Indian paint sector is the second-largest market in the APAC region. The paint industry in India is century old. The Industry is poised to grow at 8.6% CAGR for the next five years. The market size of this sector stands at USD 6.7 billion, where the decorative paint category constitutes around 75% of the market, and the industrial paint category constitutes the remaining 25%. The decorative paint category has grown at 11.4% CAGR, whereas the industrial paint category has grown at 7.9% CAGR.
The decorative category includes
- exterior wall paints,
- interior wall paints,
- enamels, primers,
- wood finishes, etc.
The industrial paint category includes
- general industrial,
- glass coating,
- automotive coatings,
- protective coating,
- packaging coatings, etc.
The organized sector controls around 70% market, and the unorganized market controls the remaining 30% market. The per capita consumption of the paint in India was at 4.1kg in 2019 against 13-15kg of the global consumption. There is a huge opportunity for the firms to grow to fill in this gap of demand and consumption.
Major paint companies are making steady inroads in waterproofing and the construction chemicals sector. The waterproofing market stands at USD 0.7 billion and is expected to grow steadily for the next fifteen years. Other sectors where paint companies are eyeing are adhesives, paint services, and sealants.
Growth Factors:
- Increase in disposable income
- The burgeoning of the middle class and nuclear families
- A short cycle of painting
- Increasing rural market and small towns
- Festive seasons
- Rapid urbanization
- Monsoon season
- The demand of premium products
- Innovations in industry
- Government’s push for affordable housing
- Pradhan Mantri Awas Yojana- housing for all in the urban regions
- Smart City Mission- to cater to larger middle-income population and lower-income population
- Tax benefits for investing in the housing sector by increasing the limit of tax deduction in the interest component of house loans.
All the above factors and the large consumer base ensures that the Paints industry expands at a healthy pace. There is a massive opportunity for the firms to grow to fill the gap of demand and consumption.
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Author- Ade Gokul, Assistant Manager-Business Development and Research at Route2Market®
References:
- Jaganmohan, M. (2021, February 2). India: paints industry market share by company 2020. Statista. https://www.statista.com/statistics/914573/india-paints-industry-market-share-by-company/.
- https://images.assettype.com/bloombergquint/2020-09/162fc669-fb6f-4001-ae74-26c54252da3d/Nirmal_Bang_Paint_Sector_Update_010920.pdf
- Paints – April 05, 2021. Equitymaster. (n.d.). https://www.equitymaster.com/research-it/sector-info/paint/Paints-Sector-Analysis-Report.asp.
