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Asian Paints’ Business Model
05-30-2021, 05:41 PM
Post: #1
Asian Paints’ Business Model
Asian Paints’ Business Model

Asian Paints was founded in 1942 as a decorative coatings business. The company is India’s leading paint company and a top-five global decorative coating business. The business model is to supply paint directly to close to 75,000 mom and pop hardware stores in India. The reason the company sells to mom and pop stores is because in India there are not big box stores that sell hardware; instead, everything is sold through these roadside mom and pop stores. Asian Paints has 8 factories and 143 company warehouses, which directly ship paint to hardware stores.

Mr. Lade pointed out that Asian paints needs a strong demand and Sales & Operations Planning (S&OP) process because they are not operating through a large distributor. When working directly with dealers, they need a sense of the demand, and use a collaborative approach between the sales and supply chain teams to forecast demand as accurately as possible.

While most businesses have to deal with the complexities of seasonality, selling paint in India complicates things. Mr. Lade said that paint is more associated with festivities and celebrations. As a culturally diverse country, there are different festivals in different regions at different times. For example, in October / November, Diwali is celebrated in the North and West of the country. In February and March, other regions are celebrating the harvesting seasons. No matter what, though, the product has to be available on the shelf of the dealer.

According to Mr. Lade, consumers only tell painters / contractors what color they want; then it is up to them to get it. Mom and pop shops have limited working capital and they keep low inventory on hand. The Asian Paints’ business model helps their customers remain financially resilient. As a result, they rely on the Asian Paints supply chain to make products available that they will need.

The Asian Paints fulfillment network ensures that in larger cities and towns, if a dealer orders items in the morning, they will get a delivery the same day. In the largest cities, they can make two deliveries a day. Asian Paints was able to successfully launch a direct to dealer model, and over the last decade, technology has simplified a unified ordering experience. Since 1999, Asian Paints has run a very integrated planning system with forecasts, production, and fulfillment.

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