ASIAN PAINTS: PAINTING YOUR DREAMS!
The 1930s was a period of revolution and cataclysmic destruction. It saw the unfolding of a total global war, World War II, fought between the Allies and the Axis. Although, a majority of the war was fought on European grounds, it led to a ripple effect on the highly entwined economies of the world. India too was affected. India also witnessed the Quit India Movement in 1942. Both these influential events led to a major economic upheaval, a period of distress as well as opportunities.
In 1942, a temporary ban on paint imports had severely restricted the paint market to a handful of foreign companies and a local player, Shalimar Paints. Sensing an opportunity in these times, 4 young friends (Champaklal Choksey, Chimanlal Choksi, Suryakant Dani, and Arvind Vakil), decided to start a small paints workshop in a garage in Girgaum, Mumbai, in 1945, now known as Asian Paints.
It’s remarkable how a lot of great companies seem to start from a garage!
Although they had spotted an opportunity, it didn’t mean that it would come easy. Competing with well-established companies would be a herculean task and would pose copious hurdles.
In those days, established distributors controlled most of the paints market. Their refusal to stock Asian Paints products, due to their infancy in the market dealt a severe blow to their ambitions; albeit, these 4 friends were determined to sell their product come what may.
They decided that it was in their best interest to sell directly to shopkeepers in the rural hinterland where distributors had a weaker presence.
Rural India was the agricultural powerhouse of the country. Lack of mechanization meant that bulls were held in high regard due to their use as a highly capable draught animal. They were worshipped and celebrated across villages in colorful festivals (Pongal in Tamil Nadu, Pola in Maharashtra) where the horns of the bulls would be painted in bright colors.
After observing these festivals, they started manufacturing small packs (to ensure affordability) of bright colored paints which could be used to paint the horns of the bulls. Since these paints were of superior quality, they would last longer, thereby making them more cost efficient and more attractive. These festivals opened a market for them (Asian Paints). But more importantly, I believe that the intermingling of people from different villages at these festivals helped them gain popularity and a sense of identity.
During those days, most residences would be painted with ‘Distemper’, which was a greyish colored coating made of chalk, lime, and water. It was preferred over the expensive emulsion paints due to its affordability and since it required only a single coat (other paints require multiple coatings). However, the distemper wore a very dull look and would start peeling off with time.
With an intent to ameliorate this, in the 1950s, Asian Paints launched a ‘washable distemper’ which was more durable, affordable, and would make residences more attractive due to their brighter colors.
In 1954, ‘Gattu’, the Asian Paints mascot was launched. The lad was a creation of R.K. Laxman and was intended to appeal to the rising middle class. He was largely successful in doing so, apparent from my mother’s remembrance of ‘Gattu’ when I was writing this blog!
Furthermore, identifying different markets and tapping into them through a strong consumer brand appeal, a continuous innovative product pipeline (and constantly plowing profits back into the business) helped Asian Paints establish itself as a market leader by 1967. They continue to hold this status even today!
In the early 2000s, Asian Paints bid adieu to ‘Gattu’ as a part of revamping its corporate identity and changed its ‘Asian Paints’ logo to the shorter ‘AP’.
Having personally observed my grandfather’s painting business as a young child, I can say with certain conviction that Asian Paints has been the preferred brand of choice for years largely due to, as quoted by my grandfather, ‘ superior quality, better finishing, and innovative products’. These qualities serve as the bedrock of Asian Paints success which is evident from their whopping 60% market share!
Their 26 state of the art manufacturing facilities placed globally enable them to serve over 60 countries. Today, they have a 70000+ dealer/distributor network in India, a stark contrast to the distributors who rejected them in their infancy!
As of today, Asian Paint’s products can be categorized under:
- Decorative Coatings – 83.7% revenue contribution
- International Operations (largely Paints) – 11.6% revenue contribution
- Industrial Coatings – 2.4% revenue contribution
- Home Improvement Business – 2.3% revenue contribution
However, The Home Improvement Business, introduced in 2013, largely comprising of ‘Kitchen and Wardrobe Solutions’ and ‘Bath fittings and Sanitaryware’, has been an underperformer since its inception. It has failed to achieve the high standards of success that Asian Paints has set for itself! This segment contributes only 2% of revenues despite the magnanimous effort that is required in running this segment. It is evident that the expected growth has not come to fruition.
Recently, on account of the Covid-19 pandemic, a surge in demand for health and hygiene products (largely sanitizers) has been observed. To name a few, Parle Products, Dabur, Marico, Zydus Wellness, Emami, Patanjali Ayurved, have all started manufacturing their own ranges of sanitizers.
Interestingly, Asian Paints too has hopped onto the bandwagon with their new sanitizer and disinfectant brand, Viroprotek. It seems to be a bold move considering that this space is a relatively newer area of operations for Asian Paints. The distribution network for an FMCG player is largely different than that of what Asian Paints currently deploys. As per my research, Viroprotek sales are coming largely from online platforms (Asian Paints online store, Amazon, Indiamart etc). It is likely that considering their inexperience in retail distribution and the irregular and sudden lockdowns in cities, they have chosen to take the e-commerce sales route.
Overall, the reviews for their new Viroprotek range have been extremely positive.
Furthermore, they have launched ‘San Assure’, a new sanitization service for residential and commercial establishments which will address the immediate needs of hygienic spaces. Understanding the apprehension that new home-owners/commercial owners will face when looking to paint/re-paint their properties, they have announced a ‘Safe Painting Service’ which is an end-to-end painting service that ensures stringent safety protocols and enhanced supervision without losing out on the quality of work and your mental peace!
Their nimble response to the Covid-19 pandemic speaks volumes of their extraordinary ability at understanding customer needs! The story of Asian Paints is a remarkable one, a one of resilience and an unwavering attitude towards embracing innovation!