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0 11 th Energy Summit Petroleum Retailing – Future outlook 17 th October 2008.

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Presentation on theme: "0 11 th Energy Summit Petroleum Retailing – Future outlook 17 th October 2008."— Presentation transcript:

1 0 11 th Energy Summit Petroleum Retailing – Future outlook 17 th October 2008

2 1 Understanding Retail Business

3 2 Market size: Volume Year : MMT 33.6 MMT 9.19 MMT Retail market is 36% of petroleum products sold by volume in the Country

4 3 Market Segmentation : Retail Business MS (R) HSD (R) 3.90 MMT 1.48 MMT 2.11 MMT Year : MMT 7.12 MMT MMT 5.04 MMT 4.37 MMT

5 4 Evolution of Retail Business National Oil Companies Regulated network expansion Sellers market Low infrastructure and service standards De-regulation of Petroleum Retailing

6 5 Impact of De-control on Retail Business

7 6 Impact of Deregulation - Network Explosion Oil Co.Apr. 02Aug. 08 IOC Group BPC HPC RIL-1432 EOL-1152 NRL/Shell/ONGC-164 TOTAL

8 7 New Entrants: Business Proposition Automated ROs assuring highest level of Q&Q Professional Forecourt service Highest level of house-keeping Distinctive Visual Identity Fleet Loyalty Programmes Most ROs company operated Non-fuel facilities like Dhabas, C-store, fast food, ATM, Vehicle Care, Toilet Complex etc. Discounting Strategy

9 8 Activities of Existing Players New Retail Visual Identity Branding of RO Activities Introduction of branded fuels Loyalty Programmes Non-Fuel Convenience Retailing

10 9 Challenges from All Sides

11 10 Improved Visual appearance Increased focus on Q&Q Branding of ROs & service Aggressive new commissionings CNG, Auto-LPG network expansion Use of domestic LPG Diversion of PDS/PMS SKO Substitute Fuels Existing Playesr Challenges from all sides... Customer expectations gone up Quality and quick courteous service important Bargaining power of specific Customer groups New Entrants High customer demands Under pressure on several fronts Approval for ROs High Focus on Q&Q and Service Attractive Appearance

12 11 Future Outlook – Indian Oil perspective

13 12 Future Outlook – Indian Oil perspective Addressing Customer s need of Q&Q Market Segment wise Proposition Network Augmentation Top Line Loyalty Engines Dedicated Retail Organisation Galvanising Dealer Organisation

14 13 Addressing Primary Need of Q&Q High Frequency Sampling Third Party Certification Retail Automation Vehicle Tracking Capability Building of Dealer Organisation

15 14 Addressing Secondary Need of Network Visual Appeal & Value Added Facilities Distinctive Retail Visual Identity Introduction of Branded Fuels Non-Fuel Facilities

16 15 Introduction of Branded Fuels Dosed with Friction Busters Market share (48.8%); available in 7260 ROs- (52.7% RO covered) Conversion at 25.9% Market leader with highest share (60.1%) available in 10,066 ROs (56.7% RO covered) Conversion at 16.4%.

17 16 Non-Fuel Business Non-Fuel Business at Retail Outlets driven by time paucity in matured markets This Activity is nascent in India High network of Mom & Pop Stores are efficient and popular popular Value added services Present IndianOil approach thru Alliance Route

18 17 Market Segment wise Proposition

19 18 Xtracare for Urban Markets Third-party certification & sampling to ensure highest industry standards 100% new generation DUs Availability of premium fuels Cashless transaction capability Distinctive Branding Trained manpower Automation Additional Compensation More than 2000 ROs in place

20 19 Swagat for Highway Markets Large format networked ROs on GQ, corridor and major Highways meeting Fuel and non-fuel needs Facilities include automated services, food and beverages, communication, shopping, customer health, hygiene, cashless transactions Distinct branding Network of 99 ROs in place

21 20 KSK for Rural Markets Low cost infrastructure For meeting Agricultural requirements Addl. Inputs like Fertilizers, Seeds, Cement and Spare Parts for augmenting dealer revenue Nodal point for Community Services 2200 ROs commissioned

22 21 Top Line Loyalty Engines

23 22 Xtrapower Program Best and fastest growing reward program in industry for fleet customers Current strength of over 1.1 million cards and spend of over Rs.1000 crores per month Accepted at over 4000 ROs across the country

24 23 XTRAREWARDS TM Program First & only on-line cash loyalty program in the Industry Instant membership Program launched in Bangalore, Mumbai, Delhi, Ahmedabad, Chennai, Hyderabad, Coimbatore & Mysore. Target to enroll 6 lacs customers during current year. Alliances with Dominos, Subhiksha, JK Tyres, Rediff Shopping and others Xtrarewards

25 24 Challenges before dealership network

26 25 Challenges before dealership network Increase in Retail Outlet Network Increased Customer Expectations and Shifting Loyalty Low RO Visual appeal and house keeping standards Increased working capital requirements Inadequately motivated & trained manpower Reduced sales and profitability

27 26 Way Forward Economise on logistics costs Adoption of technology in Retail Extending reach of network Wholesome offering to customers in each segment Thrust on Q&Q Alternative Fuels – Auto LPG,CNG Thrust on Bio-Fuels Upgraded fuels for niche markets Improved customer service standards

28 27 Thank you

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