DMart’s e-tail arm still in the red, but sales are growing

DMart's online venture essentially has multiple delivery centres or pick-up points in catchment areas, where it has a store, so that customers can order online and pick it up.

MUMBAI: Avenue Supermarts, the firm that runs DMart retail chain, saw its online sales more than double during FY19 to Rs 144 crore even though it operates in just one market — Mumbai.

The country’s most valuable retailer by market cap, however, posted a net loss of Rs 51 crore in the two-year old ecommerce venture.

“We entered this business on a pilot basis since we thought we can learn from it and also be part of the channel ecosystem. We can’t comment on its growth strategy as it’s still an experiment for us,” Neville Noronha, CEO of Avenue Supermarts, told ET.


A year ago, its online business — DMart Ready — posted sales of Rs 44 crore with net loss of Rs 48 crore, according to its investor presentation filed on the BSE. Unlike etailers such as BigBasket and Grofers, which rely on delivery based distribution model, DMart's online venture essentially has multiple delivery centres or pick-up points in catchment areas, where it has a store, so that customers can order online and pick it up.

Within physical retail channel, DMart has better operation metrics such as cost to sales or invested capital than Aldi and Lidl, the German retailers that are often seen as benchmarks for discount retailing and run some of the leanest retail operations globally.

In fact, DMart stores generated higher revenue per square foot of $530 compared with $450 for Walmart Inc in FY19. Even in India, it generates nearly three times the revenue per retail square feet than other grocery rivals such as Big Bazaar and More.
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