India’s best-known value retailer — DMart — finds itself at the crossroads as it eyes the next chapter of growth after close to 25 years in operation. The shift from value-to-convenience in urban markets has forced the country’s second-biggest retailer after Reliance Retail to get aggressive with its e-commerce bet – DMart Ready.
Once just a side project in a business largely built on offline operations, DMart Ready is increasingly becoming a crucial piece for the retailer. DMart’s parent Avenue Supermarts has infused Rs 175 crore into subsidiary Avenue E-Commerce, which runs DMart Ready, as it looks to strengthen its online operations.
This come in the backdrop of online home deliveries gaining ground across sectors. Industry sources say that the company is rewriting its e-commerce playbook, which has crossed revenue of Rs 3,000 crore in FY25, looking to go beyond the 25 cities it is currently operational in.
The strategy is to develop an omnichannel model, sources said, with e-commerce expected to reach consumers wanting deliveries at home, while the stores will continue to cater to those keen on shopping offline. Both channels will continue to offer steep discounts, with a seamless profile in terms of assortment including grocery, apparels and general merchandise. As such, DMart is opening more of its new stores in smaller towns and cities, where offline retail is growing, while DMart Ready is focused on larger cities and metros, where instant gratification has become the norm. At the end of FY25, DMart had a total of 415 stores, adding 50 stores in the period, the highest in four years.
The shift in strategy also comes as DMart grapples with margin contraction. Both operating and profit margins shrank to their lowest in three years in the March quarter, amid investments in improving service levels, paying higher wages and dealing with competition. The e-commerce pivot is also timed with the entry of the CEO designate, Anshul Asawa, in the company, who will take charge of core retail operations in the next 4-5 months. Asawa will formally take over as CEO & MD of Avenue Supermarts, the parent firm of DMart, in January next year, following the exit of incumbent Neville Noronha.
“Our DMart Ready business is growing extremely well in key metro towns. We have shut down several pick-up points (PUPs), however, our home delivery channel is growing strongly and has more than compensated for any loss of sale of the PUPs,” Noronha said while giving an update on online operations during the firm’s March quarter results this month.
Experts say that the company will have to do more if it has to take on quick-commerce players, who’ve raised the stakes in terms of delivery timelines, assortment and expansion into more categories and neighbourhoods in recent quarters. A report by global brokerage Bernstein said that q-commerce will grow at around 75-100% year-on-year outpacing offline retail, which will grow in the low teens.
“Q-commerce is uniquely positioned across proximity, pricing and selection. And it is well-positioned to capture a substantial share of $250-billion in terms of grocery market that the top 40-50 cities in India account for at the moment,” Bernstein said.
G Chokkalingam, founder of Mumbai-based firm Equinomics Research, said, that DMart Ready would need to amplify its efforts to be visible in the competitive online retail market.
“DMart has taken some time to wake up to the challenge posed by q-commerce players, it will need to move quickly on that front if it hopes to make significant headway online,” he said.
Noronha said that the DMart Ready model is scalable and relevant to the metro city shopper.
“With the DMart store business supplemented by our refocused DMart Ready presence in select towns, our ability to serve discerning value shoppers will only strengthen over time. However, profitability for the standalone online segment could be some time away,” he added.