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Executive column: Shell goes digital to cater to Indonesia’s growing retail demand
Wahyu Indrawanto (Shell)As part of its business strategy to answer the growing demand in the retail market, Shell Indonesia, the local subsidiary of global energy giant Royal Dutch Shell, has started to ride the digitization wave
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Wahyu Indrawanto (Shell)
As part of its business strategy to answer the growing demand in the retail market, Shell Indonesia, the local subsidiary of global energy giant Royal Dutch Shell, has started to ride the digitization wave. It offers digital transactions at its gas stations across Indonesia with the Shell Fleet Card (SFC), which uses technology supported by real-time data. Shell Indonesia director and retail cluster general manager, Wahyu Indrawanto, shared insights into the company’s digital innovation with The Jakarta Post’s Stefanno Reinard Sulaiman in Jakarta recently. Below is an excerpt from the interview.
Question: How does Shell view the prospects of the retail sector in Indonesia?
Answer: In major cities in Indonesia, mobility is very high and dense traffic is also everywhere. This will cost us a lot of time on the road. Therefore, we want our gas stations to be convenient, like an oasis that can freshen up [our customers].
We see that there are two kinds of customers at gas stations. The first one is the vehicle itself, which needs high quality fuels and lubricants. The second one is the driver [or passenger], who needs good facilities, such as clean rest rooms and places to pray. Basically, this means gas stations are a good place to rest. We call our services for both vehicles and people an integrated offer on fuels and non-fuels.
Where did the idea for the SFC come from?
It came from both parties; our company and our customers. In Europe, they have used it [SFC] for years. It has been proven to help control fuel budgets and reduce the hassle of reporting. At the same time, our market research for SFC implementation in Indonesia shows that the demand [for efficient transactions] already exists.
The SFC provides a business solution for companies, whether they be small and medium enterprises [SMEs], institutions or big firms. Probably, the highlight of the card’s benefits is making the handling of fuel budgets more efficient.
We launched it [SFC] in March 2017. It has post-paid and pre-paid schemes. The card has a chip and a personal identification number as a security measure. It can be utilized at any of our gas stations in the country [that now number 80 in Greater Jakarta, Bandung in West Java and North Sumatra].
What kind of companies are the major users of the SFC?
We started [the SFC] only a year ago. Until now, 200 companies have come onboard, some of which use it for their operational cars. Those are small and medium-sized companies. Several big companies are in the pipeline. We classify them as those who are “still in approach” and “in negotiations”.
One example of a company that uses our SFC service is PT Wartsila Indonesia [Finland-based energy firm], which told us that its fuel budget costs had been reduced by around 50 percent.
We are still in the process of building awareness and penetrating the market, in which we directly approach each customers’ office. Our potential customers are the companies that operate a lot of vehicles, or maybe those in the transportation business, such as taxi or logistics firms.
Currently, business-to-business [B2B] customers [which include the 200 companies] probably account for only 10 percent of our total sales, but it could grow as either other companies have yet to join or we still consider them as private customers.
What other benefits do you offer your customers?
For private customers, we have the Club Smart card, which can give you points for any purchases of fuel, lubricants or deli2go [Shell’s convenience store] products. The card also covers accident insurance, and our analysis has found that around 80 percent of traffic accidents are motorcycle-related. For car owners, we offer not only accident insurance, but a towing service as well.
As it is a cashless technology, it omits the hassles for drivers or employees when collecting fuel purchase receipts to be reimbursed by their employers. With this card, detailed transaction information will be directly sent to employers. This includes many kinds of information, like the amount of fuel, the gas station locations and so on.
The card also has odometer technology that basically gives accurate data on how much fuel a car has used for a certain amount of kilometers. Hence, it will show an irregularity if a car consumes more than it usually does.
Besides that, the company can freeze the transactions for a designated period, such as during the holiday season. It can lock the period of usage and also the location of gas stations that their card holders can use. The locking feature can be set for a different kinds of fuel expenditure, depending on the card holders’ position in the company.
