The Rs 2,500-crore K.K. Modi Group has joined the retail industry bandwagon, with the launch of its first convenience store in Delhi today, called `Twenty Four Seven'.
The group plans to invest Rs 40 crore over the next two years in expanding its retail presence and is looking at setting up 500 such stores across Delhi and Mumbai over the next five years.
Said the President of Twenty Four Seven Retail Stores Pvt Ltd, Mr Samir Modi, "The K.K. Modi Group's retail venture has been in the making for two years. We studied markets such as Japan, the Philippines, Thailand and Taiwan to better understand the concept of 24-hour convenience stores before taking the plunge. There is no well-established convenience store brand in India at present so the opportunity for Twenty Four Seven is immense."
Billed as a store that remains open all 24 hours of the day, Twenty Four Seven will sell FMCG products and food items besides offering other conveniences such as movie tickets and banking via ATM machines.
Mr Modi said besides stocking well-known FMCG brands, these stores will also sell 300 private labels across food items and staples such as pulses and rice.
"We will stock 3,500 SKUs (stock keeping units) of branded FMCG products, another 3,500 SKUs of prescription and over-the-counter drugs besides our private labels."
As per the company's initial expansion plan, four Twenty Four Seven stores will come up in Delhi by September this year.
Mr Modi said that the first few stores would be company-owned but that later franchisees would be roped in.
Asked whether he was looking forward to the Government allowing Foreign Direct Investment (FDI) in retail, Mr Modi said. "FDI will bring in greater competition, which is always welcome. We are not closed to the idea of roping in a foreign partner ourselves but there is no such proposal right now."
On when does the convenience store venture begin making money, he said that the company was targeting a two-year break-even period.
Mr Modi said that the retail industry was in an investment phase at present, with retailers working on very low margins, in the region of 7-15 per cent but these should eventually reach the globally accepted levels of 30-50 per cent.