despite the backing of the Reliance conglomerate reflects a fiercely competitive urban market where modern retailers are fighting quick-delivery players, raising questions over the prospects of new foreign entrants like Japan's Lawson that are betting big on the world's most populous country.

Foreign retailers have been trying their luck in India for nearly two decades, drawn by the lure of an expanding middle class and the fact that personal consumption accounts for nearly 60% of gross domestic product. Consultancy Redseer estimates the grocery market will grow from $658 billion in 2026 to $992 billion in 2030.

Lawson is set to open five company-owned stores in Mumbai next year and is eyeing 10,000 stores by 2050 through franchise and licensing agreements. Another retailer, France's Carrefour, relaunched in India in September through a franchise deal with the Apparel group, having quit the market in 2014.

Analysts say these and any other new entrants will need to differentiate their offerings to stand out in India.

Companies including Carrefour and Germany's Metro AG have been stymied by rules that limit foreign ownership in retail operations selling multiple brands to 51%, restricting them to operating wholesale cash and carry centers, rather than the consumer-focused outlets that they envisioned. Lawson plans to get around investment restrictions by initially selling only its private-label products.

Under an arrangement like the one between Carrefour and Apparel, franchise operators set up and run the stores while paying license fees and royalties to Carrefour. The retailer, in this case Carrefour, benefits from such arrangements because the financial responsibility lies entirely with the franchisee.

But the challenge for retailers, both foreign and domestic, has deepened due to the rise of quick-delivery services, with analysts saying 7-Eleven's travails underscore rapid changes in shopping habits, particularly in large Indian cities. Blinkit, Swiggy and Zepto have captured the imagination of affluent buyers with promises of delivering everything from groceries to iPhones in less than 20 minutes.

Swiggy's fast-delivery services notched 202 billion rupees ($2.1 billion) in sales net of discounts in the fiscal year ending March, almost three times that of two years ago. At Blinkit, sales soared nearly five times to 486 billion rupees. The boom was backed by rapid expansions of the retailers' footprints, with Swiggy doubling the number of its warehouses to 1,143, and the count at Blinkit soaring four times to 2,243.

Such growth has prodded online heavyweights such as Amazon and Walmart's Flipkart to throw their hats into the fast-delivery ring. The Tata group, meanwhile, offers quick deliveries through Big Basket.

Then there is Reliance Industries, which operates over 20,000 stores across electronics, fashion, lifestyle, pharmaceuticals and groceries through its Reliance Retail arm but did not compete with 7-Eleven's core proposition of food and snacks. It has jumped on the bandwagon with Jio Mart. Beyond 7-Eleven, the unit has also had unsuccessful joint ventures with the likes of shoe maker Clarks and denim brand G-Star.

Quick-delivery services are weaning urban consumers off organized retailers like DMart and Reliance Retail. Low-income households, however, continue to frequent the thousands of neighborhood mom-and-pop stores that stock relatively inexpensive mass-market brands. Many of these shops, known as kirana offer goods on credit and some discount on the sticker prices.

"Quick-delivery is making a dent in urban India, particularly among the higher-end consumers, and the impact is being felt more by the large format supermarkets and grocery retailers," said Arvind Singhal, chairman and managing director at consultancy The Knowledge Company. "A lot of growth, which would have otherwise come to offline retailers, is actually going to quick deliveries."

Some retailers acknowledge the issue. DMart CEO Anshul Asawa told analysts in June that stores in metropolitan cities such as Bengaluru and Mumbai faced a "fair amount of impact" from competition, with buyers preferring quick deliveries, "especially for the lower basket sizes."

He added, "I am suspecting that's not going to change over the next few years." Singhal said 7-Eleven offered a much smaller assortment of goods compared with homegrown national players like DMart and Reliance Retail, as well as regional players like MK Retail or Ratnadeep Retail, which sell a wide gamut of products including groceries and daily essentials ranging from cookware to stationery. 7-Eleven's key offering in its major markets like Japan and Southeast Asia -- fresh food -- did little to help the company in India, where food delivery services like Zomato and Swiggy are flourishing.

"Given the stiff competition from large format retailers and neighborhood stores, I don't see a strong business case for such stores [as 7-Eleven]," Singhal said.

What's more, a foreign name adds less value these days. "Offering standardized merchandise will be a tougher play in the Indian market today, even for foreign retailers, because consumers today are no longer impressed by foreign brands," said Bharat Birla, director at Anand Rathi Investment Banking.

"They want value," he said. People do not leave home simply for a normal grocery run, "and any foreign player should factor in these nuances, especially in the metro cities." Lawson is tailoring its offerings by developing food products free of meat and eggs, as well as selling Japanese specialties like rice balls and oden hot-pot dishes. But analysts are skeptical about its private brand strategy: While niche offerings could help grab eyeballs initially, the bigger challenge is to get people to visit its stores regularly.

"The biggest challenge here is that the shopping format is rapidly changing," said Harminder Sahni, managing director at consultancy Wazir Advisors. "So in order to thrive, Lawson has to possibly explore online sales, otherwise it could be difficult to sustain the momentum."

Birla said it is crucial for brands to become aspirational. This is how Zara, H&M, Uniqlo, Marks & Spencer in fashion, Starbucks in food, and Ikea in homeware and furniture have flourished in India, though "multibrand is a different format altogether." "The brand has to be aspirational for consumers to break the cycle of shopping online, which has happened in apparel, but it is a little difficult in grocery in a multibrand format," Birla said.

"It has to be a little more niche and targeted, like doing only a gourmet line, which merits visiting a store. "Otherwise it's tough to get people to do something that is not convenient."