in the honey segment where the latter has priced its products about 40 per cent lower. Its Chyawanprash, digestives and OTC ethicals and juices could also see pressure. Dabur, however, plans to launch premium, value-added products to grow market share of its honey products.
In hair oils, while Dabur Amla has so far retained market share, companies like Emami and Bajaj Corp sound confident. Sumit Malhotra, managing director, Bajaj Corp, says, "We have grown by seven per cent in January, higher than the industry growth of three per cent." Emami's Kesh King, too, continues to do well. Emami's Zandu portfolio of balms competes with Patanjali product but here, too, the management insists the Zandu portfolio is growing its market share.
ITC and Godrej Consumer Products (GCPL) have fewer segments where Patanjali is competing, and are unlikely to feel the heat, say analysts. For Nestle analysts at IIFL believe Patanjali will not have a major impact in the instant noodles category but its foray into cow-based milk powder could be a risk.
While incumbents enjoy strong cash flows and brand equity with a robust execution track record, too, and are well-placed to compete efficiently through innovations, advertising and promotion, what could emerge as a real worry is that the baba businesses are sprucing up their act as they expand product portfolios and enhance brand image. They are also working on expanding their distribution reach and going online. Many already have large followings and hence, captive customers.