Shell in Ecuador: “Our goal is to have 100 stations in five years”
We speak to Fernando Suraty, Marketing Manager at EnergyLíder, licensee of Shell in Ecuador, about the strategy behind Shell’s return after 15 years, its plans to expand services beyond fuels and the impact the comeback will have on customers.
After a 15-year absence, the Shell brand returned to Ecuador building on the success of its licensing model throughout Latin America. The company has partnered with EnergyLíder, a local fuel marketer that operates a network of 30 sites, and is currently in the early stages of rollout. PetrolPlaza talks to Fernando Suraty, Marketing Manager at EnergyLíder, about the potential for the brand in the Ecuadorian market, diversifying services beyond fueling and customer reception of this comeback.
Today there are 17 players that dominate the 1,200 sites that make up Ecuador’s fuel retail market, according to a report by El Universo. Shell aims to create a network of 100 stations in its first five years and leverage the transformation of the sector to expand its retail proposal. An ambitious target that Fernando Suraty is confident they can meet, and even surpass.
Q. How did the process of bringing back the Shell brand to Ecuador after 15 years begin?
A. Through a number of assets, Shell was present in Ecuador up until 2007 and it even operated some of them directly. When EnergyLíder began to think about becoming a marketer, it was faced with its first major decision – which brand are we going to offer our consumers? We started an evaluation process with the help of consultants from the U.S. due to our partnership with NACS. And we decided to offer the Ecuadorian market a brand that is above anything they had.
When Shell and other international firms decided to leave the country, in similar fashion to other Latin regions, the number of regional and local brands grew. Today we have large regional and local competitors that have been doing a great job for many years, but we didn’t have one with the size and know-how that Shell embodies. We leveraged our relationship with NACS to make contact and approach Shell about the licensing model that other countries had implemented. Our experience, market presence and our continued work made this licensing contract a reality. It is no longer a dream of ours - it became real a year ago when we began our rebranding process.
Q. The brand also returned to Colombia recently. What opportunities does the Latin American market offer Shell?
A. Shell's interest in our markets is due to the gigantic evolution over the last 15 years; in the fuel market but also in retail and other related services. Shell has developed a leading company at a global level, constantly developing new businesses, ideas and proposals, and markets such as Ecuador and Colombia offer many opportunities.
Ecuadorian customers are tech-savvy and pay attention to what’s happening abroad. They are open to new, disruptive things. That is the opportunity we saw thanks to this partnership with Shell – the market is hungry, it needs innovation and new proposals.
Q. What was EnergyLíder's proposal to Shell?
A. The goal of this alliance is to take advantage of two great opportunities – everything that Shell can contribute to us as a brand and the knowledge we have of the local market. We can combine what our market is willing to do with the great portfolio of a brand like Shell. Fifteen years ago, the main focus of this business was fuel; recently we have developed new services that make the most of the time spent by customers at stations.
Our proposal involves service stations that offer well-known food brands, pharmacies and coffee shops through the Shell Select convenience stores. Convenience plays a very important role but turning our sites into destinations is the differentiating factor. They are starting to become the DNA of what we can offer customers. We are already executing two different store formats under our Shell Select brand. The first is a grab-n-go concept and the second is the Shell Select Fresh Point, a co-branding for stores of up to 500 square meters. In this format we have incorporated automated ordering, a complete made-to-order food menu and partnerships with important brands. With this more robust offering we want the customer to come back – not only visit us in the morning for a fresh coffee but also coming at lunchtime as well.
This format is also accompanied by the first proposal of a boutique wine store. Fifteen years ago in the Ecuadorian market, nobody would have thought of buying a bottle of wine at a gas station. But this is part of the transformation. In a world where change is constant and we want to go out less, spend less time in one place or get a bull basket with one payment, it’s our opportunity to offer that experience to the customer.
Q. How did the pandemic impact the deployment of the brand? What’s the current situation of the market?
A. The common denominator of the pandemic in all our markets was the same. It was a difficult period where businesses paused. We understood that as a company we needed to transform in order to stay relevant. At that time, we had a six-month plan with our convenience store business unit to enter delivery platforms. In the end, we had to do it in three weeks understanding that we no longer had to rely on customers being at the store.
We are now in full recovery process. We expect to close 2022 with better results that we had planned for in 2019. We are still in the rebranding stage with 15 Shell-branded sites and are working to incorporate independent distributors. We already have our first four. Fuel prices have increased by 20% since the Shell brand entered the market; that has boosted the interest from dealers to join us.
Q. What’s the potential for alternative fuels in Ecuador's energy market?
A. It’s a trend that’s just beginning and there are a lot of factors involved. Our great advantage is that Shell is a world leader in mobility. The firm is 15 years ahead in development so when the market needs to adjust to alternative fuels EnergyLíder will have a wide range of options to implement, be it EV chargers or hydrogen refueling.
Shell's DNA is based on change. A firm that’s been in constant evolution for more than 100 years and calls itself a mobility company understands that fossil fuels are not going to be around forever and that we’ll have to adjust to what markets state as the new realities. I am sure that the process in South America in general will be a little slower, we have a different starting point than Europe and the United States, but that does not mean it will not happen. We have to be ready to become part of that change.
Q. What does the rest of 2022 hold for EnergyLíder and what are your plans for the future?
A. Internally, we called 2022 the year of transformation – organizational, rebranding and customer relationship. We planned to end 2022 with 30 rebranded stations but it will probably be more thanks to the incorporation of distributors. By the end of the year we will have six convenience stores operating in Guayaquil and Quito. Two of them will be Shell Select Fresh Points and the rest of the standard format. In 2023, the transformation continues by rebranding our remaining 20 convenience stores. Our first goal is to have 100 stations at the end of the first five years. I see it as completely possible.
