DMart In danger with fierce online competition from JioMart, Flipkart & Amazon
2 min read
Radhakishan Damani founded DMart needs to pull up its socks to withstand the competition of rivals – JioMart, BigBasket, Amazon Fresh/Pantry, and Grofers. The untoward pandemic has caused a paradigm shift in the consumer’s purchasing patterns. Consumers have shown their inclination towards online shopping.
Consequently, retailers have pumped up their online operations.
Promoted by Avenue Supermarts Ltd., DMart, has to ramp up its e-commerce network, expanding its online presence to more cities. The pandemic also took a toll on one of the largest hypermarkets of India – DMart. The large customer base which it had attracted due to low prices and product assortment has undergone a transformation.
Why should DMart expand its e-commerce segment?
According to a report by Kotak Institutional Equities, DMart should bring other cities under its e-commerce coverage to maintain the tempo of its revenue. Widespread competition is likely to put a check on DMart’s margins to block its way of further expansion. Customers’ preferences are changing as they are exploring new and different buying options. DMart’s e-commerce services are restricted to customers of Mumbai. To compete with the likes of JioMart and others, it must quickly accelerate its operations and provide a far & wide reach.
Trouble looming over DMart: –
E-commerce giants such as Flipkart, Amazon, and Reliance Retail are carrying on a Kirana digitization program. There is a high plausibility of DMart facing stiff competition from local grocers as their product acquisition cost will tend to deescalate. Subsequently, the footfall of the one-stop supermarket chain might tremble, giving local stores a way ahead.
DMart offers the lowest prices for almost half of the product categories. It faces increasing price competition from its contenders like JioMart, BigBasket, Grofers & Amazon Fresh/Pantry. As the potency to compete is rising, DMart had the lowest price for only 11 out of 31 products in September.
About DMart –
DMart is one of the most common and largest chains of hypermarkets in India. It has been in the industry for the past 18 years. The first branch of DMart was established in Powai’s Hiranandani Gardens after which there was no looking back for owner Radhakishan Damani. As of 31st December,’19, it had 196 stores in 72 cities across 11 states in India.
Financials FY19 –
• Revenue: $2.71 billion
• Net Income: $133.85 million
As of 21 November 2019, the market capitalization of DMart was nearly ₹114,000 cr. How well do you think DMart will prep itself to emerge as numero uno?
