The paint industry in India is expected to grow significantly over the next 20 years, with the size of the industry increasing from Rs. 13,500 crores in 2000 to an estimated Rs. 1,00,000 crores by 2025. This represents a compound annual growth rate of 14-15%. Key drivers of growth include increasing urbanization, rising disposable incomes, and a growing emphasis on home decor and aesthetics among Indian consumers. Younger consumers are also helping fuel industry growth by purchasing homes and paint at younger ages compared to previous generations.

1. India Future Trend in Paints.

2. The Paint Industry in India Section I

6. India: Consumer trends today and future Section II

7.  India - The youngest country. But Average age likely to shift upwards Source: Euromonitor Report, How India eats, drinks and shops, October 2010 2020 2010 Median Age: 29 yrs Median Age: 26 yrs Age (in yrs) Population (in ‘000s)

8. Despite average age increasing, India will still remain youngest country Source: Economic times, Central Intelligence Agency World Factbook

9. Young India means, people have started investing in a house much earlier 1999 2010 Source: Financial Express, LiveMint --Average age of the home loan buyer-- 2004 43 years 33 years 36 years Given the size of the investment, it is unlikely that the age of the home buyer will drop beyond 30 years

10. No wonder, the average age of the paint buyer has gone down vis-à-vis 2005 --Age-wise split of paint bought in last 5 years-- 25-34 yrs segment is the largest currently Source: Indian Readership Survey 2005, 2010 (sample – 2.4 Lacs), Age 25+ 41 yrs Avg Age in 2005 Avg Age in 2010 38 yrs Gap between average age of new home buyer and the paint buyer is 5 years. It is still likely to be in the mid-30’s going forward

11. Paints Feeling 1 – Youngness Modern designs & textures Robust product features Faster application process 5 days End to End Solutions 15% PAINT TRENDS Example - Lift CONSUMER TRENDS Entertainment / Mood Enhancement Performance enhancement Impatient and Intolerant Treatment to solutions Cross Cultural

12.  Increasing affluence leading to lifestyle upgradation Customization of products Customization of credit cards (more likely in the institutional segment) Demand for more evolved products Automobile companies offering top end features like keyless entry, Bluetooth connectivity Rising income levels, has lead to a trend towards consumer up-trading and demanding better and premium products

13. Automobile market shows a distinct shift towards more premium cars 2005 2009 AC, PS model assumed as best selling model, Ex-showroom Prices: Autocar, in Rs. lakhs S = Avg. Sales volume per month Price range of top selling models: Rs 2.5L – 3.75L Price range of top selling models: Rs 3.0L – 4.4L Consumer upgrading his choice of cars. Today 3 among the 5 top selling cars fall above the Rs. 4 lacs price bracket Alto 2.91 S = 12,700 units Santro Xing 3.72 S = 8,900 units Indica 3.28 S = 8,800 units WagonR 3.77 S = 7,100 units Maruti 800 2.55 S = 7,600 units Alto 2.97 S = 20,000 units WagonR 3.81 S = 12,500 units i10 4.07 S = 11,400 units Indica 4.04 S = 9,700 units Maruti Swift 4.39 S = 8,900 units

14. Uptrading seen at both - the top as well as bottom of the pyramid TV category CAGR of 12.1% Source: Nielsen market monitor Source: Euromonitor, 2004, 2009 Vs. Premium Cosmetics 93.5% 5yr growth Vs. Regular Cosmetics Growth of 76% Premium market Mass market LCD TV 96% 5yr CAGR

15. Who would have imagined Indian customers paying 5 times more for a cup of coffee? Source: Economic Times Rs. 50 Rs. 10 2007 2010 400 937 Number of CCD outlets in India Café Coffee Day is India’s largest organized retail café chain Not only is the consumer ready to pay so much, but also demand for premium service is evident by the number of outlets zooming

16. Paints Feeling 2 – Aesthetics Premium with advance features Distemper ….. Emulsion 1…. Emulsion2 More new products Exciting & appealing packaging Market Insight / Supply Chain PAINT TRENDS Example - 70% users of smart phones does not use more than two/ three features Still ready to pay premium for other features CONSUMER TRENDS Technology Feel Good features Premium Look & feel Willingness to pay premium

17.  Emergence of the eco-conscious consumer Source: Greendex 2010 Concern for the environment has changed the purchasing behavior of consumers India toped the Consumer Greendex, compiled by National Geographic which studied 17,000 consumers in 17 countries

18. This phenomenon is evident across varied categories Source: Deccan Herald

19. Paints Feeling 3 – Guilt free Environment Friendly Products Contribution to society through paints Shopping for Cause PAINT IMPLICATIONS Example - Global Warming CONSUMER TRENDS Contributing to society CSR to ISR Doing Well, Doing Good Future of Luxury

20.  ‘ Health-consciousness’ the latest mantra Source: Euromonitor, Health and Wellness The health and wellness category expected to double by 2014

21. Evident through sudden increase of fitness centers in the last few years Source: Economic Times, IIFL Report Number of Talwalkar Fitness centers in India 35 outlets in 67 years 65 outlets in 4 years 2010 100 2006 35 1939 1

22. Also, the sudden boom of ‘being healthy’ across categories drives the point Even India’s largest english daily – The Times of India launched an entire bi-monthly supplement and a website dedicated to health called ‘Times Wellness’ Sugar-free Icecream Low Fat Milk Health with absence of negatives Multi-grain Snacking Probiotic Curd Health with nutrition enhancers

23. Paints Feeling 4 – Absence of negatives Lead free Low VOC No Smell Low Formaldehyde No hassles PAINT TRENDS Example - Sound from Refrigerators CONSUMER TRENDS Safety Healthy Non Polluting Hygienic

24. New Age Marketing Section III

25.  While digital seems to witness 3-fold growth SOURCE: Advertising spends, Magna Report 2009 2015 % contribution to total Ad spends, Ad spends USD mn 1621 mn 3421 mn 42% 43% 2X Predictions reveal, TV and print will continue to contribute the most even in the future 44% 44% 1700 mn 3508 mn 2X 111 mn 369 mn 3% 5% 3X

26. The ‘digital wave’ currently restricted only to a few categories Source: ComScore, Nov 2010 Paints category still has a long way to go….

28.  Modern trade is growing in India… Source: IBEF, Booz & Co. Analysis Source: Technopak, Booz & Co. Analysis Big retail chains increasing their presence by reaching out to the smaller town The economic slowdown dented the growth of organized retail during 2008-09, however the trend has picked up and the industry is expected to boom

29. Renowned brands have often opted the ‘Exclusive stores’ route and have seen consistent growth over years Source: Forbes, Tata Strategic Management Group Report, Economic Times 150 222 303 2003 2007 2010 Number of ‘World of Titan’ outlets in India World of Titan: An exclusive retail store of India’s leading watch-maker 450 723 1608 2001 2005 2010 Number of Zara outlets around the world Zara, which exclusively retails through its own stores, has been doubling every 4 years! 303 Titan exclusive stores account for almost half of the watch sales Over 10,000 multi-brand outlets account for the remaining 50%

31.  While with increasing affluence, one expects the population of working women to increase… Source: National Readership Survey 2001, 2006 (Sample:2.8 lakhs), Indian Readership Survey 2010 (sample: 2.41 Lacs), Hindu Business Line, Department of Demography The actual proportion of working women in India is declining A decline led by rural working women, due to urbanisation and decreasing dependence on agricultural activities.

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