With sales not picking up on expected lines, paint manufacturers are becoming aggressive to push up their sales. As the initial pent up demand has dried out and with no major new projects coming up nor are the individual home owners taking up repainting works in a hurry, decorative paint manufacturers have to now fight it out for every drop paint being sold.
For example, Asian Paints, the largest decorative paint manufacturer in the country, taken aggressive stance by offering in-built discounts for fast-moving SKUs whereas its competitors who generally resort to scheme-based discounts to order ensure healthy volume offtake for themselves. Asian Paints had too take aggressive stance as it saw lukewarm response from dealers for scheme-based discounts as they were already sitting on high inventory and the consumer demand outlook was weak. It should be noted that in-built discounts are offered on a real-time basis, and given to dealers upfront. They are not linked to offtake from the company. On the other hand, scheme discounts depend on the quantity / quality of goods purchased from the company and is not given to dealers upfront. They are paid after a certain period.
To win over the dealers, the market leader has also taken the lead in sanitizing paint shops. It’s estimated that sanitisation of paint shop costs more than Rs 2,000 and this act of Asian Paints has helped it to generate goodwill among the dealers community.
Further, the company is also supporting influencers like dealers, contractors and painters by giving high cash rewards, as themselves are facing liquidity challenges. Earlier, it used to sponsor relatively lower-cost foreign trips or used to present them with home appliances.
With the market leader taking such an aggressive stance, others too may be forced to follow the leader.