DMart, an India chain of self-service grocery store established by Radhakishan Damani on 15th May 2002, having around 214 stores in 72 cities across 11 states in India including Maharashtra, Andhra Pradesh, Telangana, Gujarat, and many more as of 2021. Having its headquarters in Mumbai, DMart is operated by its parent company ‘Avenue Supermarts Ltd. It is one of the most disruptive company in the food retail industry of India.
FOUNDATION OF DMART-
When Radhakishan established DMart, he was at a great name in Indian Securities Exchange, where he already had a couple of worth stocks that outperformed Gillette and HDFC Bank’s valuation. Radhakishan Damani, a drop out of a trade degree first worked in his dad’s mental rollers business, and at this point started investing resources into stocks at the age of 32. He ended up becoming one of the greatest stock financial specialists of the 90s and the recent security exchange bull, Rakesh Jhunjhunwala acknowledged him as a tutor. Regardless, after a powerful monetary trade calling placing assets into customer defying associations, he decided to start his own.
On May 15 2002, Radhakishan Damani set up the self-service grocery store, DMart and embraced strategies were on of a kind to Indian retail. However, most retail stores rented their stores, but DMart after a careful research and study established its very own stores. The strategy seemed to have worked out ad DMart never had th shut down any of its store since it got opened in every one of the long periods of its activity. Regardless of other retailers forayed into various classification, including tools, hardware, and design, DMart remained focussed on its center sustenance and basic food item business. Further, when other store chains are all in shifting their own special private brands in a proposal to further develop edges, DMart actually stocks outsider items.
DMART BUSINESS STRATEGY-
Ever since DMat went for IPO in the year 2017, in just four years its share prices shot up to 580% going from just 616 rupees to more than 4200 rupees in 2021. And the most intresting thig about DMart is that in its 19 years of journey, it never closed a single store until the pandemic hit. Regardless of having big competitors such as future retail and reliance retail, the company’s profits increased rapidly by 1700% going from just 60 crores in 2012 to more than 1000 crores in 2021. Now the question comes that how Radhakishan Damani made DMart one of the dominating force in the food retail industry?
So the first most important element behing DMart growth is nothing but just the PRICE. If one visits a Dmart store, Neither the store are made fancy, the products are fancy nor it is located in any of the fancy malls but yet people have gone out of the way just to shop at DMart. This efforts that people take to shop at DMart is because the prices of products at DMart is always 6%-15% lower than the MRP. This 6%-15% discount makes a big difference as for a middle class family, little savings they get act as their emergency fund.
And this is the reason why the company dominates an extraordinary level of brand loyalty from the Indian middle class customers. The second part of the company’s strategy is the Deep Discounting. Deep discounting looks like making less profit but it has some incredible benefits such as- it results in more volume of sales that means people will come to the store to buy that one produt but as DMart has a lot of other products, there are more chances of people buying other products along with that one product they came to buy.
Then comes the Inventory starts moving in a flash speed that means a retailer like DMart would sell the product quickly to get new stocks of that product which would also result in no expired products and people would love to buy from DMart as it sells fresh products. Being a retailer, the most important thing is that it gets the better bargaining power with the seller if the inventory moves fast. When DMat scaled up the profits by applying this technique, the company became so powerful that it started dominating the sellers and started crushing other retailers.
Then comes the DMart competitive strategy against its competitive giants. This strategy can be described in three words- careful, non-fancy, and ownership. It can be seen that Radhakishan Damani was extra careful when it came to the expansion of DMart stores and in spite of being in the market for 19 long years, the company just have 220 stores whereas its competitor Big Bazaar has 284 stores and Reliance retail has more than 11,000 stores.
The reason behind DMart growing slowly is that they take time to understand their customers, build operational efficiencies, and form a solid positive relationship with its suppliers and this was also the reason that until 2020, the company had never closed a single store since its inception. DMat even follows a Store Ownership Model that helps them to save a lot of money on rental expenses. These business strategies of DMart made Radhakishan Damani, the Retail King Of India.
By Gitika Mandhana