Indigo Paints, which started in the year 2000, has focused on small towns so far in its growth story unlike its peers that target metros and larger cities. The company, however, is now pivoting its strategy to expand its market share in the larger towns, Indigo Paint’s Chairman and Managing Director Hemant Jalan told Anuradha Sengupta in an episode of the ‘Life After Listing’ show.
“We are making that pivot now. Strategy can never be something constant in the entire length of a company's journey. It needs to be tweaked every now and then. So now, the attention is shifting away to the larger cities than the ones that we had been servicing up till now,” Jalan said.
According to Jalan, since consumers in the smaller towns are not as brand conscious as those in larger towns and cities, it was easy for the company to sell in smaller towns in the initial days of its journey.
“One realised by first-hand experience that selling in the metros and large cities was very difficult because we had zero brand equity — nobody knew our brand,” he said.
However, it was easy going for the company in small towns thanks to near-nil competition, as big guys such as Asian Paints targeted consumers in the big towns and cities. The strategy worked for Indigo Paints for more than 15 years, Jalan said. During this period, the company built up a brand equity, on the strength of which it has now set its sights on larger towns.
“The low-hanging fruit in the smaller towns are done, which was the more difficult part because you're talking about accessing the hinterland of India and setting up networks there. Now, you're talking about a comparatively lesser number of cities, which are more hospitable to travel to and to work around,” he added.
According to a report by ICICI Direct Research released in 2021, Indigo Paints gets a significant share of its revenue — about 85 percent — from the semi-urban and rural markets. The company had 11,230 active dealers in 2021, as per the report. For the next leg of growth, Indigo Paints is targeting towns with population of 50,000 to 10 lakh compared to the current towns of under 50,000-population, which it services.
In its attempt to expand its business in larger towns, the company is trying to build a relationship with painters and contractors, who bear considerable influence on consumer decision making.
“As you move to larger cities, the role of the dealer diminishes and the role of the influencer becomes stronger and stronger. So, it is completely reorienting the focus of the company,” he said.
Jalan also stressed that while the task comes with its own set of challenges, he is confident of bringing about the change. “It won't happen in a month…We have been trying it for the last two, three months. We are beginning to see success. It may take another few months before that complete change in focus in the sales force comes about,” he added.
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