Birla Opus paints up the competition with 5% lower pricing and Rs 10,000 cr investment

The paint sector, once dominated by a handful of major players, is now witnessing the entry of new competitors backed by large conglomerates. Notably, the Aditya Birla Group’s Grasim Industries launched its new paint brand, Birla Opus, in February, marking its entry into the market with a substantial investment of Rs 10,000 crore. 

On its first day in the market, the brand launched 145 products with over 1,200 SKUs (stock-keeping units).

According to a report by Moneycontrol, the Indian company is making a significant bet as post-pandemic infrastructure development accounts for around 70% of total paint demand in the country. The sector has also witnessed remarkable growth in the last consecutive years of FY 22 and FY 23.

The government’s recent announcement of building two crore affordable houses under PM Awas Yojana, in addition to the three crore houses already under implementation, presents a significant business opportunity for paint brands.

We spoke to Inderpreet Singh, head of marketing at Birla Paints, to understand its strategy. "The brand is not exclusively targeting a single consumer type. Our goal is to become a Rs 10,000 crore player within the next three years."

“This can only be achieved by developing a brand that appeals across all price points, consumer bases, and segments,” he adds.

“Our focus with the master brand is to create an emotional connection that resonates universally without excluding any individual. The aim is to ensure broad appeal while attracting a diverse consumer base,” he emphasises. 

However, the brand currently has sub-brands in its portfolio that are not being actively marketed, as their primary focus is on building the master brand.

In April, its competitor Asian Paints launched Neo Bharat Latex Paint aimed at rural households, offering to paint a two-room set for just Rs 5,000.

According to Singh, the brand has installed a capacity of 130 crore litres per annum in factories, approximately 40% of the total industry's existing capacity.

The brand has a distribution at a pan-India level. In April, operations began in North and South India under the ownership of Kumar Mangalam Birla.

The paint industry experiences seasonality effects, with demand varying by season and location. During the rainy season, applications of exterior paints for outside walls tend to slow down. However, Singh notes that paint application does not completely cease during the monsoon.

As the festive season approaches, there is a rise in demand for interior paints. "Overall, fluctuations throughout the year balance out, resulting in steady business," he highlights.

Discussing the industry category, Singh, who previously worked with Mondelez International, mentions that the paint industry has become more organised over the last decade. Smaller players are being acquired, consolidating market share among a few key players.

According to CNBC, Birla Opus’s pricing is 5% lower than its competitors'. Additionally, the brand offers a 10% discount to dealers on volume. Can pricing act as a growth catalyst for the company?

Singh responds, “Beyond pricing, we aim to attract customers with superior product quality. We have benchmarked our products at every price point, believing they outperform competitors' offerings in the market.”

He emphasises the importance of dealers and distributors having access to a comprehensive range of products. Given that paint purchases occur every 5-6 years, consumers need to trust that the brand can meet their needs. “Being under Aditya Birla, with its heritage and trust, helps us win customers,” he states.

To further engage consumers, the brand has launched a home painting service marketed directly to them. Asian Paints also offers a similar service, accompanied by a separate brand film to promote this offering.

Paint sales primarily depend on contractors or retailers recommending brands to end consumers. To target them effectively, the brand is training them in business development skills and providing free education on paint applications for new painters.

Birla Opus’s maiden campaign  

The brand was the co-powered sponsor for the 2024 edition of the ICC T20 Men’s Cricket World Cup. The brand launched its maiden ad campaign with the tagline Make Life Beautiful.

The film showcases a 3D feature animation with a silhouette effect. There is a track in the background created by Indian composer Ram Sampath. The essence of the campaign is Duniya ko Rang Do (colour the world).

It was conceptualised by Leo Burnett and produced by Zombie Studio, a studio based in Brazil.

While briefing the agency, the brand aimed to differentiate from other players, thus opting for animation.

The category is taking a star-studded route, with major players roping in celebrities for ad campaigns. Virat Kohli for Asian Paints, Yash for Dulux, Ranveer Singh for Nerolac, and Akshay Kumar for Berger Paints are just a few examples. With such a trend prevalent, is Birla Opus also planning to engage an A-list celebrity?

“For this campaign, our focus is on the proposition and core thought, which is our celebrity. We’re committed to this approach for building the brand at present,” he mentions.

In the future, there is potential for celebrity endorsements for the brand as well.

The timing of the campaign during the monsoon season seems unconventional for the painting season.

Singh emphasises that before launching the ad, ensuring a robust distribution network and establishing a brand presence were paramount. Seasonal considerations did not deter them, as the goal is to create a substantial impact.

"Some questioned whether it's the right time, as it's not top of mind. However, this varies with regional weather patterns. Conversely, some view it as an opportunity, with competitors quieter during this period," he says.