Profit

D-Mart has emerged as a profitable business, and its financial performance reflects the same. A
prime reason for this profitability is the efficient supply chain, accurate inventory management,
and high inventory turnover ratio that forms a robust operational foundation together.
D-Mart has announced to invest ₹300 crores in tech enhancements this year. It involves
upgrading its e-commerce platform AEL. The company reports a 25% increase in online orders
during the last six months. So by implementing AI-based inventory management would help
optimize stocks and reduce waste.
Besides these, the company, D-Mart, consciously implements sustainability policies into its
practices, believing environmental responsibility is part of a firm's social responsibilities and, to
a certain extent, the long-term way to profitability. Sustainability as incorporated into core
operations will allow for resource efficiency while reducing waste output and lowering overall
effects on the environment in achieving needs for customers.
Some of the key sustainable strategies that D-Mart has adopted to improve its profitability
while remaining committed to environmental and social responsibility are as follows
Eco-friendly Products
 Dmart has introduced several articles that are made from recycled plastic/fabric/yarn.
Some of the product categories where such articles are introduced: planters and plates,
shopping bags, pillows, bath towels etc.
 Below is the data shown for the sales of recycled or reused material to the total materials
sales.
  Dmart is able to achieve this kind of growth by constantly sharing industry best practices
with suppliers that enable them to adopt policies and procedures, which lead to reduced
environmental impact and social equity.
Cluster based expansion approach:
As D-Mart employs cluster based approach for its expansion strategy it has following
contribution in sustainability:
 Reduced Transport emissions: By establishing stores in close proximity to existing
distribution centers, It minimizes the distance that goods need to travel, thereby it lowers
fuel consumption and carbon emissions.
 Catering to Local Needs: Due to it’s targeting to densely populated localities, D-Mart
adapts its product offerings to meet regional demands, reducing the need for extensive
long-distance shipments of specialized goods.
Waste Management Practices
D-Mart's endeavor to reduce as much waste and incorporate recycling techniques is a statement
of its environmental impact reduction ambitions and operational effectiveness.
1. Waste Segregation and Recycling:
 D-Mart guarantees source segregation of plastic packing material and paper
waste generated from its stores and packaging units.
 This waste is stored securely and handed over to authorized recyclers for proper
processing and recycling.
2. Use of Hydraulic Baling Machines:
 D-Mart has installed hydraulic baling machines at 255 locations, which
compress waste materials like plastic and paper into compact bales.
 The benefit of using this bailing machine is that it prevents loose plastic littering,
promotes better hygiene and also reduces the frequency of transportation trips to
recyclers, thereby cutting down on Scope 3 emissions (emissions related to
transportation).
3. Recycling Metrics:
 In the fiscal year 2023-2024, DMart handed over the following quantities of waste
to authorized recyclers:

Type of waste MT of Waste handed over to

authorized recyclers
Paper Waste 64,843 MT

Plastic Waste 5,437 MT

 Post-Consumer Plastic Waste 8,021 MT

E-Waste 19 MT

These figures demonstrate DMart’s active role in recycling and reusing materials, reducing
landfill contributions.
Below are few examples that how this sustainable practices have contributed in D-Mart’s
profitability and competitive advantage:
1.Efficient Procurement and Supply Chain:
 The AEL Model is, in simple words, the aggregate operations and funding that Avenue
E-commerce Limited, a subsidiary company manages D-Mart's online business through
the brand name "D-Mart Ready," and its parent company Avenue Supermarts Limited,
who manages the company's offline outlets of D-Mart. The aggregate AEL Model looks
to harmonize the efficiencies, profitability, and sustainability between its operations of
both online and offline segments. A precise summary of the major constituents of the
AEL Model is as under:

Feature Description Benefit

Centralized Procurement AEL purchases merchandise Streamlines operations and
and assets from ASL to avoids duplication of
ensure consistent product procurement efforts.
availability.

Cost Recovery with AEL reimburses ASL for all Ensures ASL’s profitability
Markup costs, with an additional while allowing AEL to
markup of up to 3%. operate competitively.

Economies of Scale Combines offline and online Reduces per-unit costs and
procurement for bulk optimizes resource use.
purchasing.

Operational Synergy AEL utilizes ASL’s supply Minimizes additional

chain, distribution centers, investments and enhances
and inventory systems. efficiency.

Seamless Integration Provides consistent products Enhances customer

and pricing across online and experience and loyalty.
offline platforms.

Sustainability Focus Reduces overstocking, Supports sustainability goals

minimizes resource wastage, and reduces environmental
and optimizes logistics for
 lower emissions. impact.

2. Cloth Bag Policy

 DMart’s practice of distributing cloth bags as an alternative to single-use plastics can be a
fine illustration of sustainable practices leading towards profitability and competitiveness.
 DMart's practice of distributing cloth bags as an alternative to single-use plastics can be a
fine illustration of sustainable practices leading towards profitability and competitiveness.
 The program also stimulates the customers to buy the cloth bags. It is a further source of
revenue as well as it is increasing the use of reusing. The longer time the reduced amount
of disposable plastic bags are used; thus, these decrease procurement and waste
management expenses and enhance profitability.

This all-embracing sustainable strategy reflects the fact that D-Mart is in no way taking a
departure from its core competency of operating an efficient profitable business but instead just
integrating sustainability as part of their operations. As a result of this balance of profitability
and the environment, D-Mart has not only survived today's competitive marketplace but also
enjoyed incredible growth, even at these times. This improves its operational efficiency and
enhances the brand reputation of the company, thus ensuring its long-term survival and
sustainability in the dynamic business environment.
References:
1. Annual business report of D-Mart for FY 2023-2024: https://www.bseindia.com/xml-
data/corpfiling/AttachHis/14f569a2-0850-4e73-aa38-69494b1142cb.pdf
2. Annual business responsibility and sustainability report for FY 2023-2024:
https://api.dmartindia.com/corporate/content/file/v1/2/83LhSqYX0UN1lmPM4ILlZbrM1
721913928/Business%20Responsibility%20and%20Sustainability%20Report%20for
%20FY%202023-24.pdf
3. Article published on D-Mart: https://www.indianretailer.com/retailers/dmart