Why Japan’s 7-Eleven closing in India is not a sign of withdrawal

Japanese convenience store chain 7-Eleven’s second attempt to enter the Indian retail market through the franchise model may have failed, but the company has no intention of letting go of its ambitions to establish a presence in one of the world’s most populous countries.

Reliance Retail, the master franchise operator of 7-Eleven stores, closed all 31 stores across India at the end of September, a spokesperson for the Japanese company told CNBC in an email. Reliance Retail is owned by Indian billionaire Mukesh Ambani. Reliance Industries.

A 7-Eleven representative said the company remains committed to serving customers in India and “looks forward to exploring several options to grow our presence in the market in the long term.”

A spokesperson declined to comment further on Reliance’s business decisions or the status of agreements between the Japanese and Indian companies.

Reliance Retail did not immediately respond to CNBC’s emailed request for comment.

The two companies had announced their partnership in 2021, following the end of a deal between the Japanese company and another Indian company, Future Retail. At the time, Future Retail said in a regulatory disclosure document that the termination was mutual because it was “unable to meet its goals of opening stores and paying franchise fees.”

Analysts told CNBC that 7-Eleven’s store closures signal a reset of its operations in India rather than an exit, especially as rival Japanese chain Lawson also plans to expand into the country.

Saurabh Balaria, a partner at consulting firm Grant Thornton Bharat, told CNBC that the closures do not mean “7-Eleven is giving up on India.” “It appears that current franchise agreements need to be reconsidered, especially given the losses in the existing model,” he added.

7-India Convenience Retail, a wholly-owned subsidiary of Reliance Retail that entered into a master franchise agreement with 7-Eleven in 2021, reported a net loss of nearly 900 million rupees ($9.3 million) on revenue of about 920 million rupees for the year ended March 2026. According to Tracxn data, the company’s losses have continued to widen from Rs 52 million in the financial year ended March 2022.

Experts say creating a compelling reason to visit a convenience store is a big challenge for small shops in India. While big-box stores offer experiential shopping with low prices and a wide selection of products, small stores with limited inventory struggle to compete.

Meanwhile, grocery apps that deliver food within 10 minutes are growing in popularity due to their wide selection and convenience, and are preferred by customers in big cities, experts say.

“Small stores, on the other hand, are fully borne by high rent and labor costs, but have relatively low sales per store,” Bharat Birla, executive director at Anand Rati Investment Banking, told CNBC.

However, analysts said that even though India’s convenience store market is crowded with 10-minute delivery apps and small mom-and-pop stores, Japanese companies could still find a niche in diversifying away from the “traditional grocery-led model”.

Birla said Lawson plans to “establish a local subsidiary and operate directly managed stores from 2027,” adding that 7-Eleven may also consider this route.

Earlier this year, multiple Japanese media outlets reported that the convenience store chain plans to open its first five stores in Mumbai in 2027, with a total of 100 stores in India by 2030. These stores will be owned and managed by Lawson through a local subsidiary to be established in India by February 2027.

Balaria said the shift from the twice-failed franchise model will give 7-Eleven room for “strategic engagement” and a broader path to localization and expansion across India.