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ET Intelligence Group: Asian Paints on Friday introduced the acquisition of two firms – one engaged in ornamental lighting and one other in fenestration. These are small acquisitions enabling the corporate’s foray into these two new segments.

9 years in the past, the ornamental paints market chief made an entry into modular kitchens by acquisition of Glossy Kitchen and a 12 months later into toilet fittings by the buyout of Ess Ess tub fittings. Nonetheless, these companies contributed solely 2.5% to the corporate’s prime line for the 9 months ended December 2021.

It’s unlikely that the newest acquisitions are going to make a serious distinction to the corporate’s general enterprise within the close to to medium time period. Asian Paints intends to increase from ‘share of floor’ to ‘share of area’ in properties by presence in kitchen, tub, furnishings, furnishings and lighting. From an ornamental paints firm, Asian Paints intends to develop into a whole house decor firm and these small acquisitions look like child steps towards reaching that objective.

The inorganic enlargement is prone to fill the gaps that exist within the firm’s bouquet of house decor providers.

Nonetheless, in chalking out its imaginative and prescient of changing into a house decor main, the corporate is uncovered to a brand new drawback – that of competitors. Competitors has been intensifying for the corporate in each its previous and newly entered segments. Constructing materials and steelmakers, such because the JSW Group, Grasim and JK Cement, have entered the ornamental paints section. Within the house decor market, a motley group of firms like Ikea, H&M, Fab India, Marks & Spencer and NoBroker are eyeing progress apart from the web and unorganised gamers.

Throughout the pandemic, Asian Paints had rolled out hand and floor sanitisers that introduced it in direct competitors with fast-moving shopper items makers comparable to Reckitt Benckiser, Hindustan Unilever and Godrej Client Merchandise.

Asian Paints has had a formidable market share and a robust moat within the ornamental paints section. It’s attempting to construct a moat within the house decor section, too, by changing into a one-stop-solution supplier for the buyer. Nonetheless, whereas the moat constructing is a long-term proposition, the problem of elevated competitors is quick. For an organization that’s already battling the problem of uncooked materials inflation, battling competitors on a number of fronts is one other key space occupying managerial bandwidth. For now, the paints firm has found small acquisitions to be a approach of buying a relative edge towards gamers within the house decor class.