E-commerce is driving premiumisation in India's oral care market, says Colgate-Palmolive India CFO

The rapid shift in India's retail landscape is changing not only where consumers shop but also what they buy, with e-commerce emerging as a major driver of premiumisation in the oral care market, according to M.S. Jacob, whole-time director and chief financial officer at Colgate-Palmolive India.

Speaking at FICCI's Massmerize conference, Jacob said the evolution from traditional neighbourhood stores to modern retail and digital commerce has fundamentally altered consumer behaviour, allowing shoppers to discover a wider range of products and trade up to premium offerings.

"We are also seeing massive changes in the way people have moved from a 'mask' environment, which is go to a store and ask, 'Give me Colgate 100 grams', to a 'pick' environment, which is a modern trade store, to a more evolved discovery environment," Jacob said.

That shift, he said, is translating directly into premiumisation.

According to Jacob, premium products today account for almost half of the toothpaste category on e-commerce platforms, while in kirana stores the premium segment remains only in the single digits. "You can see this switch that's happened. And it's happened relatively fast over the last three, four years. We continue to see this trend evolve," he said.

This indicates how digital retail is reshaping even mature FMCG categories such as toothpaste, where purchase decisions were traditionally driven by habit rather than discovery. Online platforms, aided by wider assortments, richer product information and greater visibility of premium offerings, are increasingly encouraging consumers to explore products beyond their regular purchases.

AI investments must deliver across India's diverse retail channels

Jacob said companies also need to take a balanced approach to investing in artificial intelligence, given India's highly fragmented retail ecosystem.

"It's not easy. India is so complex, it could be many countries depending on which part of the country you are in," he said, adding that investments cannot be concentrated in just one channel.

He noted that nearly 70% of Colgate-Palmolive India's business continues to come from general trade, making it essential to invest in technology that helps distributors manage inventory more efficiently while improving returns.

The company is deploying AI enabled tools that guide sales representatives on which products individual neighbourhood stores are most likely to purchase. It is also working with modern trade retailers on image recognition tools to improve in store visibility and product availability, while collaborating with e-commerce platforms to strengthen its presence across the online purchase journey.

For Jacob, the challenge is not choosing between traditional retail and emerging channels but building capabilities across all of them.

"I don't think it can be just all that or all that. It has to be everything together," he said, arguing that while investments may vary by channel in the short term, India's scale and long-term consumption growth make the returns compelling. "In the long run, I think it's a no brainer."