Mumbai: Kishore Biyani-promoted Future Group, which runs India's largest retail chain in both value and lifestyle formats, plans to increase the number of franchisee-based convenient stores to over 1,000 in the next two years.
Currently, the company has 100 franchisee-based convenient stores in Delhi and 200 stores throughout Delhi, Bangalore and Mumbai. "We plan to expand to more than 1,000 convenient stores in these cities in the next two years," company's Associate Vice President, Strategy Dipayan Baishya said.
This would be an alternative viable option as in the next 5-7 years the cities are expected to face shortage in the availability of land for retail expansion, he said. The company is also expanding its presence in the rural areas through the franchisee-based model.
"More than 90 per cent of rural retail market is left to be tapped and franchisee-based model is proving to be the most efficient one in tapping this market," Baishya said.
The company's experiments in Kalol, Gujarat and Karnal, Haryana are so far proving it is effective to set up a single big wholesale unit in remote places and encourage residents in villages nearby to run franchisees by sourcing products from the unit.
"In this way, villages will have access to the best of the products available in cities," he said. Currently, the company is running about 15 franchisee outlets around its Karnal wholesale outlet.
"We will be providing the right brand, technical and training support for the franchisees to ensure uniformity in the look and feel of these stores. At this moment, it makes little sense to operate fully owned retail shops in tier-III towns and villages," he said.
In 2011, Indian retail market was about USD 470 billion and is expected to touch USD 675 billion by 2016. By 2020, the traditional and organised retail industry industry is expected to touch USD 1.3 trillion.
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