Birla Opus Paints unveils expansion strategy for tier 2 & tier 3 markets

Birla Opus Paints, the decorative paints division of Grasim Industries, is set to penetrate tier 2 and tier 3 markets through an innovative franchise model, targeting smaller towns with compact 300-400 square feet stores equipped with paint consultants and trained local entrepreneurs.

“The majority of stores which will actually cater to metros, non-metros, tier 2, tier 3 and small India are the franchise stores,” CEO Rakshit Hargave explained.

The company, which launched operations in April 2024, plans to establish these franchise stores as miniature versions of their larger experience centers.

On Tuesday, March 25 the company inaugurated two new experience stores in Mumbai, including a flagship location in Worli. 

Each store will feature a paint consultant, the complete product range, and be run by a dynamic local entrepreneur trained by Birla Opus. The company has already established over 400 such franchise locations across India and plans to add more monthly.

The franchise model represents a strategic approach to penetrating smaller markets, offering localized service and expertise while maintaining the brand’s comprehensive product range. “It will be a place where people can come with families, can get their designers, architects,” Hargave explained, underlining the community-centric approach of their expansion strategy.

Currently operating in approximately 6,000 towns, Birla Opus aims to onboard close to 50,000 dealers by the end of the year. The franchise strategy complements the company’s existing company-owned stores in major metropolitan areas, creating what Hargave describes as a “vibrant ecosystem” for customer interaction.

Despite facing a market slowdown in the decorative segment, the company remains optimistic about its growth prospects. “…we can see that in the last six (to) eight months there has been a slowdown. But we believe that the slowdown is also cyclical and sooner or later the market will improve,” Hargave stated.

The expansion strategy is backed by a robust manufacturing infrastructure. With five plants currently operational and a sixth facility in Kharagpur, West Bengal, expected to begin trial manufacturing in the first quarter of the next fiscal year, Birla Opus is positioning itself as a comprehensive national player.

The company’s dealer approach prioritizes profitability and efficient inventory management. “We do not believe in building stock,” Hargave noted, emphasizing their focus on providing dealers with good return on capital employed.

Hargave highlighted the company’s long-term vision of achieving a turnover of approximately 10,000 crores in three years of full-scale operation. The company is targeting a high single-digit market share by the end of the current fiscal year, with plans to continue gaining market share in the coming years.

As Birla Opus completes its first year of operations, the company’s focus on tier 2 and tier 3 markets through its innovative franchise model appears to be a key differentiator in the competitive decorative paints segment.

The shares of Grasim Industries Limited ended today at ₹2,566.50 up by ₹53.30 or 2.12 per cent on the NSE.