The paints and coatings market in Asia Pacific is the largest market in the world. It is a diverse mix of regions and countries. Due to slowing economic growth, the market is not growing as fast as it used to. However, in the long term, growth is expected to pick up due to favorable economic and demographic trends occurring in the region.
Asia Pacific Paints and Coatings Market Size
The overall paints and coatings market in Asia is estimated at 28.3 billion litres and $89.4 billion. This market is led by China, which, although not growing as fast as in previous years, is still the largest paints and coatings market in the world. The next largest regions are South Asia (mainly India), Japan and South Korea.
Regional Market Overview
China
The main trend impacting the market is the slowing growth in China. Due to the sluggish real estate market, paints used in new construction are flat or declining. Additionally, manufacturing is flat. This has resulted in very limited growth in the Chinese market. However, refinish applications are stable and showing some growth. We expect this growth to continue for the rest of this year and next year before recovery begins in 2026. One silver lining for the Chinese paints and coatings market is the growth of electric vehicles. EV production continues to increase in China.
South Asia
South Asia (mainly India) is the fastest growing region in the world due to its booming economy. Factors influencing India's growth include favorable demographic and economic trends.
India currently has the largest population in the world. Not only is it large, but it's growing. What's more, it has a relatively young population. This is important because it increases demand for paints and coatings as young people enter the workforce at a time when they are at their peak spending years.
Not only is the population young and growing, but it is also migrating to urban areas. India has a high rate of urbanization and as people migrate from rural to urban areas, the trend is for a rise in middle-class consumers. This will fuel the growth of the coatings market. The government has implemented several programs aimed at investing in infrastructure, which is driving the growth of coatings. All this encourages multinational companies to invest in India, further fueling economic growth.
Despite all these positives, India cannot escape some of the global economic trends, especially those related to inflation. Many paint consumers in India continue to downgrade their paint purchases as a way of offsetting inflation. So, consumers who were previously buying premium paints are now buying mid-range paints and consumers who were buying mid-range paints are now buying lower-priced economy paints.
As a result, volume growth in the market has outpaced value growth. Despite the market impact, we expect growth to continue. Per capita paint consumption in India remains low. Hence, the market has a long way to go.
Japan and Korea
Japan and South Korea are the second largest paints markets in the region, accounting for 14% of the total. Japan has 10% of the total and South Korea has 4% of the total. These markets are more mature and therefore are not growing as rapidly. In Japan, the market is plateauing. In South Korea, the paints and coatings market is growing slowly.
Southeast Asia
Southeast Asian countries are expected to continue to grow, although growth this year has been limited by real estate problems in the Vietnamese market, which have hampered the country's building and construction market.
As mentioned in the previous paragraph on India, consumers are cutting back on paint purchases, resulting in slower overall market value growth. However, many of the economic and demographic trends occurring in South Asia are also occurring in Southeast Asia. A growing, younger, and urbanizing population will fuel market growth in the long term.
Australia and New Zealand
The paints and coatings market in Australia & New Zealand is a mature market, with steady growth over the long term. As in other regions, decoration is the largest segment, but the market has a diverse range of end uses. As in other parts of the world, sustainability is a key trend as consumers become increasingly interested in environmentally friendly products.
Central Asia
Central Asia is made up of countries such as Kazakhstan, Turkmenistan and Uzbekistan. Although it is the smallest market in the region, it is growing rapidly and is expected to continue to grow in the future.
The chart shows the projected volume growth rates by sub-region in Asia.
trend
The trends impacting the coatings market in Asia Pacific are similar to those impacting other markets worldwide. These trends include:
• Sustainability: There is an ever-increasing focus on sustainability. Sustainable coatings are driving the use of water-based and high solids coatings. However, sustainability increasingly means reducing the carbon footprint. Reducing the cure temperature of a coating is one way to reduce the carbon footprint of a coating.
However, given that some of our larger customers are conducting life cycle analyses, they need to reduce the carbon footprint of the entire coating solution, so reducing the carbon footprint of our raw material suppliers and paint manufacturing plants is key.
• Electric Vehicles: The EV market is booming in China and should start to grow in other countries as well. This is leading to an increase in the use of coatings and, in some cases, different types of coatings.
• Renewable Energy: Coatings used in renewable energy applications are growing rapidly. Applications for wind, solar and other renewable energy types are growing. This growth is already happening in China and is expected to grow in other markets in the region as well.
• Downgrading paint purchases: To combat inflation, many consumers are downgrading their paint purchases. Those who previously purchased premium paints are now purchasing mid-range paints, and those who previously purchased mid-range paints are now purchasing lower-priced economy paints. Some previous buyers of economy paints have even dropped out of the market.
Conclusion
Asia Pacific paints and coatings market growth is slowing due to the slowdown in the global economy. Economic slowdown in Europe and North America is reducing demand for products manufactured in Asia. Also, the downturn in real estate markets in China and other regions is slowing demand for paints and coatings. Despite these challenges, we are optimistic about the future growth of the market. Favorable demographic and economic trends should propel the market forward. CW
Headquartered in Toronto, Orr & Boss serves clients through regional offices and partners throughout the Americas, Europe and Asia. Our international reach enables us to attract a broad range of talented consultants with highly relevant international experience.
Douglas Bohn, Director of Orr & Boss Consulting, has extensive experience in various areas of the coatings industry including manufacturing and supply chain management, market research and acquisition support services. Prior to joining Orr & Boss, Douglas worked for Kimberly-Clark and ALCOA. Mr. Bohn holds a BS in Chemical Engineering from the University of Minnesota and an MS in Chemical Engineering and MBA from Massachusetts Institute of Technology (MIT).
