AkzoNobel to focus on mass brands, new niches to push growth2 min read . Updated: 19 Jan 2018, 11:55 AM IST
In a bid to close the wide gap with Asian Paints, AkzoNobel is extending its premium brand Dulux to introduce mass paints under the Dulux Promise brand
Mumbai: Dutch paints and chemicals firm AkzoNobel India Ltd will focus its energies on the mass paints segment and new niches to help accelerate its growth in India, two top company executives said.
In a bid to close the wide gap between itself and Asian Paints Ltd, the country’s largest paints and coatings company by far, AkzoNobel is extending its premium brand Dulux to introduce mass paints under the Dulux Promise brand. This will now be a key focus for the company to help it build a presence outside India’s top metros and bring in new consumers.
“We find as a strategy that increasingly the fastest growing segment is the mass segment," David Teng, director – decorative paints, India and South Asia, said in an interview. “That means going out from the top 15-20 cities to secondary and tertiary markets. This is something we’re working on. This is our fastest growing segment too."
“This is the sector we’re going to focus on, easily the most competitive right now," Jeremy Rowe, managing director of decorative paints, Southeast & South Asia, Middle East, said in an interview. “Apart from the big 4, there are also a bunch of smaller, local players in the mass market."
AkzoNobel is also extending the brand to new categories, including waterproofing, and will look to make new “specialty" offerings.
“We can leverage global technology to launch into specialist niches," Rowe said. “We entered waterproofing last year. You will see Dulux in a lot more categories than we were in the last 3-4 years."
AkzoNobel has been in India since the 1950s, but has remained a distant player in the paints market after much larger leader, homegrown Asian Paints. While Asian Paints closed FY16-17 with over Rs34,000 crore in revenue, AkzoNobel India made just over Rs3,100 crore in the same time period, as per data from the BSE. Asian Paints also sells paints across the value chain from luxury emulsions to distempers.
“In a scenario where aggressive multinational managements are garnering market share from the top 2 players in the Indian paints sector, lack of ‘required’ focus from Akzo is leading to the company continuing to lose out to competition," equities brokerage firm Spark Capital said in a note on the firm dated 7 November 2017. “We believe with uncertainty at parent level (Akzo Nobel NV merger/takeover talks), lack of heightened focus alongside GST disruption coupled with aggressive competition in marketplace has led to the current underperformance of the company."
Asian Paints and Berger Paints lead India’s paints market.