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The competitive landscape in the Indian decorative paints market has been growing rapidly. An increasing number of new players, across construction-related sectors, are entering the market to tap into the high growth potential of the Indian construction chemical industry. Furthermore, existing firms operating in the market are also seeking to strengthen their presence in the decorative paints sector. JK Maxx Paints, a subsidiary fully owned by JK Cement, raised another 20% stake for approximately INR 600 million in Acro Paints in July 2023.
JK Cement, in India, is also based in the northern region of the country. The firm has 65% of the installed capacity in North India. Thus, Acro Paints, also based in North India, will receive synergy benefits from JK Cement’s presence in the region. The benefits will be significantly seen in the marketing and sales category.
Amid the fast-growing competitive landscape in the Indian construction chemical market, having a wide-scale distribution network can enable businesses to drive sales and volume growth. The parent firm’s presence in the northern part of the country will, therefore, enable Acro Paints to leverage the distribution and sales network of JK Cement.
Other players in the decorative paints market are also seeking to expand their distribution network across India. Berger Paints, for instance, is planning to expand its distribution footprint. Furthermore, the paint firm is also planning to build manufacturing units in West Bengal and Odisha, as it expects to face stiff competition from Grasim Industries over the next three to four years.
As part of its distribution expansion strategy, Berger Paints is expected to address the network gap in Karnataka, Maharashtra, Tamil Nadu, Rajasthan, Madhya Pradesh, Telangana, and Andhra Pradesh. All of these states have stable paint consumption. Consequently, if the firm does position well and gets its distribution network right, the growth opportunity is high for Berger Paints.
Currently, the eastern states, coupled with Kerala and Uttar Pradesh, are a big market for Berger Paints. In the short term, the firm is expected to develop its distribution network in western states like Gujarat and Maharashtra, while also focusing to improve the network in Delhi and Haryana. The aggressive push across India is part of the firm’s strategy to garner a 20% market share in the Indian decorative paint segment by the end of 2023. The push to develop and improve its distribution network is also driven by the aggressive strategy adopted by Grasim Industries.
Going forward, ConsTrack360 also expects other players in the segment to expand their distribution network in India. Kamdhenu Paints, for instance, is also planning to boost its market share by expanding its dealer and distribution network. At present, the firm is working with 4,000 dealers. However, it plans to take the number well past 8,000 from the short to medium-term perspective. Through this distribution network, the firm aims to increase its presence in the northern and eastern parts of India.
With construction activities also picking up pace in non-urban centers of India, ConsTrack360 expects these firms to also target distribution network expansion in Tier III cities and beyond from the short to medium-term perspective.
Overall, many more players are expected to adopt the same strategy to increase their sales and order volume, as competition continues to intensify in the decorative paint market. According to ConsTrack360, the overall construction chemical industry is expected to increase from US$5.1 billion in 2022 to reach US$8.1 billion by 2027. The growing market size means that more players, from other construction-related business verticals, might target market share in the segment.
