Asian Paints: How Does It Manage To Stay On The Top?
Business
With a market capitalization of ~₹ 3 trillion, Asian paints has grown by a CAGR of 20% since past 60 years. Widely cited as India's best paint company, let’s have a look at how the company has stayed at the top of the game!
Crux of the Matter
Introduction
Founded by Champaklal Choksey in 1942, Asian Paints is globally the only company to give a CAGR OF 20% since past 60 years.
It is Asia’s 3rd largest and world’s 9th largest paints company. But how did it manage to achieve consistent results?
The Success Ingredient
Answer: Its supply chain structure.
Choksey removed distributors as they were eating up ~20% of company margins. However, the dealers were not well equipped to store huge bulks of inventory.
The Genius Move
Choksey ensured that Asian Paints’ truck would come every 3 hours to replenish the stock, i.e., 4 times a day and 28 times a week. Today, it has 70,000 dealers across India, and delivers between 2.5 lakh - 3 lakh times daily.
In comparision Berger Paints delivers 40,000 times/day while Akzo Nobel 10,000 times/day.
Who Gets How Much MRP?
Accurate Presdiction Behind Successful Supply Chain?
Choksey back in 1970 purchased India’s first supercomputer for ₹8 cr, decades before ISRO, IITs, or any corporate. What has the computer done for them?
For 50 years, Asian Paints have recorded data points for which paint colors are sold, in what quantity, in what tin sizes - for every neighborhood in India at every hour of the day. It heavily leverages this data mammoth to forecast demand.
Next Level Prediction!
Asian Paints can predict which paint will be sold at a store at a time of a day with 98% accuracy! Moreover, the precision is ever-improving as it collects ~3 lakh data points daily. Thus, it is almost impossible to compete and beat Asian Paints in their sector.
Curiopedia
Mysore Paints and Varnish Ltd. is the only company in India authorised to make indelible ink used in elections. Owned and operated by the Government of Karnataka, it was started by Maharaja Krishnaraja Wadiyar IV, Maharaja of Mysore, in 1937.