Eleven years after he founded India’s first round-the-clock convenience store company—Twenty Four Seven Convenience Stores—Samir Modi, the youngest son of industrialist Krishan Kumar Modi, is setting himself an audacious target that he believes is “the future”.
Modi wants to set up 10,000 Twenty Four Seven stores across the country—generating retail sales of about Rs55,000 crore a year (average Rs1.5 lakh sales per store per day)—in five years. This is a huge jump from just 49 stores (43 in the National Capital Region and six in Chandigarh) that the company operates at present.
But the target is achievable, said Modi. Most of the stores will be franchised—a new format that Modi is getting into. So far, the company only operated company-owned and managed outlets. Besides, the company already has an agreement with India’s largest fuel retailing chain Indian Oil Corp. Ltd (IOC) to open smaller stores at its petrol filling stations. IOC has about 24,000 petrol filling stations across the country.
“Even if we manage to open convenience stores at a fourth (or fifth) of IOC outlets, that would make the target of 10,000 stores achievable,” said Modi. Stores at fuel-filling stations are smaller—about 500 sq. ft—unlike the ones at high streets, which are spread over 1,000-2,000 sq. ft.
Over the next five years, Modi said, the company will require to invest about Rs2,000 crore in Twenty Four Seven, as he is getting into cost-and-revenue sharing franchising model for fast expansion of his convenience store chain.
Up until now, round-the-clock shopping wasn’t permissible in India as government regulations did not allow shops to be open 24x7. It was only in March this year that the Delhi government permitted shops to stay open round-the-clock.
According to Modi, there is demand for round-the-clock shopping, be it in emergency or a hop-in option or for impulse shopping, primarily because of the rise in double-income households, busy professionals and youth seeking instant gratification.
However, Twenty Four Seven’s rival is In & Out, a convenience store chain managed by state-owned Bharat Petroleum Corp. Ltd that operates more than 12,000 fuel filling stations. It runs 157 convenience In & Out stores.
“A retail business built around convenience stores is a good business model. No company has a national presence in convenience stores and Twenty Four Seven is primarily present in the National Capital Region. Over the past decade, it has understood the business and replicating the 7-Eleven model should work. But it needs to capture markets faster than anyone else does,” said Mumbai-based equity analyst Sachin Bobade.
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