Jotun Group’s massive expansion through franchise route

One of the world’s leading paint manufacturers Jotun Paints of Jotun Group has been on a rapid expansion spree in India, specially strengthening its firm hold on the Western and Southern markets. The Company is planning to expand its retail network by increasing the number of retail outlets to 300 by next year from the existing 130. Initially, the Group will open around 150 exclusive showrooms in the cities like Chennai, Mumbai, Bangalore, Hyderabad, Goa, Pune, Cochin, Surat, Trivandrum, Calicut and Ahmedabad by the end of 2008. While recognizing the opportunity in retailing the products through exclusive showrooms, Jotun Group has adopted the franchise model for the expansion. However, the Group has proclaimed to infuse a fresh fund of Rs. 25 crore for the expansion. Other than this, it is also trying to encourage its existing shop-in-shop model to market the products. Mr. Claes Jansson, MD, Jotun India Pvt. Ltd., while stating the Group’s strategy for India, opined, “Jotun has been in the Indian market and has understood the market potential through extensive research. We feel that the Indian market is ready for us and intend on penetrating the market by echoing the retail strategy that has been highly successful internationally. The new global Indian consumer is aware of the latest colour trends. We feel that exclusive outlets will allow the Indian consumer to explore a wider range of options.” According to Mr. Percy Jijina, General Manager (Decorative), Jotun India, the Company unveiled its first manufacturing unit at Pune in April’08 with an investment of US $ 25 million and will soon construct another unit in Northern India. While heightening the expansion model, he also cited that the new outlets would be opened through franchise route and the typical investment required would be Rs. 15 lakh behind a 300 sq.ft. outlet. The Group is expected to wind down its present year with a pecuniary turnover of Rs. 200 crore and hopes to attain the double amount in the next year. Other than Europe, the Group has a very robust grasp in the Middle-East and Asia Pacific. Presently, it has 67 companies and 40 production facilities across the globe.