Due to the current boom in the construction and housing sector, the paint industry is experiencing rapid growth. In 2016, the housing sector’s share in GDP was 6.71% and it has maintained a growth of 3.99% over the past three years. (Pakistan Economic Survey 2016). This growth is evident in the fact that the two paint giants, AkzoNobel Pakistan (previously ICI paints) posted a turnover of Rs 7.2 billion in 2015, compared to Rs 6.9 billion in the previous year (ANPL Annual Report 2015), and Berger, a turnover of Rs 5.08 billion in 2016, compared to Rs 4.3 billion in the previous year (Berger Annual Report 2016).
Pakistan’s paint industry is valued between Rs 33 and 38 billion (source: Berger). The industry is divided into two segments; the organised one, accounting for 30 to 40% of the market, and the unorganised segment that takes in the rest. In the organised sector, major players include the multinationals (AkzoNobel Pakistan, Berger, Jotun, Kansai, Nippon) and local companies (Brighto,Diamond, Happilac, Master and Nelson).
Paints in Pakistan can be broadly classified into three categories; decorative, industrial and automotive. In the organised segment, the share of decorative paints is about 60 to 75% (source: Happilac and Berger). Decorative paints are either oil-based or water-based. They are further segmented into emulsions, enamels, distempers and deco paints for surface preparation and include wall putty, primers, special effect paints for interior and exterior use and wood polishing systems.
Following the entry of relatively new players in the market (Nippon, Kansai and Jotun), the rising demand and consequent competition, local and international paint companies have started aggressive advertising campaigns, with a focus on decorative paints for brand building and product promotion. These companies are working on innovation by producing environment-friendly products, introducing new finishes and textures along with an endless choice of shades. In terms of marketing, there has been a shift in focus, from painters or dealers to the end-consumer.
Aurora interviewed some of the major players to find out more about the reasons behind this rise in demand, the innovative ways they are adopting to attract consumers and new trends in the decorative category.
“Demand is increasing because customers are becoming aware about the various brands,” said Khawaja Ammad Khalid Sikka, Director Sales and Marketing, Happilac.
Abdul Waseem, Assistant Manager Marketing, Nelson Paints, was of the same opinion, adding that “people have more spending power; they are travelling abroad, seeing new concepts and designs and demanding them here.”
Both agreed that the globalisation factor has amplified the influence of western culture in Pakistan, with easy access to information on the internet playing a vital role. In their view, people are more conscious about their ‘house presentation’ and look forward to new product launches. Health and wellness, environment, convenience and technology were also important considerations, and contrary to earlier trends, when people used off-whites, ash-whites, light blues and pinks, people are now asking for all kinds of shades.
There have been changes in the decision making. “Earlier adults made the decision about which paint would go on which wall; now teens are actively involved in shade selection,” remarked Mohsin Bhatty, Marketing Services Manager, Berger.
“Earlier adults made the decision about which paint would go on which wall; now teens are actively involved in shade selection.”
Local companies believe that in contrast to previous times, when painting a house was only seasonal and the objective to merely give the living space a neater look, it has now become a family activity. Women have also become more proactive in negotiating directly with painters, dealers, contractors and architects. All family members enthusiastically participate in picking out colours.
Surprisingly, a significant chunk of this demand is coming from the rural segment, a positive sign for the industry. According to Waseem, if Nelson’s demand is worth 100 gallons in Sindh, about 15 to 18 gallons is the share of the rural areas. Furthermore, the demand is higher in Sindh compared to Punjab. In his opinion, there is a cultural factor at play here. “Sindhis love colour; it is part of their tradition. They pick the brightest colours for their walls. People in Punjab paint their house once every two years; in Sindh they will do it every year.”