New player will always need more dealers: JSW Paints CEO

16 Jan 2023 CW Team

One of the most recent entries in the paints industry, JSW Paints, expects its revenue to double from 10,000 million in FY22 to 20,000 million in FY23 and to reach 50,000 million by FY26.

The company had difficulties when some of its dealers closed shop within a year, which affected it more when it first started, making its journey in the paints sector difficult. Although it had complained to the Competition Commission of India (CCI) about unfair business practises by one of its competitors, the agency rejected its complaint in a final ruling.

In the National Company Law Appellate Tribunal, the company has now contested the CCI's order.

Sundaresan said when questioned about the CCI directive, "As a new entry, you would always have to open many more than an old company, how else could you catch up on a competition's network of 70,000+ dealers and we could not even add 1,000 dealers in the first year."

This declaration follows a ruling that stated Asian Paints was not preventing JSW Paints from entering the market.

JSW had informed the regulatory body that Asian Paints had targeted dealers, distributors, and retailers working with JSW Paints in 2019 right after the start of its decorative paints division.

In 2019, JSW informed CCI that its rival Asian Paints had threatened to cease supplying some dealers and instructed dealers to stop doing business with JSW. Along with other things, it demanded that dealers take JSW Paints product displays down from their retail shelves and threatened to deny them discretionary discounts.

Sundaresan responded to CCI's claim that his business had added more dealers than its rivals by saying, "We are a company that opened only that year (2019), and if you open some dealers and they close that same year, it is extremely devastating to us as a new company. When compared to a well-established competitor, for whom the dealers who closed their doors may have been opened over the past 75+ years, this is used to calculate net adds, leading to the conclusion that our net additions were higher.