1.

EXECUTIVE SUMMARY

The aim of this case study is to evaluate how the DMART retail market in India is changing
the dynamics in retail industry and to get insights into its performance. In terms of market size
and economic power, Indian retailers are among the most active and rapidly growing
businesses. Market size and economic power, Indian retailers are among the most active and
rapidly growing businesses.

DMart is a fast-growing Indian retail supermarket company that aims to provide clients with a
wide choice of necessary home and personal things under one roof, all while offering high-
quality goods at reasonable prices. Customers like DMart because they receive more bang for
their buck and have more bargains than their competitors. Middle-income people and families
who want to meet the bulk of their basic consumption needs are their target market. DMart has
gained the title "Indian Wal-Mart" because to its corporate philosophy, long-term vision, price
strategy, cautious focus, disciplined model, ACT formula, imaginative planning, and product
categories.

Clients, merchants, and workers are the three points of support that help DMart's monetary
and business achievement. Information is acquired from publically accessible sources on the
web to produce subjective assessments. Monetary and market reports, then again, come
from reliable sources. The elements, illustrations, and factors that added to DMart's outcome
in India are additionally inspected in this model.

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 2.INTRODUCTION
Indian retail industry is under transition today, bringing a lot of transformations in retailing
business. The shoppers enjoy the privilege of shopping the goods and services required by
them in a variety of formats to meet their expectations.

The phrase retail comes from the French term retaillier, which means "cutting off, trimming,
and dividing." Tailoring (1365) was originally recorded as a French term meaning "small-
quantity sale." In retail, it meant "cutting off, shredding, and paring." It is defined by Gilbert, D
(2013) as a company that concentrates its marketing efforts on gratifying the final client
through the organisation of selling items and services as a way of distribution. The retail
industry has never been more visible as it is now. Aristide Boucicaut's Bon Marche, the world's
first true department store, is said to have opened in Paris in 1852. (Lamba, 2003)

From US$ 0.8 trillion in 2020, India's retail sector is expected to reach US$ 1.5 trillion by
2030. Due to the introduction of various new businesses, the Indian retail industry has become
one of the most dynamic and fast-paced industries. It accounts for more than 10% of the
country's GDP and employs around 8% of the workforce. India is the fifth-largest shopping
destination in the world.

India is ranked 73rd in the United Nations Conference on Trade and Development's 2019
Business-to-Consumer (B2C) E-commerce Index. According to the World Bank's Doing
Business 2020 report, India is the world's fifth-largest retail destination, ranked 63rd.

As far as retail, India

is the world's fifth-
biggest objective.

India is set sixteenth

in the FDI Confidence
Index (after US,
Canada, Germany,
United Kingdom,
China, Japan, France,
Australia,
Switzerland, and
Italy).

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 3.MAIN CONTENT

3.1 PHASES OF RETAIL EVOLUTION IN INDIA

While offering their items and administrations to clients, shippers participate in a scope of
activities that permit the items to be really sold. This climate is utilized for arranging, breaking
mass, keeping up with things, going about as a correspondence channel, capacity, publicizing,
and an assortment of different undertakings. During the pre-autonomy time frame, the nation's
laid out corporate houses, outstandingly material producers, ventured into retail through
organization possessed or diversified outlets.
The retail revolution in India can be explained in four stages as below:

No Phase Year Significance

Manufacturers who want to build a presence in
1 Initiation Pre 1990 retail have the upper hand.

It was not the manufacturer looking for an

2 Conceptualization 1990 - 2005 alternative sales channel, but pureplay retailers
who entered the retail market, to expand pan-India

In terms of growth, new player entry, and creation

3 Retail Expansion 2005 - 2010 of new formats, this is the most dynamic phase of
the Indian retail business.

While recognising the industry's current issues and

Consolidation and
4 2010 onwards rivalry, retail chains are likely to focus on
Growth
consolidations and expansion.

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3.2 MARKET SIZE

In February 2021, the retail business accomplished 93% of pre-COVID deals, as indicated by
the Retailers Association of India (RAI); shopper durables and fast help cafés (QSR) developed
by 15% and 18 percent, separately. The FMCG business gave indications of recuperation in the
July-September 2020 quarter, with a 1.6 percent year-over-year development, following a 19
percent misfortune in the January-March 2020 quarter. The improvement in the quick shopper
products (FMCG) business was additionally an impression of the generally speaking
macroeconomic condition, which has improved as the economy has been changed and
prohibitive approaches have been lifted.

As indicated by a report by Bain

and Company in a joint effort with
Flipkart named "How India Shops
Online 2021," the e-retail market in
India is supposed to develop to
US$ 120-140 billion by FY26,
developing at a pace of around 25-
30 percent each year over the
course of the following five years.
India at present has the world's
third-biggest web based business
market (just behind China, the US).
It is guessed that new-age planned
operations organizations would
convey 2.5 billion Direct-to-
Consumer (D2C) merchandise by
2030. Online utilized car exchange
infiltration is supposed to grow by
9x in the following 10 years.
Regardless of the pandemic,
Amazon, Flipkart, and other
vertical players sold $9 billion in
stock during the 2020 celebration season.

3.3 DEVELOPMENT SCENARIO

In India, retail IT organizations that offer types of assistance like advanced records, stock
administration, installment frameworks, and operations and satisfaction innovations are
blasting. Financial backers emptied US$ 843 million into 200 little and average sized retail
innovation new businesses in the initial nine months of 2021, a 260 percent increment over a
similar period in 2020.

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The Department for Promotion of Industry and Internal Trade expressed in November 2021
that it is fostering an administrative consistence entry to smooth out consistence processes
among organizations and the public authority. In October 2021, India's dealers rose by 14%
over the earlier year. GoKwik, a New Delhi-based internet business empowering firm, got US$
5.5 million from Matrix Partners India in September 2021. Dukaan, another startup that assists
organizations with digitizing tasks, got a US$ 11 million speculation drove by 640 Oxford
Ventures.

As per the Department for Promotion of Industry and Internal Trade, India's retail exchanging
pulled in FDI value inflows of US$ 3.61 billion from April 2000 to June 2021. (DPIIT).
Numerous organizations have put resources into the Indian retail field as of late, attributable to
the expanded interest for shopper items in different ventures like buyer gadgets and home
apparatuses.

Financial backers spent US$ 1.4 billion into D2C new businesses somewhere in the range of
2014 and 2020, as indicated by an exploration by PGA Labs and Knowledge Capital. In 2020,
the area got US$ 417 million in speculation.

Freshpik, another experience exquisite cuisine shop in India, opened in October 2021 to
upgrade Reliance Retail's staple area in the super top notch classification. Plum, a direct-to-
buyer magnificence and individual consideration brand, has reported plans to open more than
50 disconnected stores in India (by 2023) to extend its client base. Enormous Bazaar sent off
its two-hour conveyance administration in minor urban communities including Bhopal,
Mangalore, Raipur, Ranchi, Guwahati, Kanpur, Lucknow, and Varanasi in May 2021, and has
seen an expansion in orders as of late.

3.3.1 GOVERNMENT INITIATIVES

The Indian government has found a way various ways to improve the retail business. Coming
up next are a couple of them:

To support advanced installment take-up in the country, the RBI reported plans for another
structure for retail computerized installments in disconnected mode in October 2021. The
Andhra Pradesh government disclosed its retail stops program for the years 2021 to 2026 in
July 2021, with an objective retail speculation of Rs. 5,000 crore (US$ 674.89 million) over the
accompanying five years.

To permit E-trade organizations and global dealers to offer Made in India shopper things, the
public authority might loosen up FDI regulations in food handling.

The public authority of India has endorsed 100% FDI in internet based retail of items and
administrations by means of the robotized technique, carrying clearness to the activities of E-
trade ventures in India.

The public authority's accentuation on working on computerized framework in Tier 2 and Tier
3 business sectors is valuable to the business.

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Retail and discount exchanges will from this time forward be named MSMEs, as indicated by
the Minister of MSME. Under RBI guidelines, retail and discount exchange will presently be
qualified for need area credits.

3.5 DMART: THE INDIAN RETAIL CHAIN

Road Supermarts Limited, laid out in India, is the sole proprietor of DMart outlets. DMart is
a grocery store chain that consolidates an assortment of home and individual things into one
helpful area. Food, toiletries, excellence products, garments, kitchenware, bed and shower
cloth, home machines, and other family things are for the most part accessible at DMart
stores. Bed and shower, dairy and frozen, leafy foods, ceramics, toys and games, child's
garments, women's articles of clothing, attire for men, home and individual consideration,
day to day fundamentals, food and staples, and DMart private name brands are among the
organization's item classes. DMart works across Maharashtra, Gujarat, Daman, Andhra
Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab,
and Rajasthan, with more than 196 stores.

Mr. Radhakishan Damani and his family established DMart to satisfy the extending needs of
the Indian family. DMart has a deep rooted presence in 271 destinations across Maharashtra,
Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil
Nadu, Punjab, and Rajasthan, having opened its first shop in Powai in 2002. Our business
keeps on growing, with more offices arranged in more urban areas, as we endeavor to be the
least expense retailer in the districts we serve.

Road Supermarts Ltd is the sole proprietor of the DMart store chain (ASL). The
organization's base camp are situated in Mumbai. ASL possesses the brands D Mart, D Mart
Minimax, D Mart Premia, D Homes, Dutch Harbor, etc.

3.5.1 DMART’S GROWTH STORY

The Radhakishan Damani, a financial backer and broker turned business person, is liable for
DMart's prosperity. Road Supermarts claims the DMart corporate store, which was
established in 2002. It started with two stores in Maharashtra and has now developed to 220
outlets and 225 DMart Ready stores in 11 states and one association region. DMart was
additionally one of a handful of the organizations whose offers was presented at a right
around 114% premium to its IPO.

DMart might be short in store count, however it more than compensates for it in benefits.
Dmart acquired Rs. 211 crores in the monetary year 2014-15, beating both Reliance Retail
and Future Retail, which acquired Rs. 159 crores and Rs. 153 crores, individually. In FY
2020, Avenue Supermart created a net gain of Rs 1,349.89 crores. You might have likewise
heard that DMart as of late turned into a Rs. 2 trillion firm.

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3.5.2 DMART’S BUSINESS MODEL

 Product Mix

The categories of products available at DMart are Foods, Non-foods and General
Merchandise, Apparel, and other daily products. One may find this bizarre as retail
chains also expand their product offerings to electronics, jewellery etc. DMart has
done this to confirm that the products they sell are in demand throughout the year.
Thus, maintaining consistency in sales and lower period. This also meets their
targeted low and middle-class’s daily household needs.

Furthermore, DMart has realised the necessity of acknowledging diversity in many

countries. this is often an element that DMart has discovered and customised its
product range to suit the expectations of consumers within the states where it
operates. DMart strengthened its reliance on local suppliers in each location to attain
this. rather than employing a centralised paradigm, this aids them in achieving their
goals. DMart avoids private brands by dealing directly with the producers, despite the
very fact that it gets its items locally. Despite the actual fact that customers have
fewer selections than at other chains, well-known products still sell.

 Brick and Mortar Stores

DMart is one of the intriguing corporate store that possesses the areas where it works.
Damani found this at Walmart and took on it. 90% of the stores are claimed inside
and out by DMart, with the rest of rented for a very long time. DMart has spent
around Rs. 23 billion on its own property and stores up to this point far.

This may be called retail self

destruction because of the
significant expense of claiming a
business as opposed to leasing.
DMart, then again, has had the
option to save a lot of cash that
would have been spent on lease in
any case. It likewise safeguards
them from paying high leases in
malls to different shops.

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 Strategic Locations and Designs

DMart has always eschewed shopping malls and their exorbitantly expensive rents.
As a result, it instals its stores in residential areas on purpose. These choices are made
with the poor and middle classes in mind as well. The bulk of their stores are in tier II
and tier III cities, as well as on the outskirts of big cities. When you go into a DMart
store, you'll see that they've kept things simple. Additionally, money that would have
been spent on high-priced interior design has been saved.

 Relationship with Suppliers

DMart's relationship with its suppliers is ultimately what distinguishes it from the
competition. In all retail outlets, credit is accepted. DMart processes credit card
payments on the 11th of each month and always guarantees a 15-day payment period.
Other gamers employ a credit system that lasts 60 days. This also helps them
negotiate reduced rates for their products with suppliers.

 Discounted Products

All of the above techniques lead to Dmart's ultimate approach for Indian markets,
which is discounts. DMart sells its items for 6-7 percent less than other retailers, and
up to 10% less than the manufacturer's suggested retail price. This attracts even more
people from the lower and middle classes to their businesses.

Savings on inflated rent, designs, and solid supplier ties are passed on to their clients.
This helps them to keep a loyal client base because their customers are already aware
that their preferred items are cheaper at DMart. This offers them a competitive edge
over local kiranas.

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 4.ANALYSIS AND INTERPRETATIONS

The company of operates in three main product categories which are:

4.1 PRODUCT MIX

Food: Containing groceries, staples

processed food, diary, frozen products,
beverages & confectionery, and fruits and
vegetables.

Non-Food (FMCG): Containing home

care, personal care, toiletries, and other
OTC products.

General Merchandise and Apparel:

Containing bed &bath, toys & games,
crockery, plastic goods, garments,
footwear, utensils, and home appliances.

4.2 RETURNS
In the following the chart we can see the Growth of Returns on Capital Employed & Return on
Assets. All the ROCE & ROA values shows the positive incremental trend from 2016 to 2020.

Return in percentage
ROCE ROA
27.6

25.9

23.8
20.4
17.6

14.26
13.74

13.64
11.74

11.02

FY1 6 FY1 7 FY1 8 FY1 9 FY2 0

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4.3 DMART STOCK PRICE TREND

Ever since it went IPO in 2017, In just four years, demand share price shot up by 800 percent
going from just ₹616 to more than ₹5000 in 2021. And the most astonishing thing about
DMart is that in its 19 years of existence, it had not closed a single store until the pandemic hit.

4.4 PROFIT

1350
FY20
24675

936
FY19
19916

785
FY18
15009

483
FY17 PAT
11881
Revenue
318
FY16
8575

There is a positive growth in Revenue & Profit After Tax (PAT) from the year 2016 to 2020.

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4.5 OPERATING & FINANCIAL SUMMARY

The above figure all the

operating ratios and
values shows the
positive incremental
trend from the year 2016
to 2020.

4.6 EXPANSION STRATEGY

D-mart follows a 70-30

strategy, where 70% of
capex happens in a place
where they already have a
presence. It helps them to
cater their customers in a
better way. In the map we
can see the expansion from
the year 2002 with two
stores to the year 2020
with 214 stores in India.

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4.7 SWOT ANALYSIS
Strength
Best in class operational
efficiency compared to peers
Relationship with suppliers
and logistics provider
Strong execution capability
inidentifying locations for
store opening
Weakness
Key management personnel
risk and promoter risk
Asset heavy modelfor
expansion
Rapid expansion is difficult
since largely follows
ownership model.
Opportunity
Huge opportunity for growth
in new states apart from
Maharashtra and Gujarat
To capitalize on online
opportunity through D-Mart
Ready stores
Scope to increase centralized
sourcing
To increase share of private
label brands
Threats
Pricing aggression from web
only players
Failure to identifying and
buying key properties
Sharp increase in realestate
prices
Hyper-Inflationary situation
impacting food and groceries
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 5.LEARNINGS

 Use of Strategies like Deep Discounting, Product Assortment & Store Ownership model.

 All the functional and operating ratios and values for DMart shows the positive incremental
trend from 2016 to 2020.

 The stock price trend shows the positive growing trend in just a period of four year from
2017 to 2021.

 The Revenue & PAT shows the incremental trend for DMart from 2016 to 2020.

 The major reasons for consumers to visit the DMart is low prices, better value for money
and more offers and discounts.

 India’s e-commerce industry and companies like Flipkart and Amazon, the best-performing
IPO in latest company records is a brick-and-mortar grocery store and yet, D-Mart’s
stringed on profitability gave instructions to each bodily and on-line retailers, each of that
have stumbled withinside the previous few years. India’s e-commerce industry is sooner or
later developing up and moving in the direction of a focal point on profitability. And in its
15 years of operations, it has never closed, moved or shut down a store.

6.CASE SOLUTION
Companies like Reliance Industries Limited and Amazon India are competing to buy the
Future Group (The company that runs Big Bazaar, Brand Factory stores in India).

Tata's just announced their entry into the retail sector with the acquisition of Big Basket.
Flipkart and Grofers, on the other hand, are all concentrating on grocery penetration.

To keep its customers loyal, DMart, as one of the most well-established companies in its area
in terms of business, must increase its digital marketing.

DMart uses its financial clout, extensive real estate holdings across the country, and extensive
distribution network to offer its customers the best quality at the best price. As a result, it has
become one of India's most popular tourist destinations. As a result, it has become one of
India's most successful retail firms.

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With Covid-19 here to stay for a while and the entrance of other behemoths like Reliance
Retail, Amazon India, JioMart, and Walmart-owned Flipkart, things are certain to change in
the next decades, and DMart should focus on covering all of its bases.

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