A differentiated offer in Mexico’s fuel retail sectorJune 16, 2022
Juan Carlos Paredes, general director of Petro Seven, talks to The Energy Year about the changing dynamics of Mexico’s fuel retail sector, the company’s offer of a complete shopping experience and its vision of becoming the country’s best fuel company. Petro Seven is a fuel retailer that operates in Mexico as one of the brands of ICONN, a Mexican company that also manages 7-Eleven convenience stores.
How have the fuel retail sector dynamics in Mexico changed in recent years?
Mexico is a very dynamic market that has significantly evolved over recent years. Since the energy reform, we have seen the rapid transition from a closed market, with a single brand, towards an open one propelled by the private sector. The value proposition for consumers has evolved given the presence of most of the global fuels players, who have seen in Mexico an attractive market. The size of the market, the proximity the country has to the Gulf and the projected consumption growth for the next 20 years have been key to attracting oil major brands.
The fact that large global companies had the confidence to invest in Mexico has meant that the value proposition has evolved faster than in other countries. Some elements that we have implemented in Petro Seven such as loyalty programmes, fleet cards, digital payment options and technological processes have given results earlier than in other geographies. There has been a process of creating new options and alternatives, but there’s still a lot to come. Thus, the retail trade sector in Mexico has become a more active and fast-moving sector.
We are proud to be the second-largest fuel retail company in the country with more than 250 service stations directly operated by more than 2,600 employees. We offer a superior shopping experience through efficient, safe and high-quality service, focused always on our daily commitment to Mexican society. Internally, we ensure that these more than 2,600 employees have the optimal working conditions to perform their tasks and continue making life easier for each client who visits our service stations.
To what extent has the pandemic compelled Petro Seven to bet on technology and innovation?
The pandemic has impacted all markets and businesses, and the fuel industry was not an exception. As we are considered an essential business, our top priority has always been to look out for the safety and well-being of our staff and clients. Our first move was to make sure that our staff, especially those who are considered a vulnerable population, had the necessary measures to guarantee their health. We managed to provide job stability since there was no staff reduction, as taking care of our people was paramount.
During the pandemic, mobility in Mexico was reduced by about 70% at the most critical moments, such as the beginning of the second quarter of 2020. It has been recovering, but some things have changed radically, such as the way of working. We believe that it will not recover completely, our consumer has evolved, and we have too to adapt to their needs.
We have innovated in the sector by adding solutions to our value proposition, making life easier for the customers who visit our service stations. In this sense, we have made several investments in technology solutions for our consumers. This investment in technology has allowed us to receive contactless payment options. In this way, today we are the only fuel company in Mexico certified to receive payments through Apple Pay.
For us, this achievement is important since we are constantly searching for innovative options that are safe and comfortable for our clients. In every single service station of our network, you just need to hold the credit or debit card above the terminal or activate the wallet app and hold your smartphone near it, and the payment is made quickly and safely.
Over recent years we have invested more than USD 12 million in technology and interconnectivity, which allowed improvements in our technology platform. We will continue with these investments to take the shopping experience to the next level. Everything needs to be updated because we must ensure that the transactions are adequate to the changing environment which our clients are in.
To what extent does technology allow you to track the sales habits of your customers?
In ICONN, we are committed to facilitating the life of our consumers. We are looking to differentiate ourselves, and we believe that our competitive advantage as a company is our deep understanding and knowledge of Mexican consumers’ insights. Our goal will always be to prioritise the consumer’s preference by offering a unique shopping experience through our Petro Seven service stations network, along with the more than 1,900 7-Eleven convenience stores in Mexico.
The market is recovering, and we must take precautions, consistently monitoring what is happening in other regions and capitalising on the advantage of having this global operation facilitated through the 7-Eleven system. That is a strength of our group, especially in Mexico, because it allows us to anticipate market trends and bring high-end technology solutions for our customers.
Given the current scenario, what strategies is Petro Seven taking to grow and consolidate its position?
We strongly believe in our country; we want to bring our differentiated offer to more customers in Mexico and support more jobs in the country. The pandemic was a tough period for the economy, and that forced the industry to rethink growth and metrics. However, our vision goes beyond a number. It is a matter of being able to bring our value proposition to more consumers. We have a consumer-oriented model complemented by 7-Eleven. We have a vision of becoming the best fuel company in Mexico with an integrated convenience store. We are venturing into the B2B segment, expanding our coverage to attend to industry needs. There is an opportunity to supply services, adding value to the operation, and increasing support for the companies. This is part of Petro Seven’s evolution process. We keep evaluating business opportunities all the time.
Do you see the immediate potential for electric cars and autogas in Mexico?
It is a fact that this shift is going to happen, and we are constantly evaluating its progress. Due to the current global situation, this probably isn’t the right moment to do it intensively, but it is indeed something that we are pondering. We are aware of these trends, and we will be there when the time is right.
What growth projections does the company have for 2022?
2020 and 2021 were years of survival and resilience. In 2022, we are prepared to return to the growth path and show our strength. It is a cycle where we effectively trust in our abilities to excel once mobility starts recovering and the demand increases. We rely completely on the purchase experience, offering great service and high-quality products to be our customer’s first option.
We are looking at 2022 and 2023 with great optimism. The fundamental conditions of the country remain: the economy is thriving, and there is continuity in developing opportunities. We are certain that Mexico will continue hosting development projects such as road construction, which still has an enormous potential. In addition, the young population in Mexico is increasing its consumption power, not only in fuel but in convenience services.
We are sure that the best is yet to come. We are committed to continuing to grow together with the country. In 2023, ICONN celebrates its first 100 years of operations, which fills us with enthusiasm to continue working day by day delivering the best services and products to our clients.
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