Why Unilever plc (ADR) (UL) Is Betting on India

Home care expansion

Competitor Colgate-Palmolive Company (NYSE:CL) also sees the benefit of offering more international brands in the home care lines in India.

Colgate-Palmolive Company (NYSE:CL), which recently launched a 5th plant in India with an investment of 20 million dollars, wants to take advantage of the slow growth that P&G has recently seen with their toothpaste line. Colgate-Palmolive Company (NYSE:CL) holds 46% of the market share in oral care, with Unilever holding 19% and local company Dabur India with 11%. With oral hygiene on the rise, the toothpaste market is destined to grow in India. Currently, only 55% of the Indian population uses toothpaste, while only 15% of the market brushes twice a day. With the increasing consumption of toothpaste, Colgate-Palmolive Company (NYSE:CL) profits from the increase of oral hygiene in India.

Unilever plc (ADR) (NYSE:UL) also is poised to grow market share within the toothpaste category as well as all home care lines. As the number 2 leader in oral care, Unilever will use branding to grow trust as a household name in other key categories, increasing category growth across all brands.

The foolish bottom line

By raising its stake in Hindustan Unilever, Unilever plc (ADR) (NYSE:UL) is investing heavily in international expansion. With a repurchase of 22.5% of outstanding shares at a price of Rs 600 per share, Unilever sees the growth opportunity along with rapid consumer adoption as the brand reputation continues to grow.

The article Why Unilever Is Betting on India originally appeared on Fool.com.

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