Kishore Biyani Brings World’s Largest Convenience Store Chain 7-Eleven To India
7-Eleven Inc., the world’s largest convenience store chain, entered India in partnership with Kishore Biyani’s Future Group as it looks to tap shoppers in the fastest-growing major economy.
Future Retail Ltd. signed a master franchise agreement with the Japanese-owned, U.S.-based chain to set up small-format stores, the Indian company said in an exchange filing. The first 7-Eleven, similar to kirana or neighbourhood outlets in India, is expected to open this year itself.
7-Eleven, which has more than 67,000 stores worldwide, is foraying into India as the goods and services tax has increased the pace of formalisation of the economy. And the nation’s retail market, according to a report by Assocham and MRRSIndia.com, is expected to grow from around $672 billion in 2016 to $1.1 trillion by 2020.
“7-Eleven, Inc. is among the most iconic global brands in the food retail landscape,” Biyani, founder and chief executive officer of Future Group, said in a statement accompanying the exchange filing.
We are proud to bring this globally trusted convenience store to India and build new pathways together that will offer Indian customers greater convenience and choices, within their own neighbourhood.Kishore Biyani, CEO, Future Group
7-Eleven said it will support Future Retail to implement and localise its unique business model. “This strategic relationship offers an excellent opportunity to bring 7-Eleven's brand of convenience and its iconic products to the Indian consumer,” Ken Wakabayashi, senior vice president and head of international business at 7-Eleven, said in the statement.
Future Retail, with yearly sales of Rs 18,478 crore, aims to become the next neighbourhood kiranawala. It currently gets 85 percent of its revenue from large-format stores like Big Bazaar and the rest from smaller outlets. The company has 1,050 such Easyday, Heritage and WH Smith stores in 312 cities.
The 7-Eleven Model
7-Eleven stores overseas remain open 24x7, a format gaining momentum in India. They will increase the convenience for Indian shoppers amid growing incomes and consumption.
Customers are willing to pay more for the convenience of getting services in the night, Alpana Parida, managing director at brand consultant DY Works, said. “7-Eleven will solve the problem of customers’ immediate need, which even online grocers don’t solve as it takes at least an hour or two even to deliver goods to your doorstep.”
“Convenience stores already exist in the country and are open 24x7 but these [7-Eleven] stores will offer customers the convenience of even paying either by debit or credit card,” Dhanraj Bhagat, retail partner at consultancy Grant Thornton India, told BloombergQuint. That, he said, is usually not the case with the neighbourhood kiranawalas.
Harish Bijoor, owner of Harish Bijoor Consultants Inc., expects 7-Eleven to find it easier to expand in India, benefiting from Future Group’s distribution and logistics.
“Fundamentally, stores in tier 2 cities are nifty economically, because a small-format outlet has got high footfalls and it becomes a common grocer outlet in the neighbourhood,” Bijoor said. 7-Eleven format stores have the ability to percolate into smaller towns as well as the distance between each store will be approximately a kilometre, unlike hypermarkets, which are present at a distance of six to eight kilometres.
Watch the entire conversation with Kishore Biyani: