This article was first published in the April 2016 issue of WIRED magazine. Be the first to read WIRED's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online. For more stories from WIRED's China issue, click here.
Guang Xiao is using smartphones to turn thousands of independent petrol stations into a single brand. "The petrol-station business in China is 20 years behind the west," he says. "In the US, there are loyalty programmes, easy payments, retailing. We want to help independent station owners do what they're not good at."
PetroChina and Sinopec own half the market, but 40 per cent of fuel stations are mom-and-pop operations. So Xiao, 33, is networking them via his AutoGo app. "It's not easy for them to build loyalty programmes or do marketing at scale," he says. "We're building that brand. We build loyalty with the customers, expand the offering. Just four per cent of their revenue is from retail, compared with 50 per cent in the US."
Xiao, a former Stanford student, worked for Shell in Beijing and Malaysia when he saw the opportunity. "I was inspired by Fleetcor, a US company which provides third-party fleet management, signs up gas-station owners and gives discounts to fleets. But what's different about China is the sudden impact of mobile. It grew 500 per cent in the past five years. My asset-light model is especially powerful for businesses that are fragmented."
AutoGo's app launched in April 2015; within five months it had a million users. By April 2016, the parent company, Chedao, expects to be in all 35 Chinese cities with more than one million cars, representing 27 per cent of independent petrol stations.
Stations sign up for free and are then educated about improving service. Customers pay for fuel in the app, loyalty discounts can be targeted, and retail offers appear on phone screens. "There have been no physical branding changes at the pumps, but instead a mindset change," he says.
This article was originally published by WIRED UK
