S P Chaudhry, executive director, retail business unit, Hindustan Petroleum Corporation Ltd (HPCL) outlines the state-owned oil sector giant's aggressive retail strategy. The corporation is rolling out additional 750-800 outlets in the country and has earmarked around Rs800 crore towards capital expenditure retail development.

The company is also stressing on IT and automation of retail outlets. In an interview with Sajeev Nair, Chaudhry says that the entry of private players would not affect this Navaratna. Excerpts:

HPCL was among the first in the country to introduce a co-branded card. How is it faring?
We have notched up a customer base of over 8.5 lakh for our co-branded credit card between HPCL and ICICI. This card has the highest customer base and has been recognised by VISA as the fastest growing co-branded card in India.

Our 'Club HP Smart 1' pre-loaded card has a customer base of 2.5 lakhs. HPCL has also launched `Drive Track', a fleet card covering over 400 outlets along the Golden Quadrilateral routes and seven major highways. The card caters to the diesel requirements of fleet owners and large transport companies, which traverse on these routes. Our total card base has grown to over 1.2 million users, which is a testimony to the value HPCL provides to its customers through these card programmes.

With Club HP, we have created a customer-centric retail brand. The promises, which are delivered under the brand, are focused to delight the customer at the point of interface, which is the key to build a loyal customer base.

What has been HPCL's experience in driving growth in non-fuel business segments?
HPCL has built a profitable non-fuel business through a wide range of value-added facilities, including ATMs, take-away food counters and vehicle accessories among others. The business is being managed through tie-ups with entities including Cafe Coffee Day, Dairy Den, Western Union and US Pizza.

What were HPCL's objectives for launching branded fuels 'Power' for petrol vehicles and 'Turbojet' for diesel engines?
With a rapid increase in new generation vehicles, a great need for fuels that provide good performance and power emerged. This was voiced by customers at various forums and during market research conducted by us. As the new generation vehicles require better fuels to deliver performance they are designed for, we moved in to meet this need of the consumers with our value added branded fuels.

HPCL's branded fuel `Power' has been very well accepted, with a conversion rate of around 25 per cent at the retail outlets where the product was introduced. This is a clear indication that users need power and performance, and are willing to pay a premium for this.

The same is the case with 'Turbojet', which is available at over 125 markets and is also well accepted in the Indian market.

What are HPCL's future plans for 'Power' and 'Turbojet' ?
These two products have gained considerable penetration into the Indian market, with 'Power' being sold from 740 outlets in the country. The sales of this branded fuel accounts for around 8 per cent of the total petrol sold. We expect to double the number of outlets selling 'Power' this year and expect to sell around 3-lakh kl (kilo litres) this year

'Turbojet' is being sold through 450 retail outlets in the country, which is expected to triple by the end of this year. We expect sales to be around 2 lakh KL by the end of the year.

Wii Reliance Industries and others entering the retail segment and planning their own outlets throughout the country affect the state-owned and other oil majors?
Competition is good and it is the customers who benefit from this. However, this competition will not affect the PSU oil majors as they are already well established with their large infrastructure and retail network across the country. Moreover, the retail business is witnessing a healthy growth, which would provide room for the new entrants.

On the different initiatives undertaken by HPCL in the retail market and measures taken to build its retail brand?
HPCL has undertaken many initiatives including introduction of exclusive mobile laboratories, retail automation at select outlets, mobile retail outlets for rural markets, modernisation of our retail points through a new retail identity programme under `project Akarshan'.

What are the concerns of customers who visit a retail outlet? Going forward, how will HPCL address these concerns?
Based on the surveys conducted by market tresearch agencies for us, quality in general is the uppermost concern for consumers. In order to provide specific focus to this aspect, we have taken several measures under our banner 'Good Fuel Promise'.

We pioneered the concept of exclusive mobile laboratories as well as quality assurance through quantity control using latest technology of retail automation in line with our commitment to address the consumer concerns. During the year, 40 retail outlets in Mumbai and Vashi were covered under the retail automation programme, while 300 more outlets are lined up for the same.

We have also finalised an international agency, Bureau Veritas for conduting surveillance audits of our 'Club HP' outlets. A special scheme was introduced to cover our retial outlets under ISO accredition.