India is one of Shell’s top five markets, and the brand now wants the country to be among its top three markets globally.
The COVID-induced restrictions affected almost all industries in India, including automobiles. But an increase in new vehicle sales is likely to drive lubricant consumption in the automotive industry during 2021-26, according to a report by Mordor Intelligence. Automotive is likely to be the fastest growing end-user category in the Indian lubricants market during 2021-26 at a CAGR of over 6%.
The Indian lubricants market exceeded two billion liters in 2021 and is expected to register a CAGR of over 5% to reach over three billion liters by 2026, according to the report. The automotive lubricants segment forms a large part of the Indian lubricants market.
Shell Lubricants has been present in India for over 100 years. With a retail presence in six states – Karnataka, Tamil Nadu, Telangana, Maharashtra, Gujarat and Assam – the brand aims to expand its service station network across the country and also go beyond lubricants.
“India is one of Shell’s top five markets. We want to be among the top three markets in the world. We have high expectations for our business in India. Our aspiration is to double the business over the next five years,” shares Amit Ghugre, Director – Automotive Sales & Marketing, Shell Lubricants India.
According to a report by Moody’s, India is the third largest market for finished lubricants in the world, behind the United States and China. Major players in the domestic market include Bharat Petroleum Corporation, BP Plc (Castrol), Gulf Oil International, Hindustan Petroleum Corporation and Indian Oil Corporation. Shell remains unleveraged in India. So how does it plan to build its brand in India?
afaq! He spoke to Ghugre to understand the brand’s India expansion plans, product portfolio, marketing initiatives, plans for Tier II/III markets and more.
How important is the two-wheeler segment to Shell?
Two-wheelers are one of the largest segments in the automotive lubricants space, as of now. Shell’s presence is limited, in terms of market share, which is close to 3% volume share. We see a huge opportunity for growth. Let’s double the space on two wheels.
We have the right product portfolio, but what is currently an opportunity for us is awareness and distribution. That is why we have decided to really focus on the two-wheeler segment for our marketing efforts, this year as well.
What are your expansion plans for the Indian market?
India is an important market for us globally. We want to invest heavily in the business.
Our products are developed with a customer-centric approach. Each product addresses a unique need and improves the life, performance and efficiency of your engines. For example, to improve fuel economy, last year we launched Shell Advance Fuel Save.
In B2B, we’re differentiating ourselves with integrated solutions that help our customers lower their total cost of ownership. We are looking to increase our seamless reliability and digital solutions this year. Services such as used oil testing, fluid management and on-site lubrication are part of our core offering today. They all help our customers manage their operations and equipment usage.
Has the brand been able to crack the tier II/III markets in India? What is your approach to these markets?
India is an important market for Shell. We want to be among the top three markets in the world. Due to digital connectivity, Tier-II/III areas of the country are important.
In these markets, the brand is relatively underrepresented. We want to start investing in these markets. That’s why we have to take care of our distribution channels and brand building. These two things need to go hand in hand so we can get the best leverage and ROI for our efforts.
We are more skilled in urban areas. There is a plan to slowly bring it to Tier II/III areas, with the right portfolio, distribution and marketing efforts.
Will your pricing strategy be different in Tier II/III markets, compared to Tier 1 areas?
From now on, there will be no different prices for the same SKUs. In the four-wheeler segment, we have a fairly good brand value and reputation in urban centres.
We are now addressing the portfolio portion to enter Tier II/III markets. Until now, we did not have a convincing offer in a price segment, which is relevant not only for urban centers, but also for some Tier II/III towns. We have just launched a product: Helix HX6 10W-40, at a competitive price.
We have also launched a new grease on the market. Again, this product is competitively priced. They will allow us to enter more stores in India.
Can you tell us about your latest campaign ‘Sapne Honge Apne’?
The brand’s recent survey with the mechanic community revealed that most of them are driven by emotional attributes, such as a brand’s investment in improving their workshop, improving themselves, educating their children, etc. . These aspects of their sociological needs are critical to Shell. relate to them and be a part of their lives in a meaningful way.
We have embarked on a new mechanical community building initiative called “Sapne Honge Apne”. It advances Shell’s commitment to helping mechanics realize their dreams. With the campaign, we also aim to provide a platform for mechanics to allow them to strive for success. It adds to our existing initiatives for this community.
What are some of the initiatives the brand is working on? Can you tell us about the brand’s collaborations to strengthen its marketing efforts in India?
Shell has been a long-term partner of two of the biggest names in the industry globally. In terms of our passenger car segment, we have a long-standing (petroleum) partnership with the Italian luxury sports car manufacturer Ferrari. We advertise and leverage this platform quite effectively, not only in India but also outside.
From the two-wheeler point of view, we have a partnership with the Italian motorcycle manufacturing company Ducati. We are also involved in co-branding investments. MotoGP, the bicycle racing event, now takes place in September. Shell will look to use the opportunity to further push our partnership agenda with Ducati.
The brand also associated with the movie ‘Pathaan’ as the official motor oil partner. We will continue to pursue these opportunities as we become a more aggressive industry.
In February, we also had our first Formula 1 racing event in India.
How do you deal with advertising?
After COVID, we launched two major campaigns that were heavily advertised on TV and digital.
In the lubricants space, the most important advertising channel will continue to be BTL – which is basically installed activations, promotions, branding. But now we are also investing significantly in the ATL space. It will be a combination of PR, digital and mainstream media.
