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Indian Paints Market. Challenges of Global Brands in Indian Paint Market. What is Paints.
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Indian Paints Market Challenges of Global Brands in Indian Paint Market.
What is Paints • Paint is any liquid, liquefiable, or mastic composition which after application to a substrate in a thin layer is converted to an opaquesolid film. It is most commonly used to protect color or provide texture to objects.
Major Challenges for global brand • Brand • distribution network • working capital efficiency • technology play a crucial role.
DARE/barriers to entry for new players • 1. Big players (organized segment) control about 80% of the paints market. • 2. The sector requires high input costs and it is raw material intensive. • 3. Sharp rise in crude and petrochemical prices. • 4. Profit margins are low. Thus volumes play a major role. • 5. Building brands is a major challenge. • 6. Modern and updated production technology needed.
DARE/quick facts • India’s booming real estate sector, growing at 35% year-on-year, is driving the demand for both decorative and industrial paints. 2. Paints’ demand stands at 1.22 million tons, and is projected to grow to 2 million tons by the start of the next decade, says research firm IRL. 3. In volume terms, the paints sector posted a 16% year-on-year growth in FY07 4. Rural markets offer new opportunities for growth. 5. Demand for decorative (architectural) paint is projected to increase 8.7% per year by 2011, which constitutes 70% of the paint market.
Indian Pains Company v/s MNCs • Indian paints & coatings industry has been showing healthy growth over last few years. This • has attracted investments from many multinationals companies (MNCs). While few MNCs • are consolidating their presence in India, new players are planning to enter the market. • Indian market is all set to witness an interesting competition between domestic companies • and MNCs, as they try to increase their marketshare.
Global Leader Now in Indian paint market • Akzo Nobel World Number 1 in industrial segment, to acquire Ici Dulux • Sherwin Williams usa number 1 and globally Number 2 in decorative segment, to acquire • Nippon Paint • Juton Paint