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Hey there,

In 1942, Four friends started a small paint business in Mumbai.

Today, it's India's largest & world's 10th largest paint company, doing ₹30,000 cr in annual revenue.

Here's how Asian Paints DOMINATED the whole industry🧵

First here is some quick context: The company was started by Champaklal Choksey, Chimanlal Choksi, Suryakant Dani, and Arvind Vakil in a small backyard in Mumbai.

Asian Paints was incorporated as Asian Paints (India) Pvt. Ltd in 1965 and later became a public company in 1973.

Now, let’s talk numbers:

⚫ Over 40% share of the Indian market
⚫ Around Rs. 30,000 crore in revenue
⚫ Employs over 32,000 people
⚫ 150K retail touchpoints

That’s Asian Paints for you.

For over 50 years now, Asian Paints has been the undisputed market leader, with an almost monopolistic position in the industry. The secret to Asian Paints' sustained success lies in its unconventional approach in a conventional industry.

And, here are some of them:

1/ Removing all distributors.

Asian Paints took the risky decision to remove all distributors - uncommon in an industry centered around wholesale distribution. Typically, the production flow was:

The paint was created by big manufacturers → sent to distributors → dealers → customers.

Earlier, wholesalers/distributors ate into ~20% margins. And, by removing distributors and selling directly, Asian Paints maximized immense growth.

2/ Investing heavily in technology

In 1970, Asian Paints bought an Rs. 8 crore computer to collect nationwide data on paint quantities, colors, and sizes purchased. That amount equals almost 400 crores today - very expensive!

With AI and ML, demand forecasting improved dramatically. Now, the company delivers paint to 70,000+ registered dealers 3-4 times daily! Incredibly, 90% of rush-delivered stock sells within 3 hours.

3/ Executing its tech vision (way) early

Most Indians were unfamiliar with computers then. But the company improved services through technology:

⚫ Digitized inventory/billing management
⚫ Computerized color matching in the mid-1970s
⚫ Trained staff on personal computers in the 1980s
⚫ Customer care helpline in the 1990s

These examples showcase how Asian Paints adapted over time rather than sticking to legacy processes. This willingness to embrace change - be it eliminating distributors or adopting computers - is why Asian Paints continues leading the market today.

The key takeaway from Asian Paints' journey is that startups must continuously adapt and improve to stay ahead of the competition. Businesses that resist change will eventually fade away.

✍️ Jargon of the day

Inventory/Billing Management: This refers to the systems and processes for tracking stock levels, managing orders and shipments, generating invoices, etc. Asian Paints digitized these systems early on to improve efficiency.

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Cheers,
Karthik