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| Engaging Deliberations mark 2nd day’s proceedings at special track on Retailing |
January 18, 2007
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You could be forgiven for thinking that you just trespassed into a seminar on hardcore retailing that had nothing to do with fuel vending, if you had walked in this morning into Federation House, New Delhi, where the special track conference on the challenges in retailing is going on as part of Petrotech-2007. For, the names of some of the speakers read like this: Mr. Manish Kumar, Head-Consulting, Chesterton Meghraj Property Consultants and Mr. Vikram Bakshi, Managing Director, McDonalds (India).
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The forenoon session of the special track conference grappled with some of the issues that lay at the core of modern day retailing in the petroleum space: Economics of fuel retailing and Non-fuel Retailing.
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Session IV on Economics of Fuel Retailing was chaired by the C&MD of Bharat Petroleum, Mr. Ashok Sinha.
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Beginning the session, Dr. B. Mohanty and Mr. Vijay Sethi, representing the petroleum planning and analysis cell of MOP&NG, brought out the changing market dynamics in the marketplace in terms of market share, throughput per pump and a host of other industry yardsticks during the last six years, particularly emphasizing on the scenario in both the pre- and post-APM periods.
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Mr. S. Thangapandian, Head (Marketing), Essar Oil, in his gripping presentation predicted that a phase of consolidation lay ahead of the Indian petro retailing industry especially jn view of the scorching pace in which the retail outlets have grown in the recent past. The natural downside to the growth has been a downswing in throughput per pump, which he prophesied to fall below the psychologically three-figure mark by the end of the year.
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Mr. Subbu Narayanswamy, Partner, McKinsey envisaged no-holds-barred competition in the coming period especially in the emerging economies like BRIC countries as oil transnationals move in looking for new business in view of the meager or negative retailing margins in the developed economies. He wondered whether India had it in her to come up with low-cost retail outlets a la low-cost auto components for which it’s known today.
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Mr. E. Unnikrishnan, General Manager (Pricing), IOC shared his views and experience with the audience on how to rein in the economics of fuel retailing. His presentation looked at the subject from the quad viewpoints of Retail Environment, Company Economics, Dealer Economics and Customer Value.
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The presentation by Mr. Sachin Gulati, representing the Head-Consulting of Chesterton Meghraj Property Consultants, threw up some very interesting little-known facts about the different ways in which the nearly 31000 retail outlets in the country could leverage real estate to supplement income from fuel vending business. His presentation belted out crisp numeric for developing non-fuel business in terms of rupee rate per sq. feet for putting in place ATMs, convenience stores and eat-outs.
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Session V on Changing Dynamics of Non-Fuel Retailing was chaired by Mr. R.K. Chaturvedi, COO (West), Reliance Industies.
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Beginning the session was one of the pioneers of Indian retailing initiatives, Mr. Subhankar Sen, Sr. Manager (Errand Mall), Bharat Petroleum. Mr. Sen narrated the inside story of one of the most well-known convenience stores chain, In &Out, a BPCL brand and how it was built brick by brick so as to provide a seamlessly integrated fuel and non-fuel experience to the modern day consumer, whom he described as an “aspiration-fired experience seeker” as compared to the conventional “routine chore doer”.
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Mr. Munir Suri, Director, AT Kearney India, in his educative presentation dwelt on the various ways in which the current margin pressure on retail business could be systematically tackled by creating and sustaining value in non-fuel retailing. Gen Next could be the target customer segment, he added.
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Mr. Vikram Bakshi, Managing Director, McDonalds India shared his recipe for boosting margins by building fast food outlets as a standard feature in the retail format. He emphasized the importance of differentiation, positioning and branding in this regard.
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This two-day Petrotech-FICCI joint initiative in the form of special track on the challenges in Retail business will see two more sessions post-lunch, “Marketing of Lubricants & Aviation Turbine Fuel” and “LPG Retail Marketing – New Territories”, before drawing to a close today.
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