Seminar report for partial fulfillment of mba finance post graduate programme

1. D-Mart-
Largest retail chain in
India
PRESENTED BY- TANVI
ROLL NO.-27642106331

3. INTRODUCTION:
 D-Mart is owned and operated by Avenue Supermarts Ltd. (ASL) – a company
founded by Mr.Radhakishan Damani on May 15,2002.
 D-Mart is a one-stop supermarket chain that aims to offer customers a wide range
of basic home and personal products under one roof.
 Each D-Mart store stocks home utility products - including food, toiletries, beauty
products, garments, kitchenware, bed and bath linen, home appliances and more -
available at competitive prices that are highly appreciated by its customers.
 The brands D-Mart Premia, D-Mart, Dutch Harbor, D-Mart Minimax, D-Homes,
etc are brands owned by Avenue Supermarts Limited.
 As on FY 2022 D-mart is currently operating 284 stores across India.
 Avenue Supermarts Limited launched its IPO in year 2017 which closed at Rs.299
and current share price as on October 15,2022 is Rs.4298.05

4. Radhakishan Damani
Mr. Radhakishan Damani is an ace Indian Investor and a self made Billionaire. He was a stock market
broker and operated a franchise of Apna Bazaar. Unconvinced by its business model, he started DMart
after setting up its first store in 2002.

5. 8 strategies through which D-mart is
operated :
 Strong Fundamentals
 Slotting fees
 Strong control on OpEx
 Partner with the Partner
 Sporadic spike v/s Sustained Success
 Organic Expansion
 Go-local- High Inventory Turnover Ratio
 Audience Suited for Brick&Mortar

6. STRONG FUNDAMENTALS:
 A stock market investor has an edge over others in understanding value
of business.
 Opening d-mart was a big strategic decision for Mr. Damani .
 In year 1999 Mr. Damani took franchise of Apna Bazaar but he was
unable to understand their business model so he dropped it.
 Mr. Damani went to US and studied business model of Walmart.
 Mr. Damani invested in stocks by studying company’s –
P/E Ratio
EBITDA
Net Margin
Return on Capital Employed and
Year on Year Growth and clearly knew if these aspects are controlled a
successful business is sure.

7. SLOTTING FEES:
Manufacturer-
Please d-mart
sell my soap
D-mart- OK I will sell
your product quickly
but you have to give
me SLOTTING FEES

8. What is slotting fees?
 A slotting fee — sometimes
referred to as a shelving fee, or
slotting allowance — is a cost
that manufacturers pay to place
their products on retail shelves.
 Slotting fees is that fees charged
from a manufacturer who wants
his product to be seen at eye
level on shelf of store.
 In retail business a shelf space
is costly thing and any store can
charge a rental amount as
slotting fees so that people can
eventually buy what they see
first.

9. D-mart after getting slotting fees which
is a lumpsum amount will decrease the
price of that product significantly from
MRP of that product and would be able
to quickly sell the soaps of that
manufacturer.

10. Strong Control on OpEx:
 What is OpEx?
OpEx or Operating Expenditure is the expenditure incurred on running the co.
 How d-mart control’s this expenditure?
1. By keeping low key interior -
You will never see any d-mart store inside a mall or any fancy d-mart store you
will be only able to see discounted products and huge crowd purchasing it.
2. More products in less space- D-mart efficiently utilizes it’s space by keeping
more products in less space.
3. Less billing counters and less Manpower .
4. Low maintenance interior.

11. Partner with the partner:
 Build strong relationships with partner so that purchase price can be kept to
minimum.
 Usually d-mart asks for two types of discounts from it’s suppliers :
1.) CASH DISCOUNT
Discount received at time of cash payment for purchase.
2.) VOLUME DISCOUNT
There is always difference between price of 1 kg product and price of 1000 kg
product as d-mart purchases in bulk quantity from it’s suppliers it asks for
volume discount.
 D-mart keeps its credit cycle short. It pays off its creditors in 7-10 days thus
maintaining good relations with them.
 D-mart directly purchases from supplier thus eliminating the middleman.
 Their main aim is to provide GOOD PRODUCT AT GREAT VALUE.

12. Sporadic v/s sustained success
Sporadic success
 Sporadic means occurring at few
intervals that is not happening in a
continuous manner.
 E.g.- Big bazar another retail
company offers discounts but only
occasionally like Diwali, Republic
day, Christmas etc. and so its sales
are also boosted occasionally only.
Sustained success
 Sustained means stability.
 E.g.- D-mart offers daily discounts
and thus maintains it’s sales on a
daily basis.
 Low prices are real edge of d-mart
which increases footfall at stores
ultimately increasing sales .

13. Who is d-mart’s customer?
Customer whose budget is low but has enough time
i.e. middle income persons.

14. Organic Expansion:
 Mr. Damani grew his business very slowly and steadily without any
haste.
 Firstly , he decided to control entire supply chain and control the
profitability.
 This is result that till date d-mart has never made loss and not even a
single store has been shut down.
 80% of d-mart’s stores are self owned and rest 20% are even taken at
lease of 15-20 years.
 D-mart stores are mostly opened in sub-urban areas in tier 2 and tier 3
cities where real estate prices are low.
 As d-mart owns it’s stores it does not have to pay rent and has saved
itself from a huge cash outflow of company.

16. How was d-mart able to purchase each and
every store?

17. High inventory turnover with local
items:
 India being a diverse country has various regional specific
goods.
 D-Mart grabbed this opportunity by stocking its stores with
area-specific products.
 D-Mart pooled the popular local brands of a particular
region in one place, making it more convenient for the
buyers to avoid going to the local general shops.

18. Audience suited for brick and mortar:
 E-commerce devastated local market badly and many small business’s
were shut down as people tend to order online.
 D-mart secured it’s brick and mortar strategy.
 D-mart operated itself in such manner and for those audience who is
habitual to visiting stores to buy groceries.
 D-mart mainly suited for Middle class and lower middle class who still
not purchase their groceries online.
 That customer goes to d-mart who wants to buy excellent product at
low cost.
 Thus d-mart operates majority of business in brick and mortar.

19. COMPARISON BETWEEN D-MART AND BIG BAZAAR
SHARE PRICE- Rs.
4838.05(As on 16.10.2022)
SHARE PRICE- Rs.3.60(As on
16.10.2022)

20. Conclusion:
Mr. Radhakishan Damani himself is a great personality, he is a man who
understands business model’s very well and has strong fundamental
knowledge of business’s which he got from investing in stock markets.
D-Mart’s case study creates awareness about the techniques and
strategies it uses especially for cost efficiency and higher sales.
Discounting is a superpower that turned D-Mart into a legend.
The Indian middle class is the most underrated customer segment in the
market , while most businesses focus on selling to the cash rich audience,
the disposable income of the middle class even today is a billion dollar
market that is just waiting to be tapped.
D-mart since its inception has never shut out even a single store and
continues to generate profits.