How did Asian Paints become a monopoly in the paint market?
Asian Paints is the only Indian company that has grown at a 20% CAGR for the last 60 years.
1 lakh rupees invested in Asian Paints in 2000 would have become at least 1.87 cr as of today and that too without any dividends.
The business of Asian Paints doubles every 3 years and it has been a market leader not for 5 years, not for 10 years but for the last 54 years.
Seems unbelievable, isn’t it?
But the question is how did Asian Paints become such a dominating force in the Indian Market?
What is the magic secret behind their success?
During World War 2, the government temporarily banned the import of paint in India and there were few foreign players in the Indian market.
This ban resulted in a brilliant opportunity for domestic paint production.
Noticing this opportunity Mr Champaklal Chauksey and 3 of his friends started Asian Paints in 1942.
Mr Chauksey was a genius market researcher, he understood there were 2 industries he can serve, first the industrial (which was a B2B marketplace) and second, the decorative (which was a B2C marketplace).
When he got several rejections from the Industrial industry, he targeted the decorative space by supplying paint to small village distributors.
People liked the product and the demand soon shot up which resulted in bigger distributors approaching Asian Paints.
But this was not it, fast forward 10 years Mr Chauksey found another gap in the paint market.
There were 2 major products that were being sold.
One was a basic dried distemper that was extremely cheap, but it had a tendency to peel off and used to smell very bad.
The second product was the plastic emulsion product which was free from all of the above problems but was five times costlier and it was unaffordable to the common man.
So Asian Paints came up with a game-changing product called the washable distemper which was placed exactly between the dried distemper and plastic emulsion.
This was a revolutionary product because it had the qualities of plastic emulsion, but was way cheaper than the emulsion product.
On top of that, this product was marketed using a very successful jingle which said, "Don't lose your temper, use tractor distemper."
And within no time, the washable distemper was a major hit in the market.
Since then, Asian Paints has managed its supply chain superbly, a good relationship with paint dealers and a legendary culture that didn’t let any company compete with Asian Paints.
Which paint do you use in your house? Is it Asian Paints or some other?
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