Her dream came true -- twice. Today, Bhatia's winning smile is beamed around India in simultaneous TV commercials for two rival toothpastes, Colgate Palmolive Co.'s Colgate and Unilever PLC's Close-Up. The dueling endorsements by Bhatia are an emblem of the toothpaste wars now under way in India, home to more than one-sixth of the world's mouths.

For more than 50 years, the word Colgate has been synonymous with toothpaste here. Until 1990, the company amassed fat profits and a two-thirds market share with just one product: a chalky, non-fluoride dental cream far inferior to toothpaste sold in the West. It didn't face much competition from local products or from other Western brands.

Stakes are colossal

Since 1991, when economic reforms loosened restrictions on foreign businesses, a flood of newbrands has come to India, and companies already here have grown more aggressive. Anglo-Dutch Unilever relaunched Close-Up here in 1989 and has been steadily encroaching on its bigger, New York-based rival ever since.

Unilever's local unit, Hindustan Lever Ltd., one of India's largest companies, is cash-rich and bent on unseating the longtime leader. The stakes are colossal. In a country of nearly one billion people, only four out of 10 Indians use toothpaste, compared with nine out of 10 in China. Colgate estimated in 1995 that 177 million more Indians would start using toothpaste by 2005.

"Colgate was a fat cat sitting pretty. Now, they're in a bind," says Shubhajit Sen, marketing manager at SmithKline Beecham Consumer Healthcare Ltd., whose products in India include Aquafresh toothbrushes (but not toothpaste).

Recognising it was facing formidable competition, Colgate signed up Bhatia for an endorsement. Bhatia was born in Hamilton, Alabama, and raised in Toronto, and went on to win the MissIndia-Canada beauty pageant. She returned to her parent's homeland six years ago, where she got a job as a video disk jockey and became a pop-culture icon. She is the bubbly host of numerous TV shows broadcast in English and Hindi, often interviewing young Indians on the streets of Mumbai.

In January, just two days before Colgate was set to launch her TV commercial, it got a rude surprise. Hindustan Lever started airing its own toothpaste commercial, featuring none other than Bhatia. Two years earlier, it turns out, Hindustan Lever had signed Bhatia to endorse Close-Up and shot a commercial, which never aired. With the campaign from its archrival set to air, Unilever decided to take the Close-Up spot out of mothballs.

Bhatia says Unilever "only used it because they heard Colgate was coming out with one." She says she didn't tell Colgate about the Close-Up ad because she figured it was dead. Unilever says the timing of the ad's resurrection was just coincidence. John Guiney, general manager of Asiabusiness development Colgate-Palmolive, says he believes Bhatia made an honest mistake. Both commercials continue to air.

For Colgate, this is just one more hitch in the company's efforts to recover momentum after falling behind the times an consumers' changing tastes. As the Indian public grew more demanding of toothpaste and other products, Colgate didn't keep up with many new products and promotions.

Hindustan Lever, on the other hand, bet early on the emerging Indian consumer class. Years ago, it began investing in repositioning Close-Up to appeal to Indian youth, a generation growing more attuned to global brands and more influential over purchases made in extended-family households. To reach them, Hindustan Lever pioneered TV shows such as a dating game and a singing competition.

Colgate's ads usually have focused on family: Mother, father and child, for example, might discuss dental hygiene with a dentist. In contrast, Close-Up ads have touted freshness and confidence, often featuring a young boyand girl in a close encounter at college or a sports event.

Local brands

"Forty per cent of India's population is young, under 30," says Harish Manwani, director of personal products at Hindustan Lever. "It made sense to go for them." By 1995, Hindustan Lever had cornered 20 per cent of the toothpaste market, up from 5 per cent in 1988.

At first, Close-Up gained mainly at the expense of tiny, local brands and had little direct effect on Colgate's business "There was no share decline for Colgate,' recalls Colgate's Guiney.

Unilever, however, was plotting an all-out assault. In 1995, it set up a toothpaste research and development facility in Mumbai and launched a version of Pepsodent it say has taste and "mouth feel" suitable to the Indian palate. Equipped with an antibacterial agent, the new Pepsodent promised to deliver what surveys showed was Indian consumers' biggest concern: germ protection. In 1997, Hindustan Lever ran a TV commercial claiming Pepsodent was "102%" better than Colgate atfighting germs. The ad sparked a legal battle between the two rivals that is still going on.

Hindustan Lever also has invested in sampling. Promotions launched this year echo military drills. Operation Bharat, or Operation India, targets 24 million rural households, while Operation Hail Storm is aimed at more than 14 million urban households. Salespeople go door to door, offering homemakers a free tube of Pepsodent when they purchase Unilever soap, detergent and other staples.

Unilever's cleverest move yet, however, may be in packaging. The company pioneered the use of singe-use packets, known here as "sachets," delivering shampoo and other products in quantities small enough to be affordable even by poor Indians. Unilever developed a toothpaste sachet, put a nozzle on it, and patented it.

The sachet is far cheaper to make than the traditional laminate toothpaste tube. As a result, Hindustan Lever can sell toothpaste for Rs 3.50, or 8 cents, for a 15-gram sachet, which will last for about 20 brushings.For a poor household, such a product is a far smaller and more appealing investment than a 50-gram tube of toothpaste priced at about Rs 14.50.

Colgate's bottomline in India has suffered. For the third quarter ended December 31, Colgate-Palmolive India Ltd.'s profit plunged 48 per cent to Rs 97.7 million ($2.3 million), compared with Rs 188 million a year earlier, even as sales rose 3 per cent. Although it is still the market leader, in January Colgate's market share for urban areas fell below 50 per cent for the first time in memory, according to Indian market-research firm ORG-Marg.

The battle isn't over yet, though. Colgate has established its own local R&D lab and is adapting global products to local tastes. It is spending furiously: Advertising costs are 17 per cent of sales, compared with 6 per cent in 1990, says Guiney, who has been shuttling between Bangkok and Bombay for the past six months, helping steer the comeback.

As for Bhatia, the toothpaste pitchwoman says she feels sorry for Colgate.Following Hindustan Lever's release of her Close-Up ad, she offered to appear in yet another ad for Colgate. Colgate said it wasn't interested.

Whether it affects India's toothpaste war, Bhatia is pleased with the exposure she has received. If it weren't for Colgate, "no one would ever know I have nice teeth," she says.

The Asian Wall Street Journal