Why is DMart taking the ecommerce route?

DMart is one of the Indian Stock Markets’ darlings debuting at ₹ 299 three years back.

It is now at around ₹ 2000 plus.

The rise of this brick mortar retail company when there were giants like Reliance and More in the market is truly an astounding feat. This was a time when businesses were moving their model to an online offline combo or trying to just get online.

The advantages for getting retail online are many.To list a few

  • Easy Access to Markets
  • Overheads get reduced
  • Growth is rapid
  • Helps customer acquisition and predicts behavior using  analytics.

During the lockdown, DMart seems to have learned that lesson.

For a company that boasted of not shutting even one outlet since opening in 2002, shutting a couple in Mumbai to repurpose them as ecommerce fulfilment centers, DMart has really proven that it can be flexible.

The wake up call seems to be the 37% drop in profit this year while also losing 12.3% of its revenue in the quarter ending September.

The online brand is to be called DMart Ready.

The company has invested  ₹ 252.76 crores as of March 2020 to launch an ecommerce organisation called Avenue Ecommerce.

 

COMPANYRevenue per sft
Reliance₹ 45424
DMart₹ 36307
Star Bazaar₹ 24625
More₹ 20268
Spencer₹ 15975

Source: Edelweiss Report



 

While it is a behemoth in retail brick and Mortar just behind Reliance, it now remains to be seen how ready DMart is?

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