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Informist, Monday, Aug 12, 2024

 

--Berger Paints MD: Plan to soon roll out new strategy for urban mkts 

--Berger Paints MD: Aim 14% mkt shr in cities vs 11% now in 3 yrs

--Berger Paints MD: Building new team to focus only on cities 

--Berger Paints MD: Plan to add 8,000 dealers in FY25

--Berger Paints: New dealer additions to take total dealers to 56,000

 

By Avishek Rakshit

 

KOLKATA - With the paints industry in India becoming more vibrant due to the entry of new players, Berger Paints India Ltd is set to roll out a specific strategy targeted at cities to raise its market share and increase revenue from pricier products, Managing Director and Chief Executive Officer Abhijit Roy told Informist.

 

"We are building a new team which will focus solely on the metro and cities to increase our reach and market share. We have been strong in semi-urban and rural markets, but in cities we are weaker, which we need to address now," Roy said. He, however, did not detail the revenue Berger Paints earns from urban centres as a percentage of its consolidated revenue.

 

The strategy involves roping in a few new dealers who can ensure high sales volumes, introduction of new premium and luxury products suited for cities, a different approach towards painting, and targeted digital advertising. "People in cities and metros mostly live in flats; so, the pattern of painting is different than the rural or semi-urban areas. We are working on this approach and will roll out in the coming months," Roy said.  

 

Berger Paints is the market leader in Kolkata with a market share of around 37%. In the Delhi region, it is the second largest with a market share of 30%. However, in cities such as Mumbai, Pune, Bengaluru, Chennai, Hyderabad, and others, its market share is 10.5% to 11%. "The target is to first capture a market share of at least 14% in the next 2-3 years, and then take it higher to 18% in the next 5-6 years," Roy said.

 

"The total addressable market in the metros and cities, excluding Delhi and Kolkata, is 150 bln rupees per year." Overall, Berger Paints has a market share of 20.9% in the 700-bln-rupee paints market in the country, making it the second-largest paints company after Asian Paints Ltd.

 

Roy explained that Berger Paints, a 100-year-old company, was historically strong in the east and north India where the primary cities were located. "But then more metros and cities started coming up in the south and west (India) after Independence, where we were weaker. We kept focussing on the core regions in north and east, and as a result lost the opportunity in south and west which we are now addressing."

 

Berger Paints' decision to rework its strategy for urban markets comes in the wake of Aditya Birla group-owned Birla Opus, the latest entrant in the paints industry, aggressively increasing its distribution base to 300 towns within six months of its launch, and building a large team internally. Investors are bullish on Birla Opus, and some sector analysts believe it can unsettle the usual market share dynamics of the top paint companies. Apart from Asian Paints and Berger Paints, Akzo Nobel India, Kansai Nerolac, JSW Paints, and Indigo Paints are the other large players in India. 

 

Roy said the company has started developing city-specific products, mainly luxury emulsions, which it will introduce in the coming months. A premium product range is also under development, targeted at customers in the cities.

 

"I cannot give details about the upcoming products due to the intense competition, but can say that we have a line-up of premium and luxury products for the urban centres which we will launch this financial year," Roy said, adding it will help increase both the revenue as well as profitability of the company. Berger Paints recently launched Easy Clean Silky Touch paint at a premium price after fortifying the Silk brand of luxury paints. It is also scaling up its sales outlets by 8,000 this financial year to reach a total of 56,000 sales points across the country.

 

"We are also scaling up Paint Studio, which is our exclusive outlet, and plan to have more than a thousand of them by the end of this financial year from the current count of 616," Roy said.

 

During Apr-Jun, Berger Paints registered an 11.8% volume growth in India, but this did not reflect adequately on the topline that grew by only 2.4% due to muted market conditions in West Bengal and Kerala, which are the company's major luxury paints markets. The net profit was flat. Shares of Berger Paints were down 0.5% at 529 rupees on the National Stock Exchange at 1253 IST.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Vandana Hingorani

 

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