Shell Thailand looks to retail to boost fuel sales

After focusing on selling fuel in the Kingdom for several years, the Shell Company of Thailand plans to revamp the retail stores at its petrol stations to support the growth of both its oil and non-oil businesses.

Ruengsak Sritanawiboonchai, Shell Thailand’s special projects and retail marketing delivery manager, said the company believed customers were wise to the kind of fuel that answers their demands, and were not influenced only by price. An improvement in its retail stores will lead to more traffic at its fuel stations, he said.

Despite serious competition, Shell Thailand’s annual sales volume continues to grow by 3 per cent in line with the market – thanks, the company says, to the quality of its fuels.

However, the narrow marketing margin in the oil business is prompting energy companies to seek profit from other business.

As a result, Shell Thailand is seeking to reinforce its non-oil business, especially retailing including ProServ, the car service centre. 

It will increase the number of tenants at station sites as well.

The company already owns a retail arm under the brand Select. Even if the retailing revamp means taking on other partners, the Select brand will remain, he said.

Customers today want more services apart from refilling their fuel tanks. 

Therefore value service at petrol stations is important. Consequently “we have developed Shell Motorist Applications on mobile devices, to help customers find Shell stations across the country”, he said.

Ruengsak said this was the first major revamp for convenience retailing at Shell Thailand in several years. A plan for a retailing business model is expected to be finalised in the next two months.

Shell Thailand spent many years promoting that all fuels are not the same by grouping its premium fuels as V-Power while FuelSave was promoted as an efficient fuel designed for economy.

Ruengsak noted that each year the Shell Group has allocated US$1 billion (more than Bt30 billion) for research and development to improve existing fuels and design new formulas in line with new engine technology. 

The development process takes many years before formulations are ready to be launched on the market.

R&D teams at technical centres work with original equipment manufacturers (OEMs) under a technical partnership to co-develop new and improved existing formulas.

The latest V-Power Nitro+ is an example of such technical partnership. Shell’s R&D team and its long-term technical partner Ferrari, an Italian automotive producer, worked together to exchange technology information and blend fuel components for both motor racing and 

road cars.

The two companies have similar aims and Ferrari has enabled Shell to provide premium fuel for the track and the road with the key message that fuel for Ferrari racing and road fuel are similar.

Thailand is the first of four countries to launch V-Power Nitro+ petrol, the latest premium fuel of Shell’s V-Power family.

Ruengsak said the new formula would help drive the proportion of V-Power sales proportion closer to FuelSave, which has the major sales volume in Thailand.

He said Shell Thailand had the highest sales volume in Asean, leading the group to choose Thailand as among the first countries selling Nitro+.

Instant starting, cleanliness and acceleration are the three main components of V-Power Nitro+, the company says.

In only two weeks since the launch of V-Power Nitro+ in Thailand, sales volume has exceeded that of the previous V-Power formula, he said.