India’s Twenty Four Seven aspires to be ‘Apple’ of convenience stores
Samir Modi has a very clear vision. As the managing director of Modi Enterprises, the company behind India’s first convenience store chain, Twenty Four Seven, Modi wants to be the Apple of convenience stores.
“Twenty Four Seven has been conceived and developed very differently,” he says. “We want to be the Apple store concept of convenience stores, where the stores are buzzing, the music is good, the decor is nice and the staff are very well dressed.”
For Modi, capturing that Apple factor in c-stores delivers a “10 minute break from the hum drum of everyday life” and is exactly the same experience he enjoys in other stores when he travels.
“We pay a lot of attention to detail,” he continues, “to the look, feel, smells and music in-store and even the carrying baskets, which are imported because we did not like the baskets you get in India.”
As well as delivering a new concept to the retail grocery market in India, Modi maintains Twenty Four Seven is pretty unique on the global stage too. “In the world over, I’ve not seen any stores that look like ours. I travel and benchmark myself with London and New York,” he says. “I aspire to be the Apple of convenience stores, so I do tend to keep my standards up.”
That ambition transcends every aspect of the business from the shopping baskets through to the staff uniforms, which have designed by a top designer, who Modi likens to the Armani of India. In striking black and green, the uniforms are effectively coveted by staff due to the label and feature custom designed jeans, with a higher than average Lycra content for improved comfort and fit.
As the first organized chain of c-stores in India, Twenty Four Seven offers round the clock convenience, providing an international shopping experience and a raft of products and services.
The business is growing rapidly. Modi reports the company, which is backed by Modi Enterprises’ flagship cigarette manufacturing business, Godfrey Phillips India, is opening one new store every three days.
The current Twenty Four Seven chain spans 97 stores but the business is targeting 124 stores in Delhi, six stores in Chandigarh and 10 in Mumbai by the end of March 2019 to create a 140-strong chain.
A further 500 are planned during the next year with a long term target of 5,000 stores over the next three to five years.
The company’s seven-year long partnership with the leading Indian oil company, IOCL, provides another pipeline for sites but openings are progressing more slowly than Modi would like; although they are not hampering growth overall growth either.
And there’s evidently ample opportunity. As well as being the country with the world’s second largest population, India’s extremely young demographic – 50% of India’s population is below the age of 25 and 65% is below the age of 35 – is the perfect fit with convenience. However, Modi concedes that it’s a “slow burn” because convenience is a new concept in India and the supply chain, especially in terms of foodservice, is radically underdeveloped. “We have to travel and find new items in terms of foodservice that are not commonly available in India,” Modi states. “Being in India is very challenging from that point of view.”
Margins are also very low in India: between 9-18%, which presents another challenge. And, while people may be pressed for time, Twenty Four Seven operates in a convenience vacuum. In this respect, Modi would welcome competition to improve the supply chain. Bureaucracy presents a further obstacle. “There are many rules and regulations,” Modi explains. “Many permissions are needed to open a convenience store, so it’s not so straight forward.”
In terms of key categories, the main focus at Twenty Four Seven is on ready to eat food, which accounts for a quarter of the business. Packaged beverages account for 20% of business and imported FMCG products a further 20%. Tobacco represents 10% of the business and homecare between 2-5%. The balance is attributable to domestic FMCG goods.
In food for now, Twenty Four Seven offers its own brands across a range of lines. These include sandwiches, Subway-style sandwiches, hot dogs, American waffles, waffle hot dogs, dumplings, pizzas, Indian meals, Chinese food and and street food. There’s also a wide selection of salads to cater for healthier options, while the bread the chain uses is either wholegrain or wholewheat.
Modi Enterprises is a family business, which was founded by Modi’s grandfather in 1936. Samir Modi launched his career working for Phillip Morris, the company’s partner in India for tobacco, in the US. Since then he’s gone on to refresh all of the Modi Group of Companies before turning his hand to launching new business formats, develop multi-level marketing, cosmetics and then convenience stores.
His skill and experience lies in introducing new concepts and launching technology and offerings, which are not available elsewhere.
“One of my strengths is marketing – I think out of the box,” he says; adding that he’s had experience of the customer service industry ever since his first job, which was waiting on tables during his time at high school.
Creativity is another gene and is shaping the Twenty Four Seven business too. “I’m a firm believer of change. Change is the only constant. We are constantly bringing in new innovations into stores,” he says.
Modi says he is inspired by travel. He takes pictures, talks to a lot of people and does research. “I’m constantly on the look out for new things that will make the life of the consumer better,” he says. “I’m constantly innovating.”
His love of hot dogs in America, for example, inspired Twenty Four Seven’s own offering, which is very American in style.
Other novel products new to market in India include waffles and waffle hot dogs plus Shaadi coffee, a popular Indian coffee made from milk, coffee and chocolate powder that is traditionally served at Indian weddings (Shaadi means wedding). In order to create the product, Modi has developed a new machine for the stores.
He’s also introduced bakeries into stores so customers can get freshly baked bread but is importing the dough from France.
Twenty Four Seven is also testing what Modi describes as “unbelievable price points”: 55 cents for an Indian meal or 95 cents for chicken and rice. “It’s cheaper than what you can get on the roadside,” he says. “Meals should be more competitive to eat outside than to bring food from home.”
The retailer is also innovating in the tech space. “We are looking at tech for our stores and we have very savvy checkout systems. Now we are looking at smart checking out and cashless. Plus, there’s a lot of digitization in stores – on the displays etc. Music also is key and is very new and up with it.”
Keeping pace with those digital natives demands Twenty Four Seven builds a strong Online to Offline (O2O) strategy too, Modi reports. A new app, with 130,000 users, is designed to attract younger consumer to visit stores more often and is paying dividends. This group now view Twenty Four Seven as a destination and somewhere to hang out, even though seating is prohibited for 24/7 convenience retail, he adds.
News is spreading fast, however, and stores are reported to be completely packed at night. “The food is good, the pricing is good and it’s a great alternative to eating in a restaurant,” Modi says. Customers opt either to eat in-store or take out to eat, he reports.
While Twenty Four Seven does enable collection of online orders from other retail websites at its sites, online ordering isn’t on the cards for its own business. “We don’t want to do online ordering because we can’t compete with Amazon and Alibaba so we like customers to come come into our stores to buy,” Modi says.
In the meantime, there’s sufficient new technology and food offerings to entice customers to his stores including a machine that uses digital technology to cut meat to exactly the same thickness plus a new food range presented in vintage-inspired packaging.
“We’ve spent a year developing the packaging and it will put a smile on customers faces. We are also concentrating on importing items that you find in the Western world but not in India,” Modi says.
Looks like Twenty Four Seven has captured that Apple magic in convenience.