The company is keen to capitalise on growth opportunities in the lubricants market and wants to launch new products, target the three-wheeler segment as well as extend its reach into tier 2 and 4 cities.
26 May 2022 | 9417 Views | By Nilesh Wadhwa
Shell Lubricants India, one of India’s oldest lubes players, aims to double its retail footprint in next 3-4 years by strengthening its network, investing additional resources, and enhancing organisational capabilities through digital solutions and channel upskilling programmes.
In an interaction with Autocar Professional, Debanjali Sengupta, Country Head, Shell ...
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Shell Lubricants India, one of India’s oldest lubes players, aims to double its retail footprint in next 3-4 years by strengthening its network, investing additional resources, and enhancing organisational capabilities through digital solutions and channel upskilling programmes.
In an interaction with Autocar Professional, Debanjali Sengupta, Country Head, Shell Lubricants India said, "India is one of Shell’s priority growth markets and the untapped market segments present a great opportunity for us to grow our business. With our current product portfolio and channel reach, we have meaningful presence only in around 50 percent of the market.”
At present, Shell Lubricants India reaches nearly 1,000 customers directly and around 50,000 out of 225,000 customers in automotive segment through its network of distributor partners. While many companies focus on urban markets, Shell which has a strong presence in Tier 1 markets aims to extend its footprint to Tier-2 and 3 markets. The lubricant major wants to “really enforce our area of brand building, network expansion and bring in the right product portfolio”, as Sengupta says adding that her short-term focus is to have a presence in retail counters and also increase digitisation.
“There are alternative channels like e-commerce and doorstep service. There are different ways to reach out to the customers and the market itself is also evolving. The pandemic has brought a change in the customers behaviour. More channels have opened up and we want to be present there,” she said.
While India’s domestic lubricant market in India is now pegged around 2,500KT (kilo tonne) per annum. The global supply chain crisis has created challenges for all industries and players alike. Sengupta said the company’s Bengaluru technology lab is not only working on new product development but also helping create flexibility in the formulations which is enabling a continuity of business or supply security for the customer as well.
Shell Lubricants’ oil blending plant located at Taloja, Maharashtra can produce up to 200 million litres of lubricants per annum. The plant caters to a range of products for both the automotive and industrial sectors. However, some product lines continue to be imported for certain adjacent categories. In terms of flexibility the company says it also utilises manufacturing capacity of third parties. "We believe that flexibility of multiple sourcing approach allows us to serve customers better," Sengupta pointed out.
New launches to help maintain leadership
Despite having a strong position in the Industrial segment, Shell India is not happy resting on its laurels. It plans to "strengthen its position and maintain our market leadership. We have clearly seen opportunities to grow in the consumer sector."
The company is also looking to leverage its India operations for creating new products not just for the local but also global markets. It was in May 2019, that Shell opened its first lubricants laboratory at its Technology Centre in Bengaluru to expand its R&D initiatives for India and globally, as well. Using valuable data analysis and new technologies, the laboratory supports Indian manufacturers and customers across automotive and industrial sectors.
According to Sengupta, in addition to passenger vehicle makers and two-wheeler OEMs, there is huge opportunity in three-wheelers. “For this segment, we are not bringing in our global portfolio, but we are locally making something just for the Indian market and hope to launch something soon in the two- and three- wheeler segment."
For Shell Lubricants, its recently introduced product line-up of fully-synthetic lubricants is part of the company's sustainability drive that aims to help improve fuel economy. Looking across the value chain, it is also exploring ways to lower the carbon intensity. It is also supporting the government's move towards using plastic waste as a chemical feedstock where it has started some work in the area. It is also providing carbon credits that benefit many companies. That apart there is also the solar energy solutions as well the entire portfolio of e-fluids ready for electric vehicles.
Sengupta however, ruled out any immediate plans to launch e-fluids in India. "Shell is waiting for the right immersion fluid and battery cooling liquid in the EV space. When you have big multinational companies in Europe, they've already done it. So we have the products ready and we just have to lift and shift."
Sailing through Covid-19
Sengupta, who took charge as the country head for Shell in India last September, reminisced about the challenges of tackling the crisis. She said that the pandemic was mentally draining and physically exhausting for everyone alike, "What really amazed me is that the power of humanity. The way people stuck together, took care of each other and volunteered to help. That was where you see, you know, humanity really shines. And it just got stronger as the days went by. For the business we expected a sharp V-shaped recovery. While there was some uptick it wasn't a sharp recovery."
Sengupta stated that while the company saw good demand in the industrial segment, the automotive sector saw a mixed response. While the two-wheelers witnessed "amazing resiliency" thanks to the demand for personal mobility and home deliveries of essential, PVs were impacted due to semiconductor shortage, commercial vehicles and industrial segment saw average growth.
In fact, Shell Lubricants India’s operations grew 25 percent in fiscal 2022, albeit a low year-ago base, and rose 12 percent over fiscal 2019. Overall, the company’s performance continues to be strong despite the disruptions that took place over the last 18 months or so. It believes that a pick up in demand and greater awareness of its brand values will enable it to carve a niche for itself.
The feature was published in Autocar Professional's May 15, 2022 issue.