Highway drive: Stopovers such as this one on the Delhi-Mathura highway offer tremendous growth opprotunities for petro companies and allied service providers

Some time in 2007: Kartar Singh left Delhi for Kolkata four hours ago with a soaps consignment. He's covered some 250 km on nh-2's four-laned tarmac, and is about to pull his truck into his favourite fuel station at Shikohabad-the one with the eye-catching orange-and-blue colour scheme, the high mast and the large-format dimensions. Singh's stopped for diesel and he pats the fleet card he's carrying in his shirt pocket (no need for shelling out cash, he grins). At the moment, though, fuel is the last thing on his mind. It's well past midnight, and Singh prefers to catch a few hours of sleep. Before he makes it to the snug resthouse, he will grab his favourite dal makhni at the fuel station's dhaba. There's no need to make any calls-the truck-tracking system fitted in his vehicle will take care of the needful. Life's easier these days, smiles Singh. Oh, but there's still one more important task left to be done before he hits the hay: Singh sidles up to the condom-dispenser in the corner, pops in a few coins and pockets a handful. Kolkata is still a long way away, shrugs Singh.

Also in 2007: Rahul Kumar left Delhi for Mumbai four hours ago in his mint-new sports utility vehicle. He's covered some 360 km on nh-8's four-lane tarmac, and decides to pull in for a quick breather at Mahapura near Jaipur. The fuel-tank still shows half-full, but Kumar is tempted by the flashing neon sign of his favourite pizza outlet. Never thought I'll get it here, grins Kumar. He takes a quick glance around this large-format fuel station and shrugs: This won't be a quick stop after all. Kumar ducks into the cybercafé, shoots off two mails-one to his boss in Delhi (it's never too late to plead for leave!) and another to his girlfriend in Mumbai (I'm on my way)-stumbles into the ATM (more cash never hurt anybody), and just for kicks does a round of the hypermarket. His car meantime is parked at the service centre, where the men in overalls are checking the oil levels (should have done that in Delhi itself, Kumar admonishes himself). That done, Kumar, armed with chocolate bars and cookies, prepares for the next leg of his journey. Oh, but there's still one more important task left to be done before he steps on the gas: Kumar sidles up into the pharmacy, and exchanges a few notes for a pack of his favourite ribbed "extra-safe" rubbers. They're the best, smiles Kumar.

If these two scenarios sound like a flight of fancy, well, here are two huge reasons why hypermarkets on the highway, email on the expressway and fun on the freeway are just a few milestones away: One, the upgrading of the 5,846 km of national highway connecting the four metros, known as the Golden Quadrilateral. Two, the creation of the north-south (Srinagar to Kanyakumari) and east-west (Silchar to Porbander) corridors, over 7,300 km. The equation is simple: More and wider (four- and six-lane) roads mean more traffic, which in turn means more growth-not just for petro-products, but for a host of allied services like servicing (of cars and trucks) to fast food, from large-format restaurants to any-time money, from motels to supermarkets, from cybercafés to motels. "In two-to-three years, there will be a huge opportunity as we expect close to 30 per cent growth in traffic along these highways," explains N.G. Kannan, Director (Marketing), Indian Oil Corporation, who plans to add 300-400 outlets every year on the highways, at a cost of Rs 360-530 crore.

Besides IOC, private oil retailers like Reliance and Essar are also finalising plans to drop anchor on highways. Essar Oil, for instance, plans to put up 120-150 stations on the national highway. However, what's easily more exciting than the oil majors' strategies are the ambitions of allied service providers, not just for truckers but also for well-heeled city-slickers zipping from one metro to another in SUVs and sedans. Here's a run through: McDonald's, which owns three highway outlets, is planning a fourth, on the Delhi-Chandigarh stretch; Domino's Pizza would like 15 outlets on highways in five years; and Café Coffee Day, which opened its first highway café on the Bangalore-Mysore section in June, is targeting Bangalore-Chennai, Delhi-Chandigarh, Delhi-Jaipur, Delhi-Agra and Mumbai-Pune.

Tapping a growing market: A pit stop on the Mumbai-Pune expressway offers more than oil tank refills

The Expressway boom: Oil retailers are entering into strategic tie-ups with value-added service providers

It's not just about F&B. Apollo is working on a strategy to build its pharmacy chain/retail network along the highways, for which Chairman Dr. Pratap C. Reddy is in the process of tying up with oil companies and motel chains. The Days Inn hotel chain plans to set up smaller hotels under 40 rooms branded Crystal Inn (which could be between towns separated by six hours), and the Tatas' indiOne "Smart Basics" hotel concept for secondary and tertiary markets will also include motels. And banks like ICICI Bank, HDFC Bank and GTB are working out the threshold at which ATMs along the highway make economic sense.

Clearly, most of these services-barring motels perhaps-will have retail oil outlets as their hubs. That's why PSU oil head honchos like Kannan expect non-fuel revenues to account for 20 per cent of sales in three years, as against 2-3 per cent today. What's more, gross margins from non-fuel operations can be as high as 65 per cent. That's why petroleum retailers are frenetically tying up with value-added service providers. HPCL, for instance, has alliances with US Pizza and Dairy Den ice cream, and is close to finalising a deal for Amul-branded outlets. IOC has tied up with Hyundai, SBI, Citibank and BSNL, and has also got into an arrangement with the Bill & Melinda Gates Foundation (for aids awareness) for dispensing condoms-100 of IOC's 6,000-odd highway outlets have been covered so far. IOC will have some 1,000 outlets branded XTRA with an orange-and-blue colour scheme, 65 per cent of which will be on the highways.

Although most outlets today focus on the transport segment-66 per cent of retail diesel is consumed by trucks-that scenario will change. Rajiv Dube, VP (Commercial), Tata Motors, points out: "Our focus today is relatively more on CVS, but as outdoor driving evolves-it could take three-to-five years-and more SUVs and sports cars are sold, amenities on highways will have to keep pace. After all, you can't drive a sports car in the city, right?"

"In two-to-three years, there will be 30 per cent growth in traffic along the highways" N.G. Kannan/Director (Marketing)/Indian Oil Corporation

That's exactly why fuel stations are attempting to create huge formats complete with food courts, party zones, recreational facilities for kids and swimming pools. "Consumers have changed. They are looking for quality food and ambience, which established players, not dhabas, can give," explains Vikram Bakshi, Managing Director, Connaught Plaza Restaurants, the Northern India franchisee for McDonald's. The parent company wasn't too keen on an outlet on the highway, as in developed countries only 5 per cent of moving traffic stops for a bite. But once the 170-seater Mathura outlet opened, that figure was as high as 18 per cent.

Location, surely, matters most. Nirula's, the Rs 100-crore Delhi-based fast food chain, is identifying stretches where a minimum 15,000-20,000 vehicles will pass per day. Business from nearby towns will be a bonus, says Vikas Attri, Technical Advisor. "Highway locations work best at the periphery of a town-McDonald's at Mathura or Panipat for Nirula's. Highway stores get a larger group size, so you get a bigger average bill. But you also need a larger seating area," adds Attri. Which is why McDonald's Bakshi says the capex on a highway outlet is 1.5 times that of a normal outlet. "Because you should have a large area, big signage and car parking (at least for 70-plus cars, buses etc). The building should be big so that it creates an impression. Big and clean functioning toilets also matter." The road ahead for the Indian traveller will soon be paved with convenience, choice and comfort.

-additional reporting by Nitya Varadarajan, Sahad P.V., and E. Kumar Sharma