LTN Economic Express" conquered the world's retail kings but capsized in India?

7-Eleven has stores in many countries, but it has failed hard in India. (AFP)

7-Eleven once had up to 60 branches in India

[Financial Channel/Comprehensive Report] Japan's Seven & i Holdings, which owns the global convenience store chain 7-Eleven, said it had closed its stores in India operated by Reliance Retail at the end of September. Retail), 7&I Holdings signed a five-year licensing contract with Reliance Retail in 2021. In October of the same year, it opened the first 7-Eleven store in Mumbai. By the end of 2025, the number of stores was once about 6 0 stores, but now it has failed miserably. The two parties will end the five-year franchise cooperation relationship. Although 7-Eleven has stores in many countries, it has been severely criticized in India, which arouses the curiosity of the outside world. Why can't 7-Eleven continue to operate in India?

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Indian media "The Economic Times" reported that of the nearly 60 7-Eleven stores cooperating with 7&I Holdings and Reliance Retail, most will be closed, and some stores are clearing inventory before closing. People familiar with the matter said 7-Eleven may look for another Indian company to cooperate to maintain its foothold in the local market, but no decision has been made yet.

Regarding its Indian business, 7-Eleven said: "In order to promote business development from a long-term perspective, we will study various options."

According to the financial statements, 7-Eleven in India had revenue of approximately 920 million Indian rupees (approximately NT$302 million) and a net loss of nearly 900 million Indian rupees (approximately NT$296 million) in the fiscal year ending in March 2026. It can be said to be a serious loss and almost no money.

7&I Holdings signed a five-year licensing contract with India's Reliance Retail (pictured) in 2021 to open 7-Eleven stores in India, but now it has failed miserably. (Reuters)

Small grocery stores account for 88% of India’s retail market

But why can’t 7-Eleven succeed in India? The outside world has pointed out the particularity of the Indian retail market, which is the small traditional grocery store "Kirana" that can be seen everywhere in the streets. Whether it is on the busy streets of big cities, or in the narrowest alleys of slums, or even in hard-to-reach rural areas, Kirana can be seen. The industry estimates that there are more than 20 million Kirana stores in India, accounting for 88% of the physical retail market in India.

Kirana sells everything from clothing, shoes and hats to groceries and electronic products. Ambit Capital estimates that most food retail in India occurs in small and medium-sized Kirana, with a market share of 75% to 78%. Each Kirana usually has a strong fixed customer base in the community where it is located. Home delivery and phone orders are common phenomena, and it is usually open from early morning to late at night.

Devangshu Dutta, founder and CEO of consumer industry consulting firm Third Eyesight, said that Kirana's operating costs are much lower than those of convenience stores operated by companies, and its profit margin requirements are also different. Therefore, Reliance's exit may mean that the Indian industry will rethink whether this format is suitable for the market, especially when express commerce has become a strong alternative.

Beny Sachdeva, assistant editor of Franchise India Media, a well-known franchise startup platform in India Sachdeva) pointed out that 7-Eleven is only deployed in two major Indian cities, Mumbai and Pune. This is in line with 7-Eleven's past business model, which is to enter urban street corners with high traffic flow and strategic locations. However, in major Indian cities, these locations are among the most expensive to rent in the country. For a supermarket selling coffee, snacks and impulse consumer goods, the profit of each transaction is very thin, and high rents may eat up all these profits.

Small traditional grocery stores "Kirana" can be found everywhere on the streets of India. Industry estimates indicate that there are more than 20 million Kirana stores in India, accounting for 88% of the Indian physical retail market. (Reuters)

Traditional grocery stores can provide credit and door-to-door delivery

Furthermore, in the five years that 7-Eleven has been in India, it has never left the two cities of Mumbai and Pune, and these two markets are among the most expensive markets in India. Choosing these locations may not be the right decision at all, and paying high rents for people who will never appear at all is a way for companies to lose money quickly.

Sachdeva further pointed out that the convenience store model is based on consumers who are "willing to pay extra for speed and convenient distance." But in India, Kirana is available everywhere. This type of consumer has long been accustomed to spending money at Kirana, and Kirana can also provide services such as credit accounts and door-to-door delivery, and the prices of goods are cheaper than supermarkets. Sachdeva described: "If 7-Eleven comes to India for a group of customers that actually don't exist, then nothing can save it." She described it as a cost structure that was not working from the beginning.

On the other hand, there is the booming development of just-in-time retail companies, which can quickly deliver the same snacks, groceries and daily necessities to consumers' doorsteps within an hour.

Dutta pointed out: "Reliance hopes to reach consumers through all channels, but after the COVID-19 epidemic, convenience stores are facing increasing pressure from instant retail, because both formats offer similar product mix and meet consumers' immediate needs."

In India, after the COVID-19 epidemic, instant retail companies have flourished, focusing on quickly delivering goods to consumers' doorsteps. The picture shows an advertisement for Indian e-commerce platform Blinkit, which focuses on home delivery in as fast as 10 minutes. (Reuters)

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