Rohan Gupta Introduction The South-East Asian paints and coatings market was on the steady incline until the late 90s, when the Asian financial crisis hit it square in the face. Down, but not out, the economies revived themselves only to suffer from a variety of issues over the past decade: whether it be the 2001 terror attacks, H1N1, poor market confidence or the recent global recession. Although constantly recovering, these factors have affected the paints and coatings market in the region to varying degrees owing to the fluctuation ofraw materials prices and low demand from downstream markets. On a side note, after the bubble crash of 2008, the global paints and coatings market shrank by 5.8% in 2009 to reach a value of $91.7 billion. But due to the heavy growth prosp ect, by 2014 it·s estimated to grow over 15.4% to reach a value of 105.8 billion 1 . Ofwhich, APAC is estimated to account for $48bn with a market size of 15mn tonnes 2 . Asian Paints is India·s largest paint company and Asia·s third largest paint company, with a turnover of Rs 77.06 bn 3 . The idea now is to formulate a strategy that would make them largest in Asia and amongst the top 5 in the world with focus on the ASEAN region. Factors affecting Asian Paints Ltd. (APL)1. Raw material prices, including crude oil and an array of chemicals 2. Competitor penetration, weather, agricultural production, economic &market growth Growth drivers affecting target market (ASEAN) 1. Rising personal incomes 2. Rapid urbanizati on 3. More and more nuclear families 4. Increasi ng media exposure Keyattributes for ASEAN market i. Maintain a comprehensive product portfolio across price points e.g.: Emulsions (both exterior and interior), Enamels, Wood finishes and Distempers ii. Use its strong distribution reach as a powerful competitive advantage. Firms need direct supply chain engagement. APL·s strong relations act as an entry barrier for existing players as well as those looking to increase penetration. iii. APL is in a position to influence pricing. It should maintain its status as pricingleader in decorative paintswhere pricing power is superior as opposed to industrialpaintswhere buyers have high bargaining power. This will offset factors such as economic deceleration, uncertainty in disposable income growth and cost hikes. iv.APL should innovate product offerings and marketing strategies, offering a highly customized portfolio tailor made for the market in question 1 http://www.reuters.com/article/2011/02/01/idUS34126+01-Feb-2011+BW20110201 2 http://www.frost.com/prod/servlet/frost-home.pag 3 http://www.asianpaints.com/corporate_information/company.aspx
