Indian Decorative Paints Industry – A background

Indian Decorative Paints Industry – A background

0
0

The size of Indian paints industry is estimated to be Rs 55,000 and is estimated to reach 70,000 crore by 2021-22. Decorative paints constitute dominating share of the industry accounting for 74% while industrial paints constitute 26% share, with others making negligible contribution.

Decorative Paints include higher end acrylic exterior and interior emulsions, medium range exterior and interior paints, low end distempers, wall putty, wood coatings, cement paints, primers, thinners and putties. Decorative Paint market is growing much faster than that of Industrial paint. Decorative paint can be either water based (or emulsions) or solvent based. Water based paints are environment friendly and are increasingly preferred by customers because of better aesthetics and durability. Decorative paints include Enamel, Exterior Emulsion, Interior Emulsion, Putty, Distemper, Primer and Thinner, Wood Coatings and Cement Paint. In terms of value, emulsion (Interior and Exterior) contribute to the highest category share in decorative paints while putty accounts for largest share in terms of volume.

Some facts about the industry:

  • Paints industry is virtually controlled by four major players. Of them, one controls half the market
  • Demand is seasonal and shoots up during festive seasons like Diwali and drops during rainy season
  • The product differentiation is minimal in the industry and close substitutes are readily available for any product in the market
  • There are about 2,000 small-sized manufacturers in the unorganised sector who do not pay any indirect taxes. They manage to get undue advantage in the market. However, with the introduction of GST situation is expected to improve

Traditionally, oil-based paints are preferred product in Indian market mainly due to their price advantage. However, in recent years, there has been a steady shift towards use of water-based paints from oil-based paints. Shift is taking place due to increasing environment awareness among consumers and also due to the ease of application as well. Consumers have started preferring water-based paints as they dry quickly, emit less odour and are easier to clean (with water). Solvent-based paints, on the other hand, contain high levels of volatile organic compound (VOC), take longer to dry and emit strong odour. This has led to strong consumer inclination towards water-based paints/emulsions as evident from their increased contribution to overall paint demand. For the paint manufacturers, water-based paints fetch 5-7% higher margin than oil-based paints. This is the reason for higher focus on water-based paints by paint companies. Presently, the share of water-based paints in the decorative paints market is 52%, while solvent-based paints account for the balance 48%.

Subscribe to Sawdust

Select your preferences
//s3.amazonaws.com/downloads.mailchimp.com/js/mc-validate.js

Leave a Reply