The Hindu Business Line : Oil cos targeting rural customers

DOMESTIC petroleum majors are entering retail in a major way and are targeting rural customers to spur growth. Hindustan Petroleum Corporation, Bharat Petroleum Corporation, Indian Oil Corporation and Reliance Industries have addressed the segment in various ways and are attempting alliances with corporate and food retailing businesses.

Vehicle owners present huge opportunities because they are repeat customers. According to Mr A.M.K. Sinha, GM, Retail Sales, IOC, the company has 10,600 retail outlets and generates Rs 70,000 crore in terms of revenues annually.

The company has initiated the Kisan Seva Kendra that will open 1,000 small volume outlets that will offer fertilisers, fuel, financial and banking services. It is already in dialogue with IFFCO and ICICI Bank regarding this.

Mr Sanjay Krishnamurti, Executive Director, Retail, BPCL, said the company had moved from `fuel space' to the `customers mind space'. Despite having a huge number of retail outlets, this segment of customers was not understood very well, he said, adding that convenience stores and cafeterias offered `huge value upsides'. He said four categories provided huge potential — fuel, shopping, stock-ups and impulse purchases, entertainment and eating.

HPCL, on the other hand, is modernising its retail outlets and moving from the `commodity' to `brand' mindset. According to Mr S.P. Chaudhry, Executive Director, Retail, HPCL, the company was tying up with reputed brands, financial service providers to offer a diverse range of services at its outlets.

Some of these include vehicular care services, with Hyundai and Tata and music and books with the help of Music World and Crossword.

The company would focus on the small format and success would depend on offering value and efficiency of the supply chain.

The company hopes to get 27 per cent of its business from rural areas and 63 per cent from highway traffic.

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