Moat Attack🥊 on Asian Paints! Grasim Industries will challenge the pain industry or not?

The paints industry in India has primarily been dominated by the likes of Asian Paints, Berger Paints, Nerolac and few more organised and unorganised players. Collectively they own assets worth 11k crore while as the latest entrant in the market has announced a Capex of 5k crore. They clearly have deep pockets and an enviable distribution network. Will they manage to eat away the precious market share accumulated by the greats over the years?

Let us know in the comments below!

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[nonexistent]

When someone buys a dream house they paint it with Asian paints.

[anjalg]

Just doing capex and saying we distribute putty & cement, so can sell paint - is probably not enough to challenge the paint industry.

[shail]

Asian Paints has a moat in terms of Supply Chain & is considered as Technologically advanced in Predictive Analytics. Is any existing or new player can challenge it, less likely.
Only point which is against Asian Paints at least in mid term is very high valuation, margin of safety is not there. So any subtle impact of Sales or Margin may give setback to its Market Price.

[arpanshome]

So many paints companies are there. Does not matter. They have 50 years of user data and technology with them. That's the moat in Asian paint. Not only distributors.

[rajeshkaul]

Not only Grasim industries but also Astral (recently bought equity in Gems paint) both are in a position to challenge Asian paints.

[revantharyan]

I dont think they can cause asian paints has superior distribution and also companies like sherwin Williams failed to beat asian paints I guess in 2005 and their balance sheet was better so let's see

[chandanpandey]

Everyone is saying that Asian Paint's or Berger Paint moat is distribution. However, I think their moat is their brand. When anyone thinks of Paint, they think of Asian and Berger paints (Pidilite's Fevicol is a similar example). Also, building trust is much harder and takes a long time to do. For Indians, buying paint is not a cheap thing to do and won't take risk buying something else. Grasim will have to spend a lot in branding. Moreover, just making paint is not going to help any company to survive. There are technicalities involved in keeping good margin even when the raw material price is high. Plus, as someone else here has commented about predictive analysis. That's very important in keeping customers with the brand. The new companies don't have it and that will take a lot of time.
The only thing is, India's paint industry is large and is growing in double digits. So Grasim can taste the pie but cannot hurt these companies significantly.

[MUKESHSINGH-ller]

I think it won't be able to, because Asian paints is transforming itself and building an another layer of comptitive advantage around itself.🏵️

[praveenyada]

the moat of asian paints is the strong distribution which is shared also by grasim, there will a attack on moat, i think asian paints will block the attack well

[pankaj]

To beat Brand name "Asian paints" is hard.

[umeshgharat]

Those who understand paint technicals or effectiveness w.r.t price quite well only would take a risk to switch to other paint than Asian Paints. In general, it's quite difficult for other paint companies or especially new entrants to enter the minds & intellects of common man.

It's not product where new company can show highly significant impact which existing brands like Asian Paints or Berger Paints can't make.

[songoku-jxcb]

They can but it will be really hard because paints industry has multiple entry barriers
1) setting up of tinting machines
2) distribution network
3) predictive analysis (asian paints)
4) differentiated products (indigo paints)
Also its a very structural industry with no price wars so it might hurt grasim in long run if they try to keep prices high
Lets see though how they counter these challenges

[chinmayshah]

There is enough room for new entrants as market is expanding, so can accommodate grasim & astral. Difficult for small paint companies which would be Take Over Targets

[rahul_bob]

It's really hard to beat Asian paint!!!!

[samadis]

Asian Paint is world 2 number company no one can beat in this difficult time

[SK-wpms]

I'll prefer either asian or Berger to paint my home.. Grasim yet to prove its quality..Trust of quality is important... otherwise shalimar paints jaise kahani ho jayegi

[mehulsuri]

Now even Astral is getting into the industry. Will it get too crowded and lead to margin declines?

[SurajPatel-wjjp]

Now pidilite the most trusted brand of fevicol is also entered in paint industry
Astral, grasim, jsw, pidilite these companies are enough to beat Asian paints

Har kutte ka din aata hai
Asian paints ka ab bachna mushkil hai

[unnikrishnanvannadil]

Asian paints has monopoly in rural and urban India for paints. Penetrating the rural market is a great challenge. Their factory to shop distribution model is one of the most optimised in the world. They've perfected it. Grasim has a mammoth competition ahead but in this world we've seen standards lifted and unconquerable challenges conquered. Let's wait and watch.

[harshitgarg]

definitely concerning but in my limited knowledge deep pockets can't destroy moats easily.