âIt is in synergy with the existing line of our decorative paints business. We have already entered the kitchen and bathroom segment with all possible modern products in recent quarters. The case is marginal now. But it is a concentration. Over time it will become a significant contributor to revenue, âsaid Amit Syngle, President (Sales, Marketing and Technology).
Syngle added that Asian Paints will leverage its existing retail and distribution network for new product segments. âThe market is very disorganized. But the organized sector is growing faster. Asian Paints will be a dominant player in the segment over a period of time.
According to a study by consulting firm PricewaterhouseCoopers and equity research firm Edelweiss, around 70% of the modular kitchen market in India is unorganized. The market was estimated at around Rs 2,000 crore in 2012 and is expected to exceed Rs 6,000 crore by 2016. On the other hand, there are established companies such as Jaquar and a few high-end foreign players in bathroom accessories. bath and decorating space. , most of the market is not organized in India.
Asian Paints entered the modern kitchen space after acquiring a 51% stake in Sleek Group for approximately Rs 120 crore in August 2013. Sleek manufactures, sells and distributes modular kitchens as well as kitchen components including wire baskets, cabinets, appliances and accessories. Asian Paints will expand its kitchen business to all geographies where Sleek’s presence has been limited and streamline its operations. It will use its existing paint dealers for the kitchen business.
In May 2014, Asian Paints signed an agreement with Ess Ess Bathroom Products to acquire the entire front-end business, including brands, network and sales infrastructure, as part of the manufacturer’s strategy. of painting aimed at tapping into the bathroom accessories and decoration market.
According to Syngle, in the paints segment, the repainting business accounts for about 70 percent of Asian Paints’ sales in India. While the sector’s growth rate is set at 11-13 percent, the new construction segment has been hit due to high interest rates.
The repainting activity has developed at a satisfactory pace as the repainting cycle is getting smaller every day. âPeople are going to have their houses painted differently a lot sooner than they used to be. While the cycle was 8-10 years earlier, it’s now three to five years, âsaid Syngle, who is in town to unveil the ColourNext edition of Asian Paints for this year.
ColourNext is a research-based annual color forecasting report that predicts which colors will strongly influence Indian interiors for years to come.
Asian Paints has also started forging alliances with top architects and home designers in top cities. âThey influence homeowners’ decision-making as they go about painting their homes,â he said, adding that the high-end segment has seen good traction in recent quarters. The company will continue to focus on the premium segment, while increasing its penetration in small towns across the country, he added.