Motivation & Methodology

The impact of e-commerce on the Consumer Packaged Goods (CPG) industry is inevitable. Year on year, we see an upward trend in the share of CPG sold online.

In this report, we seek to understand trends in this growing online ecosystem through the lens of alternative data, with a specific focus on toothpaste products.

We gathered product data and customer reviews from ecommerce websites like to extract insights on consumer trends, brand market share, product dynamics and more.

We used reviews as a proxy metric for estimating demand, which for the purposes of this report we assumed is strongly correlated with actual sales. Machine learning models, notably Gradient Boosting, were employed to draw out inferences.

You can download a PDF version of this report by clicking here

Online Sales of Toothpaste is Small but Growing

Online sales represent ~5% of total sales, but the online market is growing 6x faster.

Online Toothpaste Market Share (2019)

As of 2019, based on our analysis, a large chunk of market shared is owned by non-mainstream brands.

Source: Semantics3

Online vs Offline for Key Players (2019)

Traditional market leaders don’t have as entrenched a lead online, as they do offline.

Evolution of Online Market Share (2016 - 2019)

Notable Movers in the Market

Since market leadership is less entrenched, it’s not uncommon to see new brands making rapid progress.

Companies that’ve seen rapid growth are often very young, especially in comparison to mainstream incumbents

Factors & Trends:
Virtual shelf position is a strong indicator of sales

Package quantity is notable too - people buy CPG in bulk online

But all else equal, “product features” is the factor most strongly correlated with sales

Specifically, having the tag “Clinically Proven” provides the most lift to product performance

In terms of sheer sales, these are the dominant trends among products with the highest sales

And here’s how these trends have evolved over the years

“Natural” toothpastes seem to be the flavor of 2019.

Brand Switching among Consumers

We also looked at direct competition between brands. Specifically, we looked at how often a customer of one brand subsequently purchased products from another brand.

Broadly, we observed that consumers of popular mainstream brands like Colgate, Crest and Sensodyne typically opt for other brands from the same group when they do switch.

This leads us to infer that most new-age brands build market share by attracting new consumers (in the online context), not by drawing market share away from incumbent brands.

Download a PDF version of this report here: Ecommerce Trends in the CPG Industry: Toothpaste

About Semantics3: Semantics3 empowers customers with the complete e-commerce data science stack in a scalable, accurate and cost-effective manner.