Asian Paints: India’s Biggest Data Science Company that Sells Paint
Asian Paints — the familiar name across the Indian household for manufacturing and selling paint — knows exactly what paint you will buy and when!
Background
Asian paints was born in a small backyard garage of Mumbai in 1942, when its founders, Champalal Choksey, Chimanlal Choksi, Surykant Dani, and Arvind Vakil set out to address the dire oil situation in India, arising out of the import ban imposed in aftermath of World War 2. Asian Paints’ penchant for innovative ideas and out-of-box solutions was evident right since its early days, when it first decided to sell paint in tiny packets, rather than the customary paint tins, accelerating their distribution process. The company matured to become Asian Paints (India) Pvt. Ltd in 1965 and later a public company in 1973.
Today, the Asian Paints group stands to be the largest paint company in India and is in fact, more than twice as large as any other Indian paint company, besides operating in 15 countries and serving customers across 60 other countries. In this blog, we walk through Asian Paints’s astounding success story, analyze key elements powering its phenomenal growth and uncover the innovations the company leans on to provide it the necessary thrust towards distinguishing it from the competition.
So, what is the secret sauce in their paint recipe propelling Asian Paints so convincingly to the top over the years? Turns out, the secret pigment is data science.
The magic pigment: Data Science
Eschewing traditional operating procedures in distribution of paint, Asian Paints decided to be the maverick in operating via its own delivery network, without leaning on intermediary warehouses and supply chain entities. These traditional wholesalers or distributors typically ate into ~20% of the margins. By cutting them out of the loop, and delivering its paint directly to the consumers, Asian Paints unlocked a massive growth potential.
Asian Paints has access to copius amount of data it has been collecting over the years on the color, quantity, size and type of paint purchased during various times of the year in each retail store in each neighborhood in India. Equipped with this unique secret weapon when it comes to forecasting demand for paint, Asian paints finds itself in the catbird seat position, given its largest market share in India.
Leveraging all these data, Asian paints employs state-of-the-art Artificial Intelligence (AI) and Machine Learning (ML) based predictive tools to forecast demand. Such tools forecast the demand for a specific type of paint on a given day, in a given location, anywhere in India. Gazing into this crystal ball, Asian Paints can pre-emptively make sure to supply the required paint products, directly to the retail store, eliminating dependence on intermediate wholesale outlets. Today, the company delivers paints to 70,000+ registered dealers nearly 3-4 times a day! Astonishingly, the paint stock delivered pre-emptively, even gets sold off 90% of times, within just 3 hours of delivery!
While the competition, including other FMCG firms typically spend 30-40% of the retail price on logistics and distribution, Asian Paints can achieve the same, slashing distribution cost dramatically, to a mere 3%.
Take-away
Asian paints is a concrete example of how data can deliver incredible value and showcases how this luxury is not merely the preserve of tech giants such as the Googles and the Facebooks. Today, Asian Paints isn’t just a paint company, but also a data science company under the hood that aims to pre-empt and meet the market demand for its products.
References
- https://sightmachine.com/customer/asian-paints-digital-twin/
- https://edstechnologies.com/Mailer/aug15/Newsletter_August/images/PF-5.pdf
- https://cio.economictimes.indiatimes.com/news/strategy-and-management/revealed-how-asian-paints-leveraged-digital-innovations-to-become-customer-centric/60053105
- https://marketfeed.com/read/en/how-asian-paints-used-innovative-tech-to-drive-growth
Hi Aditya,
This was a super interesting read. I’m impressed that Asian can predict demand so accurately that 90% if pre-empted stock sells out when 3 hours of delivery. That’s incredible. It almost makes me think that they could explore a hybrid e-commerce model, where they can use their predictive insights to determine when and where to store their products in regional warehouses. Quite interested to see which direction they go with this. Thanks for sharing!
Really enjoyed reading this post, Aditya! Asian Paints was always one the most cutting-edge companies in India in supply chain management. Nthato – Just adding that they have also leveraged AR/VR big time to help improve customer experience as well as in training its sales staff. Thanks for sharing this, Aditya!
Thanks for sharing Aditya! I found your blog post as well as the videos incredibly interesting. 3 things came to mind as I was reading:
1) I am curious to know if Asian Paints not only uses historical, seasonal and cyclical buying patterns, but other future looking big data insights such as scraping home-influencer or interior designer profiles in India to best predict what colors will become popular and where.
2) I found especially interesting how the encumbent frequency of distribution (every three hours to every paint store) enabled Asian Paints to have a competitive edge not only in the 1970s but even today as they capitalized on the frequency of turnover into data insights. I’m curious how this sort of application could be extended to other fast moving consumer goods.
3) It appears the market for paints in India are all pre-mixed colors in pre-determined sizes. this differs from the market in the US, in which paint colors and quantities are custom mixed at stores using a small-footprint machine which knows exactly how much of each pigment to use to achieve the desired color. I wonder if this could disrupt Asian Paints model?
I wish I had this when I was painting my apartment! I find in general house refurbishment options are overwhelming – for someone who is a creative but also on a timeline, a company like this is a dream. The value added is exactly as you’ve laid out regarding being able to track and pattern match in a way that we often don’t even notice as consumers. I’m wondering how and if they integrate with something like an Amazon or the equivalent in India.