Podcast | Digging Deeper- The Asian Paints story: Colour-coding the success mantra

The beginning as was the case with most pre-independent businesses in India was in response to the Swadeshi movement and the company was initiated in a garage in Mumbai by four friends Champaklal Choksey, Chimanlal Choksi, Suryakant Dani and Arvind Vakil in February 1945.

Post the tumultuous years of World War II and the Quit India Movement, the company faced a few setbacks but by 1952, Asian Paints was reporting an annual turnover of Rs 23 crore and by 1967, it had become the leading paints manufacturer in the country.

The four families continued to hold the majority shares of the company but acrimony began to simmer within the unit over the global rights in the 1990s. The conflict led to the Chokseys selling their 13.7 percent shares and subsequently, the Choksey shares were bought by the remaining three families and Unit Trust of India (UTI). The Choksi, Dani and Vakil families hold a share of 47.81 percent in the company

The consumer-friendly brand

 Much like its once famous mascot Gattu, Asian Paints never resisted the idea of identifying itself with the budget conscious consumer. In the 1950s, for instance, the company launched a "washable distemper", which was a notch above the inexpensive distemper and the rather steeply positioned plastic emulsions.

This became one of their signature creations and came to be known as Tractor Distemper with the famous tagline “Don't lose your temper, use Tractor Distemper." Till date, the product is advertised as an affordable paint for those who want an impressive home but without burning a hole in their pockets.

The advertising smarts of the company have constantly created a certain connection between the products and the consumers.

For instance, in 1954 the distinctive mascot, Gattu, was created by none other than RK Laxman and he became the keynote of Asian Paint's unassuming, relatable brand appeal with the image of a young dishevelled painter.

The image went on to be used in print advertisements and packaging till the 1970s and by 1990s was also seen in TV ads.

The message of “Any surface that needs painting needs Asian Paints” tied up with the image that was as iconic as the Amul girl.

According to a 2015 piece in Business Standard, after the introduction of Gattu in 1954, sales zoomed ten-fold at Asian Paints because he was more relatable than say rival Jenson & Nicholson's-  “When you think of colour, think of us” campaign.

Gattu appealed to the masses and helped Asian Paints become the leader, according to the Business Standard piece.

What the image did was to bring not the consumer but the painters who actually drive the painting industry to the forefront. But in the years to come, the consumer was wooed and also made to feel special with the  Ogilvy & Mather tag line, "Har Ghar Kuch Kehta Hai," conveying that every home's story through various key moments needed to be told through Asian Paints' colour palette.

The Business Standard piece also states, "This was the post-liberalisation era, a home became a living space, where the consumer wanted to express herself. Decorating one's home via painting was one of the ways. The tagline lifted paints into the lifestyle domain.”

Of course, the Mumbai-based company, adds the article, which began in a small garage in the forties also pushed the envelope in product development, marketing and distribution.

Not forgetting the importance of covering all bases, literally, in the 1990s, the company advertised their brand's dependability in protecting and beautifying the exterior of the Indian home in every weather.

Despite controversy plaguing its move to drop Gattu as its face in the 2000s, the future forward attitude of the company has held it in good stead.

According to Business Standard, “It was trying to shake off its mass-market tag for a more premium appeal in the 21st century."

To expand its appeal, says the article, since then, the company has rejigged its brand portfolio and kept the emphasis on a few strong brands, neatly clubbed under verticals like exterior (Apex Ultima), interior (Tractor Emulsion, Royale, Royale Play), solutions (Ezycolour) and waterproofing (SmartCare).

Asian Paints has even been organising workshops and creating in-depth research modules with design professionals to predict the colour trends every year.

The company has consistently offered new ideas to approach colour via concepts like  Colour World (Dealer Tinting Systems where consumers can pick colours from a shade card and the exact tint can be mixed right before their eyes), Home Solutions (A painting service that brings convenience right to your doorstep) , Kids World (Fun ideas for  children's rooms), and Royale Play- where special effects are created through various techniques with brushes, rollers, stencils and more.

The company has also consolidated its earlier home solutions offerings under its paint solutions brand, Ezycolour, to move into the services space. In keeping with the new cutting-edge brand image, the Asian Paint logo is also shorter and crisper today.

Collaborations with the likes of Nippon Paints Company Ltd Japan has also helped Asian Paints to keep refreshing its technical expertise in complex areas like the manufacturing of powder and coil coatings.

There were other significant collaborations too, as in the year 1993 when they set up a joint venture unit along with their overseas subsidiaries in Queensland Australia for manufacturing paints enamels and varnishes.

In 1995, the company set up another joint venture unit to manufacture paints enamels and varnishes in the Republic of Mauritius. And in 1996, the company and PPG Industries Inc. of the US set up a joint venture called Asian PPG Industries Pvt Ltd, to market as well as manufacture automotive paints and certain industrial products.

An ever-increasing footprint

 As we have already said before, Asian Paints Ltd is India's largest paint company and according to information in the public domain, the company has operations in over 22 countries with 27 paint manufacturing facilities servicing consumers in 65 countries through Berger International, SCIB Paints, Apco Coatings and Taubmans. The company has manufacturing plants in Maharashtra, Gujarat, Andhra Pradesh, Uttar Pradesh, Tamil Nadu and Haryana.

A crucial role in its success has been played by Asian Paints' balancing act between its wide range of paints for decorative purposes and for industrial use. They offer among other things, automotive paints, interior wall finishes, exterior wall finishes, enamels and wood finishes.

As early as in 1998, they introduced many new market winning products including a range of wood finishes, the super successful ACE Exterior Emulsion and the ever dependable painting staple, the Asian wall putty.

In 2000, they launched two variants in polyurethane (PU) wood finish under the brand name Opal. In 2001, the company introduced Utsav Enamel for the festival season. Duracast PebbleTex and CrossTex are part of the textured exterior paint range.

Here is a timeline according to Business Line, of the journey, Asian Paints has been on since 1945.

Asian Paints was incorporated in the year 1945.

In the year 1965, the name of the company was changed to Asian Paints (India) Pvt Ltd.

In 1973, the company was converted into a public limited company.

Soon after, Asian Paints went through an updation and modernisation of production facilities to keep up with the increased demand for its products.

In 1985, Asian Paints established a third paint unit. This was interestingly at Patancheru, a little-known area near Hyderabad which became the manufacturing hub for over 15000 MT of paints and enamels.

In 1987, the company initiated a plant for the manufacture of synthetic rubbers lattices with a capacity of 1200 tonnes per annum.

Among many of its joint ventures, were the 1990 joint venture companies called Asian Paints (South Pacific) Ltd in Fiji and Asian Paints (Tonga) Ltd.

In May 1991 the company acquired 1910000 equity shares of Pentasia Chemicals Ltd from Tamil Nadu Industrial Development Corporation (TIDCO) and thus PCL became a subsidiary of the company.

During 1992-93, informs Business Line, the company installed and commissioned a manufacturing facility for powder coatings with a capacity of 300 MT at the Kasna plant, near Greater Noida.

In 1999, informs Business Line, the company acquired 76 percent of the equity stake in Sri Lanka-based Delmege Forsyth & Co (Paints) Ltd. They opened a manufacturing plant in Oman in partnership with a local company. They also acquired the entire paints business of Pacific Paints Company based in Australia.

In 2002, the company revamped their international operations and among other key steps, also acquired a controlling stake of 50.1 percent in Berger International Singapore.

Over the years, new technology and brand licensing agreements and tie-ups with international partners, acquisitions, expansion via new paint plants and manufacturing facilities, new distribution centres, new product launches have kept Asian Paints ahead of its competitors.

It also entered the home improvement and design space in India with the acquisition of Sleek International Private Limited, a kitchen solutions provider, and also has acquired the brand network and sales Infrastructure of Ess Ess Bathroom products Pvt Ltd and will now be a key player in the bath fittings business.

In 2015 Business Standard piece, B Ramanathan, managing partner, Ogilvy & Mather, the agency that has been associated with the company for the last 30 years said, "In the last three to four decades, the company has transited from being a paint-can company to a solutions provider, moving to surfaces beyond walls, with metal and wood finishes."

The ever-evolving success mantra

A Moneycontrol interview with author Saurabh Mukherjea delves deep into his book, 'Unusual Billionaires’ where he decodes successful businesses using economist John Kay's famous framework of innovation, reputation, architecture & strategic assets.

One of the companies that Mukherjea discusses is Asian Paints and he says, “To explain what lies behind the seven decades of continued excellence at Asian Paints, there is a chart in the book, that shows it is not just Asian Paints’ revenue growth, but also improving return on capital employed (ROCE) for nearly four decades and improving profit margins for nearly three decades. I know there is no other company in India that has pulled it off. I doubt, if I even did a global search, I would find any other company like this."

"The ability of the three families to work cohesively, emphasises the family’s focus on the company itself. What they have done very well is to stay focused on one industry- on paints. Even as India changes, their focus on paints has been broadly unwavering. There are a few other lines that they have begun, but the core focus of the business has been paints and as a result, they have pulled away from the rest of the paints industry in a way that I do not think I have seen in any other industry in India. The market leader, nearly 50 percent market share, multi-decadal dominance, it is very rare to see in any country in any industry," he added.

In a 2016 Business World interview, one of Asian Paints' most important strategists, Kanwar Bir Singh or KBS Anand, also chief executive officer and managing director recalled the journey of how over the four decades since he joined the company after leaving IIT-Mumbai in 1979, the company has grown to have around $ 2 billion in top line and profits higher than the combined numbers of its next three immediate rivals, including world No 1 AkzoNobel, Berger Paints and Kansai Nerolac.

KBS is credited with the brand's strategy to look beyond paints and make Asian Paints a holistic home decor solutions company that today also offers kitchen and bathroom solutions, wallpaper and colour consultancy.

One of the major reasons behind Asian Paints' success is its ability to connect with its dealers, consumers across various economic demographics and also its understanding that every colour template must evolve to keep up with the future.

In order to achieve that, says the Business World piece, the company has created a seven-member Technology Council to brainstorm on the company’s technology needs and zoom in on business opportunities based on technological prowess. This approach- along with customer feedback garnered through multiple ways inspires the company to launch new products and also strengthen its front-end in a big way.

"Asian Paints does not have distributors - it supplies its paints directly to 45,000 retail shops across India through 125 depots. In a brilliant move, it has now tied up with retailers to tailor its service according to customer needs. So, in the past three years, it has added 250 “Colour Ideas” stores to take this format’s count up to 300. A colour consultant from Asian Paints sits in these stores, and gives advice to consumers on paint solutions for their homes," wrote the Business World.

Setting trends

 In a 2016 Forbes India piece, KBS, however, made a startling admission when he said, "The biggest eye-opener was that no one is interested in paint.”

This conclusion was drawn in 2000 after a year-long customer engagement exercise by Asian Paints.

According to Forbes, this was the longest-ever customer engagement the company had done with over 850 interviews and group discussions.

"What was found is that paint as a product was very low on people’s minds, only coming to the surface every three to four years when it was time for home improvement. Second, it was the woman of the house who was the actual customer. And there was a third, rather self-affirming realisation: The only brand customers know and recall is Asian Paints," wrote Forbes.

The last revelation, of course, strengthened the company's resolve to continue to reinforce brand recall with steps like recruiting professionals like KBS from the Indian Institutes of Management or installing the first mainframe computer or doing demand forecasting.

The findings, says KBS laid the blocks for almost all the new initiatives the company made over the next decade and a half including introducing the Royale brand and an array of textures, which went down well with the users.

"Asian Paints also started marketing paints in small packs. Priced at Rs 80-90, these gave customers a chance to paint a small part of the wall in their houses and then come back for larger packs to complete the job. This success, in turn, led the top management at Asian Paints to conclude that the customer wanted choices and was hungry for more information. Enter the Colour with Asian Paints store,” wrote Forbes.

In 2007, says Forbes, in Mumbai’s tony suburb of Bandra, Asian Paints launched a paint store unlike any seen before.

"Spread over 5,000 square feet, its aim was to provide customers with advice on painting and decorating their homes. Customers would come in and spend time with a ‘colour consultant’ who would work with them on various paint types, different shades and textures. Advice on accessories like wallpaper and stencils was also given. Most importantly, there was no expectation to buy. It was an exercise in customer engagement. Women and children loved the place and the feedback was overwhelmingly positive," wrote Forbes

This was the first time the company was interacting with the customer directly, says KBS in the Forbes piece and this then led to a text messaging service through which customers were sent a booklet on paints yielded a stunning 300,000 queries in the first year.

The queries doubled in the second year. While these stores created an incredible brand connect, the cost of operations was prohibitive and the company had to restrict the stores to Mumbai, New Delhi and Kolkata. But this initiative shows the foresight the company has shown to keep up with its customers.

It also set up much smaller versions of these stores within dealer shops across the country. The company now also offers colour consultancies at home, informs Forbes.

The use of IT for predictive demand analysis and automation of factories has also kept the company ahead of its competitors.

Asian Paints also set up a large-format, dealer owned store in Coimbatore where customers can buy lighting from Philips, furniture from Pepperfry, D’Decor furnishings, sanitary ware by Hindware and Somany Ceramics’ tiles in addition to kitchen and bath fittings.

The aim is to have a one-stop shop for home needs, says Forbes. Customers can also get a 3D rendering of what their house will look like, a feature that has proved to be a success.

On the anvil now are augmented manufacturing and production facilities, modernisation of older plants and constant evaluation of strengths and weaknesses and course correction when needed.

In Asian Paint's story, every tint and brush stroke speaks of the tireless commitment to the big picture which just keeps on growing bigger with time. In this case, success truly comes in many colours and strength also comes in the unity of the three families, at the helm of affairs. This many have attributed is the backbone of the Asian Paints success story.