NEW DELHI -- India is set to get its first 7-Eleven store as the retail arm of Reliance Industries has finalized a franchise agreement with the Japanese 24/7 convenience store.
The development comes two days after Future Retail announced the end of a 2019 deal with 7-Eleven Inc. over disagreements regarding the target for opening stores in India and franchise payments.
Japan's retail giant Seven & i Holdings mainly operates overseas' convenience stores through its U.S.-based subsidiary 7-Eleven Inc.
Seven "aims to enhance the value of 7-Eleven as a global brand by leveraging the strengths of 7-Eleven in Japan and the U.S., and building a sophisticated value chain," said Ryuichi Isaka, president of Seven & i Holdings in a news conference on Thursday, adding that opening the first store in India is "part of its global strategy."
The Japanese company plans to open several more stores in India within the year and will launch more next year, Isaka said.
In a statement on Thursday, Reliance Retail Ventures (RRVL) said the first 7-Eleven store in India will open on Saturday in the financial center of Mumbai, with more scheduled in key areas across the metro area. The move is expected to raise local employment and build an ecosystem for convenience foods, it added.
Describing 7-Eleven as one of "the most iconic global brands in the convenience retail landscape," RRVL Director Isha Ambani said, "The new pathways we build together with SEI will offer Indian customers greater convenience and choices within their own neighborhoods."
Noting that India is the second-largest country in the world and has one of the fastest-growing economies, SEI President and CEO Joe DePinto said, "It's an ideal time for the largest convenience retailer in the world to make our entry into India."
Texas-based 7-Eleven Inc., or SEI, has 77,000 franchises or licensed outlets in 18 countries and regions, including 16,000 in North America.
"Our strategic relationship with Reliance Retail Ventures will bring 7-Eleven's brand of convenient products and services to millions of Indian consumers starting in the city of Mumbai," DePinto said.
RRVL, a subsidiary of Reliance Industries and holding company of all retail companies under the group, reported a consolidated turnover of $21.6 billion and net profit of $750 million for the year ended March this year.
Analysts, meanwhile, see the move as a positive development for the convenience stores segment in India.
Although India has many kirana, or small neighborhood stores, no company has yet seen modern convenience stores take off in India, according to Arvind Singhal, chairman of retail consultancy Technopak Advisors. "Now, modernization will start to take place with the Reliance-7-Eleven [deal]."
"It is a very good move [and will encourage] other companies to look into this format," he told Nikkei Asia, pointing out that the first store -- opening in just two days -- means they had been working on it for at least a year.
"I was a bit surprised when the deal was signed with the Future Group, because already the company was in distress," he added. "With Reliance, [the U.S. chain] can literally put up hundreds of 7-Eleven stores in a very short period of time. And the good part is Reliance already has supply chains for many of the products sold by these convenience stores."
Reliance Retail last year agreed to buy Future Group's retail assets. But the deal has been challenged by Amazon, which has invested in one of the Future Group entities.
Additional reporting by Rurika Imahashi in Tokyo