Reliance Retail Ventures brings 7-Eleven to India after Future exit

Reliance Retail Ventures (RRVL), the country’s largest retailer with over 12,800 active stores, is all set to enter the fast-growing convenience store segment after it struck a crucial franchisee deal with American major 7-Eleven, Inc (SEI).

Days after 7-Eleven’s franchise deal with Future Retail (FRL) fell through, RRVL grabbed the master franchisee for the Dallas-based convenience brand for the India market, paving the way for its foray into the space.

RRVL has already formed a wholly-owned subsidiary - 7-India Convenience Retail - and will be inaugurating the first 7-Eleven store at Mumbai’s Andheri East on Saturday.

According to sources, in line with the emerging trend in the country, the upcoming stores will be larger (at 200 square feet) than the convenience stores usually found at gas stations. With its initial plan to launch back-to-back stores in the Greater Mumbai region, RRVL has the blueprint ready to rapidly expand into other crucial markets, like the National Capital Region (NCR) and Bengaluru, among others.

Isha Ambani, director, RRVL, said in a statement, “At Reliance, we pride ourselves in offering the best to our customers and we are proud to bring 7-Eleven, the globally trusted convenience store, to India. 7-Eleven is among the most iconic global brands in the convenience retail landscape. The new pathways we build together with SEI will offer Indian customers greater convenience and choices within their own neighbourhoods.”

With this deal, 7-Eleven is the latest addition to RRVL’s dozen-odd retail chain brands - including Reliance Fresh, Reliance Trends, and Hamleys that it had acquired in 2019.

Founded in 1927 in Dallas as a small grocery store, 7-Eleven got its current brand name in 1946, when its hours of operation were extended to 7 am and 11 pm. Since then, it has expanded to 77,000 stores, with presence in five continents and 18 countries.

In spite of its attempt to enter India two and a half years ago, the largest convenience store brand had to wait as its erstwhile local partner FRL’s finances dwindled.

Announcing the deal with RRVL, Joe DePinto, president and chief executive officer, 7-Eleven, Inc., said he feels it is an ideal time for the brand’s entry into the India market. “India is the second-largest country in the world and one of the fastest-growing economies. Our strategic relationship with RRVL will bring 7-Eleven’s brand of convenient products and services to millions of Indian consumers, starting in the city of Mumbai,” he said.

If recent activities in the space are any indication, 7-Eleven’s latest attempt could prove to be well-timed. Two of the largest convenience store brands currently operational in India - 24Seven and In & Out - are expanding their presence in uncharted territories.

State-owned Bharat Petroleum, which owns the In & Out convenience chain, has added nearly 139 outlets in 2020-21 - nearly doubling the total number of outlets within a year. Till end-2019-20, it had 150 outlets, of which 120 were in major cities. However, to cash in on the growing interest for convenience stores among consumers, last year a majority of its outlets came up in non-urban areas.

24Seven, a NCR-based convenience chain that Founder and Managing Director Samir Modi had envisaged based on the 7-Eleven model, is in expansion mode. Until 2020, it was present in 100 locations, primarily in NCR. Modi has planned to venture into the Bengaluru market this year with 60 new stores. Further, he also plans to add 80 new outlets on home turf - the NCR market.

In 2005, Modi had set up the first 24Seven store at Lajpat Nagar's Central Market - a popular retail hub in South Delhi - after then chairman of 7-Eleven’s Taiwan business persuaded his late father K K Modi in 2002 to set up a similar venture.

Not everyone has survived in the business. Given the convenience store segment is still quite undersized in India, compared to many South Asian countries like Vietnam, Indonesia, and Taiwan, ventures like RJ Corp’s JMart had to wind up.

According to industry veterans like Modi, it is a tough business. “Just expanding the operating hours does not turn a retailer into a successful convenience chain owner. It requires different skill sets,” he said.

The logistics, operations management, and cash-flow mechanism of a convenience store business is markedly different from regular modern retail stores.

Industry experts said RRVL’s massive network and operations could prove to be helpful, if it runs the convenience business on a separate model from its regular retail business.