Urban Retailing Process Club Meeting

Maker Towers Mumbai28th & 29th May-2015

Emerging Urban Potential

Type of Urbanization

Future of Urban Mobility

Emergence of Alternative Fuels

Creating Value for Many

Ground Realty

Action Plan

Agenda

Emerging Urban Potential

1531.4

357.6

1016.9

1458.41304.5 1371.7

Emerging Urban Potential

Urban

All India

Rural

Urban India will drive a near fourfold increase in average national income Compound annual

growth rate, %

Emerging Urban Potential

1500

1200

900

600

300

0

300 M 361

50 M 16% 62 (17%)

1350 M

1 MARCH , 2001, 1027 M

1947 1951 1961 1971 1981 1991 2001 2011 2021

218 (25.7%)

285 (27.8)

366 .3(31%)

459 M (34%)

Emerging Urban Potential

Source: India Urbanization Econometric Model; MGI Analysis

Emerging Urban Potential

+250

Total Population 856 1,040 1,155 1,470Million

Urbanization rate 26 28 30 40% Source: India Urbanization Econometric Model; MGI Analysis

Cities are likely to house 40% of India’s population by 2030.

220

290

Urbanization,2008 %

Pondicherry

GDP 1990-2008Compound annual growth rate, %

Fastest growing states also had the highest urbanization rates

Gujarat

Maharashtra

Bihar

Tamil Nadu

HaryanaKerala

Andhra Pradesh

HimachalPradesh

Orissa

Jammu & Kashmir

North East

West Bengal Punjab

Chhattisgarh

Jharkhand

Madhya PradeshUttar Pradesh

Rajasthan

Uttaranchal

Karnataka

GDP 2008,2008 prices

Delhi

Emerging Urban Potential

Emerging Urban Potential

Mega Trend :

Urbanisation Type In India

Type of Urbanization

Type of Urbanization

INDIA URBANISATION SCENARIO

CITY CITY

HINTERLAND

Type of Urbanization

Type of Urbanization

Type of Urbanization

Type of Urbanization

Future Mobility Scenario & Consumer Trends

Greenovators

High Frequency

Commuters

Family Cruisers

Sensation Seekers

Silver Drivers

Low End Mobility

Future of Urban Mobility

Future Mobility Trends

Mega Trends• Feminization • Individualization • Globalization • Neo-Ecology• Inter-connectedness • Mobility

Socio-Consumer Trends• Down aging• Simplify • Deep Support • Family 2.0• Multi-Graphiy • New LUXURY • Neo- Cities • Cheap- Chick • Greenomics

Alternative Fuels for Alternative Vehicle

Electric Vehicle

CNG AUTO LPG ELECTRONIC VEHICLES BIO DIESLE

Conclusions

• Early penetration of EV in India would come through 2-wheelers; this would create infrastructures that would facilitate larger vehicles. • Low carbon transport transition shall deliver Air Quality and Energy Security co-benefits

• Improved batteries with higher energy density will also help reduce weight of batteries: further pushing down EVs costs

• Limited range per charge put constraints on penetration of cheaper EVs for urban transportation

Scenarios Description: EV & EV_LCS

Electric Vehicle Scenario (EV): Assumptions

• Domestic policy supports: Direct capital subsidy, improved charging infrastructure, dedicated lanes, incentives for R&D in power train, batteries and smart grid technologies, quotas for EVs in urban public & goods transport

•Battery costs comes down to half of current costs in next 10-15 years: driven by advancements in battery technologies, improvements in battery capacities, declining component costs, and economies of scale in production

Mega Cities

Mega Regions

Mega Corridor

Sustainable Smart Cities

Retail Outlet Value Explosion

SocialDimension

Mental Dimension Services

Fuels

Value

l CCTV Coverage

l Auto Ticketing

l Digital Density DS

l SMS to Customer (RFID)

l 2T Dispensing

l Automation

l Fool proof traffic management

l Dedicated tank lorry decantation area

l Emergency helplines

l No leakage/oil spillage

SAFETY HI-TECHl 24 hours operation

l ATM

l Doctor on call

l Insurance

l Utility payment drop box

l Refreshment corner

l Railway reservation

l Consistency

l Breakdown

l Flat Tyre

l Free Air

l Free Water

l Clean Toilet

l Seamless practices

l Petro Card Community

l Premium Fuel Community

l Customer Panel

l ARB Users

l Office Bearers of Adjoining Societies

PRODUCTS

QUALITY

BRANDS

l Speed

l Mak

l Petrocard

l Hi-speed

l V-care

l Fleet card

l NPND

l NANOl Correct Delivery

l Correct Quality

l Lane Optimization

l MS

l LUBESl HSD

• CNG

Value Explosion of our PFS Platinum Outlet

Proposed Communication Strategy

Value

Proposition

Re-Lauanch

Advantage

Demonstration

Resonate with

the customer

Differentiate with the

competition

Re-enforcement of

image

Points of Leverage

Image

Augmentation

Communication Explosion

Thanks

Future of Urbanization in India

Urban Scenario

Urban Trends

Urban Consumer Behavior

Smart Cities/BPCL First

Mobility Trends Mobility Types

Future Business Model

Mobility Types 2020

Future of Urban Mobility

Mega Trends

Social Types

Consumer Behaviouer

Future of Urban Mobility

4654 58

69

5446 42

31

1990 2001 2008 2030

URBAN

RURAL

15,903 29,100 49,043 238,041100%=

Cities will account for nearly 70 percent of India’s GDP by 2030

Share of India’s GDP%; rupees billion, real 2008

7.4 100

5.9 28

728.3

Compound annualGrowth rate, 2008-30%

Share ofgrowth%

The Middleweight Challenge

• These cities by 2025 will have GDP in the middle of top 20.

• They are Vadodara, Nagpur and Vizag.

• Average GDP/per capita of emerging market cities is 30% of developed economic levels.

• This gap will be closed and the figures will rise to 60% by 2025.

Growing Middle Class

l Benchmark levels = Rs.9 lac per year.

l No of households with this income will be more in the emerging markets then developed economies.

Shifting Demographics

l 50% of urban children and 50% of urban elderly with incomes above Rs.9 lacs will stay in emerging market cities.

Creating a Pull Effect in Urban Market

l Homogeneous Customer Behavior

l Fast Life style

l High Volumes

l RO Expansion Difficult

l Similarities < Differentiations

l Volume Shifting to Suburbs

4 D Pull Effect

Functional

Smooth entry & exit

l Easy ingress & regress

l Dedicated Lanes

l Best Lay out

l Best MPD configuration

l Convenient Maneuverability in forecourt, no queuing of vehicles

Social

Ability to interact with people through

l Petro Card

l Premium Fuel

l Customer Panel

l ARB Users

l Official Bearers of the adjoining societies

Cultural

Ability to deliver Promise of the company being:

L Innovative

l Reliable

l Caring

Mental

Ability to help transform others through

l Regular Q & Q

l Product Knowledge Transfer

l Automation Knowledge intervention

l Experience of Auto Ticketing,

l SMS

l Helping attitude of all ( DSM & Dealer)

Dimensions

Paradigm Shift

Current Reality Leadership Model

Foreman Compulsion Business Driver

Focus Short Term Gains Long Term, Life time value chain

Product Single Product Multiple Products

Brand Structure Simple Complex Brand Architecture

Number of Brands Focus on single brand Category Focus – Multiple Brands

Dealer Communication Role

Coordinator of limited options

Team leader of multiple communication options

Communication Focus Internal External as well as internal

Business Focus Sales and Shares Identity of a friend in the locality

Creating Pull Effect in Urban Market

Strategic Plan

NROUPGRADATION

ACTIVATING STRATEGY

MODEL IMPLEMENTATION

RESOURCE ALLOCATION

STRUCTURALIMPLEMENTATION

MANAGING CHANGE

ROLE CLARITYIMPLEMENTATION

STAKEHOLDER MANAGEMENT

FUCTIONAL IMPLEMENTATION

ACHIEVING EFFECTIVNESS

OPERATIONALIMPLEMENTATION

Evaluation & control

FEED BACK

Creating Pull Effect in Urban Market

Training Dealer/DSM

RO specific Element in Place

Position Practices

Communication

Creating Pull Effect in Urban Market

Focus Activity– Services– Safety– Hi-tech– Social Dimension

FUNCTIONTING PRACTICES RELATIONSHIP

Dealers BPCL Promise– Innovative– Caring– Reliable

Activities Done by the Dealer

Volume Driver

Benefitl Functionall Emotionall Self Expressivel Social

Creating Pull Effect in Urban Market

SocialFunctional

Mental

RO Relationship Building

Creating a “ Pull Effect” in Urban Market

l Sales Officers / TM to develop DNA of

the RO E.g. All Platinum PFS ROs

l Re-interview all the DSMs

l DSM & Dealer connect is the KEY

TRAINING

Communication to the Customer

Need for New Town

• India needs 6000 town with > 1 LacPopulation.

• 423 towns & cities (> 1 lac Population):60.3% of urban population.

• 4728 towns (< 1 lac population):39.7% of urban population.

• Some of these urban areas could be Upgraded as integrated towns.

INDIA URBANISATION SCENARIO

Towns to accommodate 70%

70%

Suburbs up to 30 min 20%

Villages 10%

At least one town within 60 min.

• The most cost effective efficient and environment

friendly transport system is provided by having • Rail as the basic and;• Walk, Cycle, Rickshaws etc. feeders.

• Development of new rail-based transportationnetwork in the existing cities require

substantialcapital investment

• On the other hand developing new urban centers along the existing rail corridors prove cost effective.

Use of Existing Rail-Corridors

INDIA URBANISATION SCENARIO

Area 1,96,024 sq.km.

Total Population (2001) 5,05,96,992

Future Population 9.6 crores

Urban Population @ 75% 7.2 crores (approx.)

Required Corridor Areato accommodate 7.2 crore population (assuming 10, 000persons per sq. km.

7,200 sq.km

INDIA URBANISATION SCENARIO

Area 308,000 sq.km.

Total Population (2001) 96,752,247

Future Population 18 crores

Urban Population @ 75% 13.5 crores (approx.)

Required Corridor Areato accommodate 7.2 crore population (assuming 10, 000persons per sq. km.

13,500 sq.km

INDIA URBANISATION SCENARIO

• Existing Potential Corridor in the state : 2610 km

• Developing 50% of the potential corridor will be adequate to accommodate the future growth of the urban population.

INDIA URBANISATION SCENARIO

Area 2,75,068 sq.km.

Total Population (2001) 13,500

Future Population 14 crores

Urban Population @ 75% 10.5 crores (approx.)

Required Corridor Areato accommodate 7.2 crore population (assuming 10, 000persons per sq. km.

10,500 sq.km

INDIA URBANISATION SCENARIO

• Existing Potential Corridor in the state : 1940 km

• Developing 37% of the potential corridor will be adequate to accommodate the future growth of

the urban population.

INDIA URBANISATION SCENARIO

• Existing Potential Corridor in the state : 2815 km

• Developing 37% of the potential corridor will be adequate to accommodate the future growth of the urban population.

INDIA URBANISATION SCENARIO