0The 'One-stop' supermarket chain aims to provide consumers with a wide variety of essential home and personal goods under one roof.
Each DMart location stocks home utility items such as food, toiletries, beauty products, clothing, kitchenware, bed and bath linen, home appliances, and more at affordable prices that the customers value. It has a well-established presence in 235 locations across Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab, and Rajasthan after the opening of its first store in Powai in 2002.
DMart's sales mix remains primarily confined to food and groceries, while other businesses have rapidly grown into various segments of differentiated supermarket chains. Categories such as high-end electronics, jewellery, and watches – into which companies such as Reliance have ventured and account for up to 25% of Indian consumer spending – are avoided by the company.
Avenue Supermarts Ltd. (ASL) also owns the DMart-affiliated brands D Mart Minimax, D Mart Premia, D Homes, and Dutch Harbour.
The Background
Avenue Supermarts Ltd. (ASL), a company founded by Mr Radhakishan Damani, owns and operates Dmart. D-mart is an Indian hypermarket and supermarket chain established in 2002 in Mumbai by Mr Radhakishan Damani.
Radhakishan Damani had a humble start, living in a one-room flat in Mumbai with his family. After a year of studying commerce, he dropped out of college, and it was his father's death that led him to join his brother's stockbroker business. Thus began his career as a stockbroker.
He had quickly realized that to make money from the market; he needed to invest and trade his own money in the stock market, rather than just staying a stockbroker. He began his career as an investor in the stock market in 1980 and made a lot of money, especially during the Harshad Mehta influence.
After hitting such great heights, he abruptly left the stock market and decided to enter the retail industry in 2001. When D-Mart debuted on the market in 2002, it gave the challenging sector a new lease of life.
Damani recruited Ignatius Navil Noronha as head of business from Hindustan Unilever, where he was a young executive in market research, distribution, and modern trade. Noronha entered the company in 2004 as the head of business, and currently, he is the Chief Executive Officer.
He established the Dmart supermarket and hypermarket chain. He chose to extend the model to different locations after about a year when everything seemed to be in order. Dmart began its expansion in 2007, opening stores in Ahmedabad, Baroda, Pune, Sangli, and Solapur.
Dmart had grown to become India's third-largest branded retail chain by 2012-13.
2017- Initial Public offer of Dmart was announced.
In just 13 years, Dmart has managed to achieve profitability and has entered the top 20 most valuable companies club.
Their Mission and the Vision
Vision: To research, discover, and make available new products/categories for the customer's daily use at the "highest" value available.
Mission: To be the lowest-priced retailer in our service area/city/region.
WHAT DO THEY DO?
D-Mart has always tried to project the picture of a discount store that sells most items from all major brands to its customers. A store that provides good value for money! Dmart focuses on the middle-income community and uses discount deals as a promotional tool to draw buyers and increase sales.
Dmart offers a product that includes:
- Grocery & Staples
- Daily Essentials
- Dairy & Frozen
- Home and furniture
- Home Appliances
- Bed & Bath
- Clothing
- Footwear
- Toys
- Crockery
- Luggage
- Health and beauty
- Sporting goods and fitness
- Grocery
- Fruits & Vegetables
AWARDS AND RECOGNITION
Dmart has bagged various recognition and rightfully so:
- Entered the Top 20 valuable companies club
- 65th most valuable Indian firm, ahead of Britannia Industries, Marico, and Bank of Baroda
- Made a record opening on the market on the National Stock Exchange
THEIR BUSINESS MODEL
Dmart begins with low-cost items that customers require regularly and can sell for slightly less than MRP. It enables them to maintain a high inventory turnover ratio (a measure of the sale of an inventory). They then use the fast inventory turnover to negotiate better prices with suppliers, allowing them to maintain the low prices.
It can be said that the business model of Dmart is a never-ending loop.
HINDRANCES FACED BY DMART AND HOW IT WAS SOLVED
Technology
It was predicted that Damani's slow and steady speed enterprise might face formidable challenges posed by rapidly evolving technology. But it was proved wrong; Dmart now has an online website and a mobile app name Dmart Ready and growing stronger day by day.
Competition
Every business faces tough competition from its competitors. So, do Dmart! Dmart is rapidly expanding its reach and now has about 234 stores in India.
THE ROAD TO SUCCESS
"Buy it low, stack it high, and sell it cheap" is their ROAD TO SUCCESS!
Moreover, the success of Dmart is based on three factors: customers, vendors, and employees!
Customers: Since Dmart caters to middle-income families, many of their locations are in or near residential areas rather than malls. Dmart's goal is not to satisfy every customer need, as other rivals do, but rather to meet the majority of daily consumer needs while offering value for money.
Vendors- The second pillar of their model is vendor relationships. Damani's vendor partnerships have become his most significant asset since he comes from a trading background. The FMCG industry has payment periods ranging from 12 to 21 days, but Dmart pays its vendors on the 11th day. This keeps him on the vendors' priority list. Dmart gains higher margins because it buys in bulk and pays its suppliers on time.
Dmart owns most of the properties in all of the stores it operates, which allows them to save a significant amount of money on leases. Unlike other hypermarkets, they stop opening stores within malls to avoid paying exorbitant rents. Since rent is applied to a retailer's operating costs, the pressure is removed, allowing D-mart to increase its income further. This accounts for about 6-10% of its total revenue.
