Dmart Success Story: The Success We see, Inspiration We Don't

Dmart's Success Story: How it became the largest retail company?

We see the word discount & have your attention, and this is how every human being works. When we are offered something with the word 'discount' written on it, we quickly get attracted towards it, and this marketing strategy has done wonders for some businesses.

Bargaining is a skill that not everybody possesses, but the Indian housewives have mastered this skill, and any place where they don't have to put in efforts to bargain is a win for them. And this is where Dmart comes into the picture.

About Dmart Success Story

Dmart is an Indian retail company that operates a chain of supermarket stores in India. It is promoted by its parent company Avenue Supermarts Limited. Radhakishan Damani founded the venture in 2002, Dmart has become a one-stop destination for essential household items at discounted prices.

Mr Radhakishan Damani was an active investor in the consumer sector. Around 1999, he decided to leave the stock market for few years to concentrate more on the retail segment of India. He took a 5000 sq. ft. franchise of Apna Bazar, a chain of retail stores, and soon invested in another franchise of the same store. With this, he understood the working of a retail store and the consumer market, and within few years, he started Dmart to meet the growing needs of Indian families. The first store was launched in Powai in 2002, and in 19 years, the company has successfully launched 234 stores across various cities around the country.

Dmart Success Story - Business Model

Dmart aims to be a low-priced retailer in its sector that focuses on adding new customers to gain profits. The company is engaged in B2C business where it purchases commodities in bulk to avail maximum trade discounts and then resells the purchased items at a significantly lower price. As it deals in essential and basic consumer goods, it can successfully attract consistent consumers.

Dmart Success Story - Marketing Mix

• Product: Dmart offers a variety of products, from groceries to confectionaries. These quality products are available in different packaging and sizes. Dmart also has an easy return policy that allows consumers to exchange defective goods without any hassle.
• Price: Economy pricing is one of the reasons behind the success of this retail chain. The company offers a variety of goods at discounted prices which garners them with huge sales. It aims to target the price-sensitive group by keeping the price range within the customer's reach. Dmart also lets the consumers choose a payment option that is most reliable to them but doesn't provide any additional allowances on payments via credit/debit card.
• Promotions: Dmart has adapted to several promotional activities, and to boost sales, the retail chain offers various coupons to eligible customers. It also provides additional discounts on specific products during festive seasons like Diwali and Holi. It also creates brand awareness with the help of Hoardings and pamphlets.
• Place: The venture has established itself in metropolitan areas and even in other big vital cities and states. Apart from massive stores, the company also has introduced Dmart ready in various areas. It enables the customers to order groceries online through their app, which can later be picked up from Dmart ready points or delivered at their doorstep. This initiative has given Dmart more reach in places where it is impossible to inaugurate a supermarket store.

Dmart - Growth and Expansion

Within one year of establishment, the company understood the know-how of the consumer market, and that's when the company stepped in to open multiple outlets across the country. With support from local vendors nearby its potential outlet, the company was able to penetrate the market.

In 2007, the company opened new stores in cities like Ahmedabad, Pune, Baroda Sangali, and Solapur, and for the next 7 years, it successfully opened 73 stores across Maharashtra, Gujarat, Hyderabad, and Bangalore.

At present, the retail chain has 234 stores, including Dmart Ready stores in various cities. Dmart expansion plan was so solid and full-proof that soon it gained its presence in the retail market, and so far, hasn't shut down any of its stores.

Dmart also launched brands like Dmart minimax and D Homes that focus on home supplies. It also produces essential food items like dals, rice, pulses under the brand name Premia.

Dmart Success Story: Revenue

It wasn't until the year 2012 that Dmart stores witnessed a surge of consumers taking up their revenue to Rs. 3,334 crores, and with that, it became the third-largest retail chain in India.

Even though it had fewer stores than its competitors like Reliance Retail and Future Group's Big Baazar, Dmart managed the same turnover as these players. By 2014, it was making a profit of Rs. 100 crores.

Since the company self-owns its stores across the country, it helps them be a no-debt company as it doesn't need to pay the rent for owning a space. It allows them to create a strong financial base for their activities. Another contributing factor for low expenditure is their low-interior-cost concept by which the stores make efficient use of space and low maintenance of interiors.

Although amid the pandemic and lockdown enforced in India from March 2020, Dmart's earnings reduced drastically. It was able to recover by December and posted a net profit of Rs. 446 crores due to the growth in demand for essentials.

Dmart's IPO

The company opened its IPO of Rs. 1870 crores on 8th March 2017 at the price band of Rs. 295-299 per share. The IPO was subscribed over 104.8 times and was listed on BSE and NSE on 21st March 2017 at a premium of Rs 600, giving investors double returns in few days.

As of 29th April 2021, the company rewarded the investors with almost 10 times profit within four years. Today, the stock was trading at the price range 2880-2988.

It has become a significant player in the FMGC sector of India that is valued by not only retail investors but also Foreign Institutional investors as the stock holds immense potential to grow in the coming years.

Final Words

Dmart successfully captured its target audience by simply offering them better deals on essential items. To cater to the needs of Millenials, it also launched its app for them to view and purchase products online.

Dmart has created an image for itself which cannot be replaced by any other retail store present in the market today. Competing with such a powerful retail chain has become a challenge for many others engaged in the same sector as Dmart has won the hearts and saved the pockets of many Indian households.