Looking at home in a bright new way

Painting firm sees opportunitiesin China's big urbanization driveBy HUANG YINGhuangying@chinadaily.迷你倉com.cnEvery day, new homes are being built during China's rapid urbanization. But, for Wee Siew Kim, chief executive officer of Nipsea Group, it is the old homes he cares more about. After all, Asia's leading paints and coatings producer has prioritized a renewal strategy for both interior and exterior walls in the Chinese market.China has prospered in the past 20 years and a lot of its buildings were built 10 or 20 years ago. These buildings today may not look so new. Indeed in need of a lick of paint. Nipsea Group has showed strong interest in being part of the effort to renew them."I think as more people come and live in cities, more and more buildings will be built," Wee said. "If the trend is accepted by everybody, the next trend, coupled to urbanization, is renewal,"The annual overall revenue this year in the China market would increase by more than 15 percent year-on-year to exceed 10 billion yuan for the first time, he told China Daily.Wee's confidence comes from the country's continuous economic growth, as indicated by the growing gross domestic product and the country's urbanization drive.The total production of coatings reached 12.72 million tons in 2012, up 11.79 percent compared with a year earlier. China is the world's largest manufacturer of coatings, official data from the National Bureau of Statistics showed.Nipsea Group, set up as a joint venture by Japanese paint maker Nippon Paint Co and Singaporean Wuthelam Group in 1962, now ranks as one of Asia's leading paints and coatings manufacturers.It has grown to take charge of Nippon Paint's business in Asia now as well as running businesses in other sectors, such as auto and powder coatings.Having joined the group in 2009, Wee has witnessed rapid growth in recent years and will not be surprised to see a decent performance in China by the end of this year.The China market contributed more than 60 percent of Nipsea's total sales in Asia last year. The figure is expected to remain the same this year. Nippon Paint China is enjoying the fastest growth rate in revenue among the company's other markets in Asia."With the deepening progress of urbanization in the country, the construction sector will act as a major growth engine for the paints and coatings industry," said Wu Yanhuan, of Beijing S&P Information Consult Co Ltd, a consultancy committed to providing solutions to enterprise strategic developments.The Chinese are becoming more and more aware of the need for a "green" lifestyle, a fact that can be indicated by the figures demonstrating the growth rate of environmentally friendly paint products, Wu said.In July, paint production rose nationally 3.4 percent year-on-year, while "green" products showcased an average increase of close to 10 percent from a year earlier, she said.Some action has been taken toward this goal. Nipsea is now working with Chinese real estate developers closely to start renewing the living environment, some of them more than 10 years old."We not only give the property owners a whole new environment they are happy with, but also increase the overall value of these properties and the surroundings," said Wee.Last year, the coating market experienced a slowdown because of the government's policies to regulate an overheating property market.Despite the decline in decoration orders from new building supervisors resulting from the government's price-control measures on the real estate market, there is still considerable market potential for renovation or redecoration among residential buildings completed at the end of the last century or at the beginning of this century, Guo Xihong, an industry analyst, told Cinic.org.cn.This year China's property market has gained momentum. In the first three quarters, investment in the property market nationwide rose 19.7 percent year-on-year to reach 6.11 trillion yuan. And residential investment re儲存ched 4.2 trillion yuan during the period, up 19.5 percent from the previous year.Nipsea chose to work with top developers in the country. Among the first 100 developers in China, more than 50 are Nipsea Group's strategic partners in this initiative. The paints and coatings giant intends to engage in both their new building and old building projects amid a recovering property market.Nipsea started rolling out this concept of a renewal initiative last year. It involves the whole chain from product quality, through to dealer bases and painter training. For example, the company has 11 schools to train painters, with about 40,000 painters gaining official qualifications.The plan for the renewal initiative in 2014 is to reach out to 50 cities in China within their resources — a rather conservative move from a business reaching out to thousands of homes every day.Wee said the reason the company is being very careful is because it wants to ensure the service delivery system is firmly in place so it won't disappoint its customers.The CEO believes the huge potential for the growth of his business comes from raising awareness among customers on how easy and convenient it is to repaint both interior and exterior walls — a relatively new concept among Chinese homeowners.In the interior coating business areas, Nippon Paint China has been trying to position itself to be more relevant to the local marketplace by re-emphasizing the role of coatings in the life of a person."Painting is not just a functional thing to protect the walls," said Wee."It has texture. It has color. It brings out a whole new environment. And it actually involves emotions."He said the established thought is that re-painting is troublesome because it involves a lot of moving of furniture and items in the home, often deterring people."If you use the latest technology and odorless paint and have professional painters do the painting job you won't have the hassle of being disturbed or having to relocate when the painting is being done," said Wee.Exterior jobs are obviously even less disruptive."One big difference between our markets in China and other countries is customers' attention to the exterior," Wee said.In a lot of Asian countries, interior and exterior paints account for half of the market respectively. But in China, almost all the market is dominated by interior paint products. Currently, for Nippon Paint, the exterior paints sector only contributes between 6 and 7 percent of its total performance in China, according to the CEO.To exploit more market potential in the exterior paints sector, the company tries to advocate the concept that repainting is as easy as people changing their clothes — and it's very different from changing tiled walls.Compared with European towns where buildings or houses have various colors, buildings and their walls in Chinese communities don't have much variety in tiles and paints, Wee said, referring to them as bare walls."China should be a more colorful place," he said.Nippon Paint China entered the e-commerce field in 2011, through setting up an online store on tmall.com, the business-to-customer arm of e-commerce giant Alibaba Group Holding Ltd.By the end of August 2012, the total sales of Nippon Paint's e-commerce channels exceeded the annual figure of a year earlier. The sales generated in the first nine months last year increased by 72 percent year-on-year.Although electronic business contributed about one percent of Nippon Paint's direct sales, it has developed at the fastest pace.This year, it has made its presence on Amazon.cn and Jd.com."Our online store not only supply products, but also services. That leaves plenty of cooperation possibilities between our local dealers and us," said Wee."I think as more people come and live in cities, more and more buildings will be built. If the trend is accepted by everybody, the next trend, coupled to urbanization, is renewal,"WEE SIEW KIMCHIEF EXECUTIVE OFFICER, NIPSEA GROUPmini storage