Good Morning Dear MMS Reader,
Some years ago, when I used to live in Mumbai, a huge DMart supermarket opened up a stone's throw away from my home. It was an instant hit. I don't recall it being anything other than packed to the rafters. And I never dared to enter it on a Sunday—I bet you could never find Waldo in there. Waldo probably wouldn't be able to find himself. The lure was the cheap pricing. DMart, India's second largest supermarket chain, is rather unique in the industry in that it only stocks the best-selling brands and consistently offers low prices, rather than hosting sales. DMart's existence is a never-ending sale. I keep wondering whether that store's footfall has reduced since the pandemic. It might have, a tad, since the company has been pushing its online grocery business, DMart Ready, which it launched in 2017. DMart Ready is again unique in that it isn't a pure online play—a key part of its strategy are hundreds of kiosks across the country where customers can pick up the items they ordered online. It may sound archaic in today's doorstep-delivery-in-15-minutes world, but it's an attractive option for DMart's customers, considering DMart Ready does not offer free deliveries, regardless of the order amount. Now, DMart Ready contributed just over 3% to DMart’s consolidated revenue of Rs 24,140 crore ($3.3 billion) in the year ended March 2021. But it more than doubled its revenue over the previous year, raking in ~Rs 790 crore ($106 million). Crucially, its losses stayed flat at ~Rs 80 crore ($11 million). In fact, in the quarter ended June 2021, DMart Ready's Ebitda turned positive. But DMart Ready is up against big-spending peers such as Tata Group-owned Bigbasket, Reliance Industries’ JioMart, SoftBank-backed Grofers, Walmart-owned Flipkart, and Amazon. Will its contrarian approach be enough to win the race?
