Inspiring Success Story of Dmart
The 61-year-old founder Mr. Radhakishan Damani from the retail chain Dmart was a famous investor and shareholder for trade before he became a legendary entrepreneur figure in the market. The splendid success story of Dmart is entirely credited to Damani. The public offer of Dmart’s shares holding company Avenue Supermarts today and made it a spectacular debut on BSE(Bombay Stock Exchange), as its shares got listed at a 102.14 percent premium. Dmart is valued at Rs 39,400 crore, more than the combined market capitalization of its two biggest rivals, Future Retail and Aditya Birla Fashion in the same segment.
Humble beginnings to stratospheric success: The DMart Story
There are many reasons for the glorious run that Dmart has been enjoying for over twenty years since its inception. The rise has been so rapid that it has even led to Kishore Biyani competing Future Group stating publicly in an interview that there is something for him to learn from the business model of Dmart as a successful market.
Dmart was founded in the year 2002 by a 45-year-old Radhakrishnan Damani at a point when he already made his millions in the market. When Damani founded DMart, he was already a legendary name in Indian stock markets or Bombay Stock Exchange. Moreover, he picked up several value stocks and seen them as a rise to stratospheric valuations for the new company, including Gillette and HDFC Bank.
He dropped out of a commerce degree after the first year in the graduation, and he first joined his father’s ball bearings business after quitting studies but had started investing in stocks when he was 32 years old. Hereby, he ended up becoming one of the biggest stock investors of the 90s, and the current stock market investor Rakesh Jhunjhunwala considers him to be the best mentor of all time.
But after a full packed successful stock market career in investing for consumer-facing companies, Radhakishan Damani decided to start his own work and he founded the supermarket chain DMart in the year 2002. Moreover, he adopted strategies that were unique to the Indian retail market. Afterward, most retail chains leased their stores for their market and Dmart chose meticulously to do its research and owned its own stores outright in various corners around India.
That strategy seems to have worked for Dmart and from that day they never had to shut down a store, it’s opened in all the years of its operation in various places. While other retail players in the market time to the time change and forayed into other categories, including electronics and fashion, Dmart remained simply focussed on its core food and grocery business in the market. Apart from that, when other supermarket chains are all launching their own private brands for more sales and in a bid to improve margins, DMart still stocks only third-party products for its grocery.
The loyal consumer base decoded
One of the major reasons for D mart’s dedicated customer base is its low prices for Indian households. For instance, there is a minimum of a 3% discount on every product off its shelf if you buy it from Dmart. Ultimately, the store décor of D mart is simple, even for the ones situated in urban localities like Mumbai. This does not drive away any positive consumers and they keep returning to busy from the trusted brand name. This is also coupled with a low price range, which means that bulk buying is a very common phenomenon, on the demand side of Dmart.
Strategies Have Been Adopted By Them
In the beginning, Dmart wants to create an image in the market amongst the masses of a discount providing a store that offers most of the products from across all major brands. Basically, they want to launch a store that offers value for money.
For now, most of the people come to Dmart because they will get all things what they need under one roof; hereby, Dmart stores are operational in high traffic areas and urban cities. They are providing the business across three formats including Hypermarkets that are spread across 30,000-35,000 sqft. Apart from that, Dmart Express format that is also spread over 7,000-10,000 sqft and lastly, the SuperCenters, that are set up at over 1 lakh square feet are very big business for Dmart.
Ultimately, Dmart’s final target audience is the middle-income group as they like using Discount offers as a promotional tool for luring the customer range and increasing their sales as well. Moreover, Dmart’s success is mainly focused on three things: All Customers, Vendors, and their Employees.
Take Customers is their real-time strategy since D mart is targeting middle-income households, all its realtime stores are in, or near to, residential areas that are not in malls. Their aim is not to only meet every consumer’s needs like other competitors, but they wanted Dmart to aspires and meet most regular consumer needs while providing value for their money in groceries.
Their Growth So Far
Since the time Radhakishan Damani was an investor, he liked the consumer-based business and was seen investing in similar stocks to grow more. Therefore, Damani always had a strong affinity to start up a business in the same sector. In the year 1999, when the retailing business was far from reality in India, he decided to enter the ring of this market with a strong will of winning.
He suddenly shocks to everyone and left the stock market for about six years, and along with his Damodar Mall, took a 5000 sqft land for ‘Apna Bazaar’ franchisee in Nerul, Navi Mumbai and soon, added many more outlets. After two years, they finally set up D mart and took over Apna Bazaar which is their own brand.
The early days of their business were all about intensive learning for the market, majorly understanding the customer’s mindset and accordingly creating a store chain, improving billing systems in India, gaining the confidence of vendors, etc. D mart has conservative but a fully profitable approach that seems to be modeled after its founder and Damani is notoriously media-shy personality and gives no interviews.
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