Two by Two Dmart versus the challengers at the gate
Dmart, the retail group in India, is absolutely number one on vision, execution, and consistency. Dmart opened its first supermarket in Mumbai’s Powai suburb in 2002. Like Walmart in the US, it adopted a deep discounting strategy, offering its customers low prices every day. Today, it has 381 stores. In spite of offering its customers the deepest discounts, Dmart’s net profit numbers beat those of its global peers.
Yet analysts and investors have been becoming increasingly bearish about Dmart’s future strategy. They argue that what got it from 2002 to 2024 might not necessarily take it to, say, 2034.
One big reason is quick commerce. Armies of underpaid contract delivery workers rushing from dark stores managed by notionally independent owners on behalf of younger companies like Zomato, Swiggy, Zepto, Big Basket, and even Flipkart are challenging the conventional wisdom on retail.
Forcing Dmart to pause and blink.
What should it do? Stick to what it knows and does best? Or learn new digital and delivery tricks in its middle age? With only an estimated 5% of the $500 billion urban market for food and groceries currently penetrated by organised and modern retail, the way Dmart goes has profound implications for India.
To discuss this, hosts Rohin Dharmakumar and Praveen Gopal Krishnan invited Govind Shrikhande, former managing director of Shoppers Stop, overseeing all its formats, including Shoppers Stop, Hypercity, Crossword, Homestop, Beauty Formats - MAC, Estee Lauder, Air Port & Duty Free Retail, etc. Govind has spent over 40 years in the retail sector, having been part of the launches of Denim and Arrow, the relaunch of Vivaldi and the turnaround of Shoppers Stop. He is currently an Independent Director on the Board of a few Companies and a mentor to a few start-ups.
Our other guest is Seetharaman G. Seetha, who is the deputy editor at The Ken and also leads The Ken’s retail coverage. He’s written quite a few stories on Dmart over the years as well.
Welcome to episode number 18 of Two by Two!
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Additionl listening:
Is Zepto a gold medallist or a bronze medallist?
Swiggy needs to reclaim its past glory
Additional reading:
Dmart and the supersizing imperative
Zudio wanted Dmart’s apparel shoppers. Now Dmart is hurting
Dmart changes its mind on store size. Again
Dmart is not used to being in a funk for so long
What if the quick-commerce warehouse was a supermarket?
Dmart and investors rekindle their love
Dmart’s e-commerce bet has gone from counterintuitive to obsolete
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This episode of Two by Two was produced by Hari Krishna. Rajiv CN, our resident sound engineer, mixed and mastered this episode.
New episodes are released every Thursday. So follow the show wherever you get your podcasts, and tell us what you think of the show.
You can write to us at twobytwo@the-ken.com with your thoughts and suggestions.