The paint industry is currently going through a challenging battle of consolidation. Due to this process, small and emerging players are either merging with big players or leaving the industry. The market is mainly in the hands of only a few big players making it oligopolistic. There are also a lot of new entrants. But only those established in other fields can compete here. Let’s find out a little more about AkzoNobel’s upcoming plans to sail their boat in this challenging time.
How Will AkzoNobel Navigate Expansion In India’s Competitive Decorative Paint Market?
AkzoNobel is a leading brand in India. People also know it by its brand name Dulux Paints. In a competitive market, the company has worked on its brand building and positioning over time. Thus, it today occupies the fourth position in the Indian industry after Asian Paints, Berger Paints and Kansai Nerolac. Dulux’s parent company Akzo Nobel N.V. is now working to expand its core coatings business in India. The company will first conduct a strategic review to examine the capital requirements. Later, it will invest the amount for the expansion of its Indian subsidiary.
However, AkzoNobel is currently concentrating on the market of decorative paints. This area is already expanding with a lot of competitors. At the same time, customer demand is also being restrained. Thus, rising manufacturing costs can become a challenge for companies. Due to this ongoing war in Middle Eastern countries, the price of crude oil is expected to be higher. This will affect many smaller players by increasing the production costs of the paint industry’s raw materials. Pidilite and Birla Group’s Birla Opus and other companies have also entered the decorative paint sector.
Akzo Nobel will also expand itself in the decorative paint industry. However, It would be comparatively more feasible for them to compete with its existing brand value in this industry compared to new players. Dulux is already ranked fourth in the Indian paint industry. Under the condition of integration and consolidation, a lot of smaller players would prefer to join AkzoNobel to take advantage of the company’s position. Let’s have a look at the impact of this consolidation situation below.
Analyst Abneesh Roy says the industry is moving towards consolidation sooner than expected. This is making the small players in the market extinct. If someone wants to enter the decorative paint industry today, they need a strong mindset to stay in business. Those who choose it without determination will not be able to compete for a long time. At this time, the big players are dominating the industry.