From Humble Beginnings to Retail Royalty:

Damani’s journey began not in the gleaming aisles of supermarkets, but in the frenetic world of
stock trading. He honed his skills on the Bombay Stock Exchange, eventually building a
reputation as a shrewd investor with an eye for undervalued gems. This value-seeking
philosophy laid the foundation for his foray into retail.

In 2002, Damani saw a gap in the Indian market. Supermarkets were either too expensive or
lacked quality. He envisioned a store that catered to the needs of the middle class, offering fresh
produce, groceries, and household items at unbeatable prices. Thus, DMart was born.

The DM”rt Difference:

DMart’s success lies in its unwavering commitment to value. Damani’s mantra of “everyday low
prices” is not just a tagline, it’s a way of life. The company negotiates directly with farmers and
manufacturers, bypassing middlemen and slashing costs. This translates to significant savings for
customers, who can find their favorite brands at prices often lower than traditional kirana stores.

But DMart is not just about cheap deals. It’s also about creating a pleasant shopping experience.
The stores are clean, well-organized, and stocked with a wide variety of products. The staff is
friendly and helpful, adding a personal touch to the shopping experience.

DMart Important Information

Other Important Information:

Number of stores: 341 as of December, 2023, across 14 states in India.
Headquarters: Mumbai, India
Focus: Grocery retailing with emphasis on value pricing and private label brands.
Online presence: DMart Ready is the company’s online e-commerce platform.
Publicly traded: Listed on the National Stock Exchange and Bombay Stock Exchange since
March 2017.
DMart Vision and Mission:
The Damani Effect:
Damani’s influence extends far beyond DMart. He is considered a pioneer in the Indian retail
industry, inspiring a new generation of entrepreneurs to focus on value and customer satisfaction.
His success has also brought much-needed attention to the plight of farmers, as DMart’s direct
sourcing practices ensure fair prices for their produce.

The Road Ahead:

DMart is not resting on its laurels. The company is constantly expanding, opening new stores
across India and venturing into online retail. With Damani at the helm, DMart is poised to
continue its reign as the king of value-driven retail, not just in India, but potentially on the global
stage.

DMart: A Legacy in the Making

DMart is more than just a store; it’s a testament to the power of vision, hard work, and a
relentless focus on value. Under Damani’s leadership, DMart has not only redefined retail in
India, but also inspired a generation of entrepreneurs to prioritize the needs of the customer. As
DMart continues to grow, one thing is certain: the legacy of Radhakishan Damani and his value-
driven retail revolution will continue to shape the Indian market for years to come.

Interesting Facts about DMart:

DMart sources over 80% of its products directly from farmers and manufacturers.
The company has a strict policy against discounts and promotions, believing in everyday low
prices instead.
DMart stores are known for their efficient layout and clutter-free aisles, making shopping a
breeze.
Damani is a notoriously private individual, rarely giving interviews or appearing in public. This
adds to his mystique and the aura around the DMart brand.
DMart Latest News
Financial Performance:

Q3 FY24 Revenue: DMart reported a 24.7% YoY increase in revenue to Rs 11,305 crore for the
quarter ended December 2023. (Source: Moneycontrol)
Stock Performance: DMart’s stock has been on a breakout from a descending triangle pattern,
making it an attractive buy for short to medium-term traders with potential targets of Rs 4500-
4600. (Source: The Economic Times)
Market Cap: As of November 22, 2023, DMart’s market capitalization was approximately
₹1,36,265 crore (US$16.2 billion).

Retail markets & shops have a very ancient history. Over the centuries, retail shops were
transformed from
Little more than “rude booths” to the sophisticated shopping malls of the modern era. To
understand the
Business transformation of the Retail Industry, it becomes extremely important to know the
potential of theIndustry. As per IBEF Report it is expected to grow to US$ 1,100 trillion by 2020
from US$ 672 billion in2017. The expected growth is manifolds making It imperative to study it
further National players such as Reliance Retail & Future Retail have a greater influence on the
retail market as theyare present in each and every state of the nation. But still in this cut-throat
competition, D-Mart, the chain ofretail supermarkets, being a regional player in west & little in
south, stands highly profitable than its
Competitors. This case study‟s the progress of the D
-Mart. Its challenges, strengths and potentials, which will prove to be the best learning source for
every company that finds key competitors in the market. Establishedin the year 2002, D-Mart,
though a valued brand has its own share of challenges. The case highlights the entryand journey
of D-Mart, its strategies & progress, challenges & corresponding strengths and the
surroundingdilemma.
RETAIL INDUSTRY IN INDIA
Retail industry is one of the largest and the fastest growing industries in the global economy.
Retail industryin India has been present through history. It is only in the recent past that it has
witnessed so much dynamism.It is slowly giving way to international formats of retailing.
According to IBEF report (2017), retail sector in
India accounts for about 10% of countries GDP and is the world‟s 5th largest global destination in
the retailspace. India‟s retail sect
Or is experiencing exponential growth, with retail development taking place not justin major
cities and metros, but also in Tier-II and Tier-III cities. It is expected to grow to US$ 1,100
trillion by 2020 from US$ 672 billion in 2017 as per IBEF Report.
CONSTRUCT OF THE CASE
Every Organisation is formed with definite objectives. This case revolves around the formation
andfunctioning of an unbeatable retail store operating mostly in the west and south in India. The
pillars of theorganisation, the respective challenges, strengths & weaknesses, the dilemma
associated with survival andrelevant recommendations are part of this case study. The case
highlights the business model of theorganisation which makes it unbeatable by its competitors
and also the SWOT analysis of the Organisation, both leading to the construction of strong base
towards understanding the functioning of the Organisation. Theattempt with this case has the
scope of resolving inquisitiveness towards running a company in highlycompetitive era. The
complexity of Retail Industry, the preference of consumers towards supermarkets and the market
dilemma associated with such businesses signifies the rationale behind constructing the case.
OWNER’s PROFILE

Mr. Radhakishan Damani – Mr.WHITE & WHITEMr. Radhakishan Damani is an astute Stock
market Investor, Stockbroker, Trader and the Founder & Promoterof DMart. He is popularly
known as Mr. White & White as he always dresses in white shirt & white trousers.Much before
D-Mart was established; Mr. Damani was known to be an ace investor in the stock market
muchlike Rakesh Jhunjhunwala. Due to his Midas touch, he has successfully earned the
reputation of being one of
India‟s finest value investors, and as a matter of fact, he was a mentor to Rakesh Jhun
Jhunwala. At 98th position on Forbes list of the wealthiest, he is valued at $1.1 Billion, which has
been earned all from absolutelyalmost no wealth
Competition:
D-Mart is confined to a few states in west and south India and operates 141 stores. It has
notscaled up to the level of its other competitors, such as Reliance Retail, run by business tycoon
Mr. MukeshAmbani which operates more than 3600 retail stores & Future Retail, run by Mr.
Kishor Biyani whichoperates more than 1315 retail stores. The challenge it might face is to keep
up its model of local suppliesand cheaper prices working when it expands, as it has not yet scaled
up to their level.
Technology:
Future of retail does not seem to be the brick-and-mortar retail. And D-
Mart‟s slow and steady
Pace enterprise can run into formidable challenges brought in by fast evolving technology. India
iswitnessing enormous usage of smart-phones. Cheaper devices and data, expanding telecom
infrastructureand the governments big push for digitization is not exactly conducive for the
growth of retail stores.
According to the Global Payments Report by payments firm World pay, India will be the world‟s
Secondlargest e-commerce market by 2034. This is a run for survival of offline retail stores in
future iftechnology is not adopted wisely.
Consumer behaviour:
Total Retail Survey 2016 of PwC says online shoppers around the world arefundamentally
disrupting retail. In India, 55% consumers compares prices using mobile in store while 53%were
likely to buy from offshore online retailer for better prices.
Retail Store Bubble:
While surveys point out a phenomenal growth in e-commerce in India, USA has
Reported ‘Retail Store „Bubble‟, once considered a competitive advantage, store footprints have
now
Becomea burden for many chains as more shopping moves online. According to a Bloomberg
report, chain store likeBebe in the US is closing all 170 of its stores to focus on online sales.
More than 3,500 stores are expected toclose in the next couple of months in the US, says a report
in Business Insider. These include big names suchas JCPenney, Macy’s, Sears, Kmart, Crocs,
BCBG, Abercrombie & Fitch and Guess. The big reason for thisshutdown is growing e-
commerce. What is happening to the brick-and-mortar retail in the US today mighthappen in
India too, sooner or later. Thus ecommerce is a big challenge in long run for offline retailers.
STRATEGIES
D-Mart has adopted Cost Leadership strategy under Generic strategy as its primary strategy to
target thatgroup which is price sensitive. It has also adopted Expansion strategy under the
umbrella of Grand strategyin order to grow and spread its presence. D-Mart has set up its stores
at very strategic points to gainmaximum advantage from its locations because easy accessibility
and proper transportation facilities arevery important for the survival of any outlet. D-Mart never
planned of opening a store in a mall and sticks towhat it knows best. It uses one of two formats
of stores whose size is calculated based on location andshopper density. This strategy pays off for
the company. D-Mart has also consistently followed theownership model strategy, owning most
of the stores or having them on 30-year long-term leases. Since realestate leasing usually eats up
4-6 % of revenues, the ownership model has kept costs low. Basically, their
Strategy is to “Buy it low, Stack it high and sell it cheap”!

D-Mart adopts following winning formula as its strategy towards cost leadership strategy
E. D. L. P.:

A WINNING FORMULA Making products available at Every Day Low Price (EDLP) is D-
Mart‟s winning formula in value retailing. For EDLP, the company focuses on Every Day Low
Cost
(EDLC), the key ingredients of which are:
1) Right product assortment: DMart focuses on the most popular SKU‟s (from the
perspective
Of its targetcustomers monthly purchase basket) in each product category. This helps to improve
sales velocity, lower pilferage and ensure fresh products on the shelf. D-Mart enjoys revenue per
square foot of Rs. 29,019against less than Rs.17,500 (FY16 data) for peers.2) Owned stores
model: Its strategy of expanding through owned stores ensures savings in rent costs (5-6%for
peers) and protects it from escalation in rentals. D-Mart presently owns 85% of its total outlets
whichhelps it to keep well capitalised and debt-light, while its operations generate spare cash. All
the money that is
 2) Sourcing efficiency: D-Mart purchases directly from manufacturers and primary vendors,
thus saving onintermediaries margins. Upfront payment to suppliers helps in availing
cash discounts, which is passed toend consumers. Its logistics partners earn lower
revenue per km but the turnover offered is higher and payment is immediate.4) Cent
Ralized sourcing: 40% of DMart‟s total sourcing is centralized, giving it greater bargaining
power. It
Stocks faster moving products like food and grocery in warehouses closer to its stores and slower
moving products like apparel further away, thus optimizing storage costs.5) Lower employee
cost: D-Mart works on a variable employee model, which ensures low employee costs
–
Below 2% of sales. Only around 4,200 employees are on its direct payroll. The balance staffs
are third-party party hires.6) Input metric focus: D-Mart rates its managers based on number of
idle cash counters, empty shelves(especially when stocks exist in warehouses), and level of
pilferage. It allots ESOPs to deserving employees,creating a sense of ownership amongst
employees.
DILEMMA
Businesses face challenges in the environment which marks a set of dilemma surrounding its
functioning.
DMart‟s cost efficiency model is achievable in short run but in long run along with scaling
business, cost
Burden also increases and that creates a dilemma for DMart. It is not possible for bigger chains
to own storesas it requires huge capital expenditure, which is why D-Mart is growing
slowly.Also, the future of retail does not seem to be the brick-and-mortar retail & D-
Mart‟s slow and steady pace
Enterprise is a dilemma as against the fast evolving technology. People in cities especially are
highlylethargic about leaving their homes and prefer to shop online today. Hence, DMart
experiences the dilemmaof survival in future of technology.
CASE IMPLICATIONS
D-
Mart‟s
Case study makes one aware about the techniques it uses especially for cost efficiency.
Theirstrategy has marked difference from nearly every other Indian retailer. Whereas other
companies haveexpanded quickly into multiple segments with differentiated retail chain, D Mart
has restricted segmentation.This makes Dmart more profitable than others. It has certain
challenges but the founder is always preparedwith some out of box strategy & gives stellar
performance. The inferences drawn from the case may lead to
Possible understanding of a company‟s performance, the way it differentiates from its
competitors. The
Company is working on its dilemma by pilot testing some online services & home delivery
services in metrocities keeping in mind its cost efficiency

Radhakishan Damani was born inkarad a small town in Maharashtra andraised in a single room
apartmentin Mumbai. He studied commerce at the University of Mumbai but droppedout after
one year. After the death ofhis father who worked on Dalal Street,Damani left his ball bearing
businessand became a stock market broker andinvestor. He made profits by short-selling stocks
that were inflated byillegal means by Harshad Mehta in the1990s. Damani was reportedly the
largest individual shareholder of HDFCBank after it went public in 1995.In 1999, he operated a
franchise of Apna Bazaar, a cooperative departmentstore, in Nerul, but was “unconvinced” by its
business model. He quit stockmarket in 2000 to start his own hypermarket chain, DMart, setting
up the firststore in Powai in 2002. The chain had 25 stores in 2010, post-which the company
grew rapidly and went public in 2017.Board of Directors

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Strengths Focus on the long-term: Damani, D Mart’s founder is an investor and hencethe
company has concentrated solely on long-term profits. This has resultedin the company
optimizing its returns through a pricing approach driven bydemand. Slow scaling: D Mart
began on a very low keynote and gradually took its timeto raise the ladder upwards. This gave
the company greater leverage anddeeper knowledge of its supply chain, as well as allowing them
to betterhandle the bottom line. Customer-Centered Management Approach : D Mart has a very
strongworkplace policy in place and is very open in its interactions with theemployees. They do
have a strong relationship with vendors andmanufacturers and are satisfied with stakeholders.
Discount policy: One aspect that sets D Mart apart from his rival isits massive strategy of
discounting. The store is selling vital items at a flatdiscount price that most rivals are unable to
match and this has helped themreach the market. Clear distinction based on price: D Mart
never adopted the trends set byother rival retail companies but believed in setting their own
trends. Througha simple price-based distinction they dominated the market and sold
theirproducts at much lower prices than rivals.Weaknesses  Focus on other places: D Mart has
concentrated mainly on the WesternStates and has a very small presence in the South, quite
unlike its rivals, whoare present everywhere. That has prevented them from gaining popularity in
the market. Slow growth: Nearly 16 years ago, D Mart established much before the retailboom
set a fire in India. However, owing mainly to its long-term outlook, ithas not been able to
dominate the market, even as many of the laterentrants. Low pricing sustainability: The
company has a zero credit policy and somanufacturers and suppliers offer them a much better
deal which is how thebusiness can afford the low prices that the rivals can not imagine. No
frills: D Mart follows a No-frills strategy wherever possible the emphasis ison cutting costs.
Their services are central and most upmarket stores lackthe frills. The clients who come here are
essentially looking at the low pricesof the items on sale. Therefore the longevity of this
differentiator is uncertain.

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Opportunities Technology: Technology has a lot to contribute to retailers in terms of in-
storeexperiences and retailers can use IoT, artificial intelligence, etc. to createvalue-adding
services for their customers for which they can charge apremium. Service personalization:
Consumers are searching for customized servicesthey are willing to pay extra for. Retailers
should expand on this willingnessto pay more and boost the quality of services they offer. New
Developing Markets: New developing markets and mall culture can bethe biggest opportunity for
the company. South of India: D-Mart can also open stores in the south and areas where nostore
is there.Threats People in large cities, in general, are particularly lethargic about leaving
theirhomes and often tend to shop online. So, companies such as Amazon andFlipkart are now
big threats to most retailers. Online start-ups are the hottest trend in India. Many of these are
aggregatorsthat cost-effectively put the manufacturer and the consumer together.
Thesecompanies are the emerging threats more so because in the aggregationindustry many new
brands are emerging mainly due to lower entry barriers. Global competitors. Competition
among Best Price & Reliance Retail. Unorganized retail is also a big threat. Government
Policies and regulations related to the retail sector. International Players who are willing to
open stores in India.

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Strengths Focus on the long-term: Damani, D Mart’s founder is an investor and hencethe
company has concentrated solely on long-term profits. This has resultedin the company
optimizing its returns through a pricing approach driven bydemand. Slow scaling: D Mart
began on a very low keynote and gradually took its timeto raise the ladder upwards. This gave
the company greater leverage anddeeper knowledge of its supply chain, as well as allowing them
to betterhandle the bottom line. Customer-Centered Management Approach : D Mart has a very
strongworkplace policy in place and is very open in its interactions with theemployees. They do
have a strong relationship with vendors andmanufacturers and are satisfied with stakeholders.
Discount policy: One aspect that sets D Mart apart from his rival isits massive strategy of
discounting. The store is selling vital items at a flatdiscount price that most rivals are unable to
match and this has helped themreach the market. Clear distinction based on price: D Mart
never adopted the trends set byother rival retail companies but believed in setting their own
trends. Througha simple price-based distinction they dominated the market and sold
theirproducts at much lower prices than rivals.Weaknesses  Focus on other places: D Mart has
concentrated mainly on the WesternStates and has a very small presence in the South, quite
unlike its rivals, whoare present everywhere. That has prevented them from gaining popularity in
the market. Slow growth: Nearly 16 years ago, D Mart established much before the retailboom
set a fire in India. However, owing mainly to its long-term outlook, ithas not been able to
dominate the market, even as many of the laterentrants. Low pricing sustainability: The
company has a zero credit policy and somanufacturers and suppliers offer them a much better
deal which is how thebusiness can afford the low prices that the rivals can not imagine. No
frills: D Mart follows a No-frills strategy wherever possible the emphasis ison cutting costs.
Their services are central and most upmarket stores lackthe frills. The clients who come here are
essentially looking at the low pricesof the items on sale. Therefore the longevity of this
differentiator is uncertain.

Opportunities Technology: Technology has a lot to contribute to retailers in terms of in-

storeexperiences and retailers can use IoT, artificial intelligence, etc. to createvalue-adding
services for their customers for which they can charge apremium. Service personalization:
Consumers are searching for customized servicesthey are willing to pay extra for. Retailers
should expand on this willingnessto pay more and boost the quality of services they offer. New
Developing Markets: New developing markets and mall culture can bethe biggest opportunity for
the company. South of India: D-Mart can also open stores in the south and areas where nostore
is there.Threats People in large cities, in general, are particularly lethargic about leaving
theirhomes and often tend to shop online. So, companies such as Amazon andFlipkart are now
big threats to most retailers. Online start-ups are the hottest trend in India. Many of these are
aggregatorsthat cost-effectively put the manufacturer and the consumer together.
Thesecompanies are the emerging threats more so because in the aggregationindustry many new
brands are emerging mainly due to lower entry barriers. Global competitors. Competition
among Best Price & Reliance Retail. Unorganized retail is also a big threat. Government
Policies and regulations related to the retail sector. International Players who are willing to
open stores in India.