New entrants add a splash of colour to India's paints market in 2024

The Indian paints industry, known for its resilience and steady growth, witnessed a transformative year in 2024. With new players entering the market and established brands stepping up their game, the sector is poised for exciting times ahead.

The Indian paint market, currently valued at approximately Rs 7,981 crore, is projected to surge to Rs 12,542 crore by 2029, according to Mordor intelligence. Urbanisation, rising disposable incomes, and increasing construction activity fuel this growth. After recovering from the disruptions caused by the COVID-19 pandemic, the industry is seeing a renewed demand for paints, especially from the real estate and infrastructure sectors.

The last significant disruption in this market occurred in 2022 when JK Cement officially entered the paints sector by acquiring a 60% controlling stake in Acro Paints in December of that year. This acquisition was valued at Rs 153 crore.

The Birla Opus effect

Experts believe that Birla Opus, a decorative paint brand under Grasim Industries of Aditya Birla Group, launched in February 2024, will emerge as a significant player in the industry. A substantial investment of Rs 10,000 crore supports its strategic entry into the Indian paints market.

During the launch of the brand, Kumar Mangalam Birla, Chairman of the Aditya Birla Group, expressed confidence that Birla Opus would become a strong number two player in the market within five years. As of December 2024, the brand has successfully captured a 2-3% market share despite being a new entrant. 

The brand also launched a large-scale advertising campaign during the IPL this year, reflecting their bullish approach to the market. This launch certainly affected the leading players in the category.

"We have lost about 1.5% of our growth compared to the 2.5-3% loss I had estimated. Although competition has increased, we believe the impact isn't severe enough to be disruptive for the industry. This healthy competition will keep us on our toes and help us improve.

Abhijit Roy, CEO of Berger Paints during an investor call earlier this year

On the other hand, Asian Paints reported a 5.3% dip in Q2 revenues, falling to Rs 8,028 crore from Rs 8,479 crore for the same period last year.

Also Read: Can Birla Opus grab a big chunk of the Asian Paints-dominated market?

2024: The year of new players entering the market

The entry of new players who challenge the dominance of established companies is driving growth in the market. The influx of other newcomers, such as Astral Paints and Haisha Paints, in 2024 signifies a vibrant and competitive marketplace.

These newcomers are directly challenging established players such as Asian Paints, Nippon, Berger Paints, and Nerolac, who have dominated the market for decades. The new entrants, with their substantial investments and innovative approaches, have the potential to reshape the industry's dynamics in the coming years.

For many of these companies, entering the paint category was a strategic decision. For instance, Astral Industries acquired a majority stake in Gem Paints in 2022 for Rs 1.94 billion and subsequently launched Astral Paints in May 2024. Given their deep understanding of the building materials industry, this move was a natural extension.

Similarly, Pidilite Industries launched Haisha Paints in March 2024. The brand leverages Pidilite's strong market presence and reputation, built through well-known products such as Fevicol and Dr. Fixit. This launch is part of Pidilite's strategy to address key gaps in the market and cater to various consumer needs.

Also Read: How Asian Paints' clever content play gives it an edge in a competitive market

How established players are navigating competition

Established players are launching new product ranges and increasing their advertising efforts to counter the intensified competition and defend their market share.

Asian Paints and Berger Paints responded to Birla Opus's competitive threat by raising their portfolio prices by 0.7% to 1%. This move aims to maintain profitability amid rising competition and potential market share erosion. Asian Paints also revived its iconic 2002 tagline and ad Har Ghar Kuch Kehta Hai to rekindle the brand's love among consumers.  

Reports indicate that established players are also expanding their production capacities and investing in new technologies to improve efficiency.