Avenue Supermarts, the operator of the popular DMart retail chain, witnessed impressive sales of its online grocery unit, crossing the Rs 2000 crore mark in FY23. However, despite the positive sales growth, the company faced an increase in losses due to its expansion into newer geographies. Let’s dive deeper into the details.
According to Avenue Supermarts’ latest annual report, its online subsidiary, Avenue E-Commerce (AEL), generated sales of Rs 2202 crore, marking a substantial 32% increase. Unfortunately, the net loss also expanded, reaching Rs 194 crore. Comparatively, in the previous fiscal year, DMart Ready, the online business brand, recorded a loss of Rs 142 crore on sales of Rs 1667 crore.
The report highlighted the company’s strategic decision to expand its service coverage, adding 10 more cities during the financial year 2022-23. Among the new cities included were Chandigarh, Jaipur, Chennai, and Ghaziabad. As a result, the total number of cities covered by DMart Ready’s services now stands at 22.
It’s worth noting that Avenue Supermarts has invested approximately Rs 713 crore in its online subsidiary, which commenced operations six years ago, showcasing the company’s commitment to its digital venture.
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Breaking Barriers: DMart Unique Approach to Online Grocery Delivery
Apart from its online grocery business, AEL also operates DMart MiniMax, a small-format grocery store chain. In FY22, it had two DMart MiniMax stores, but during the previous fiscal year, it expanded its footprint by adding 13 more stores. This expansion indicates the company’s efforts to cater to different customer segments and strengthen its offline presence alongside its online operations.
What sets DMart apart from grocery startups like Amazon and BigBasket is its unique hybrid model for online operations. While its competitors rely primarily on a delivery-based distribution model, DMart’s online venture combines the convenience of deliveries with the option for customers to pick up their ordered products from the nearest small stores. This innovative approach allows DMart to provide a more flexible and efficient service to its customers.
DMart’s success is further evident in its impressive financial figures. With annual sales of Rs 41,833 crore, the company runs a network of 324 stores, generating an impressive revenue of Rs 31,096 per square foot. This figure is nearly three times higher than that of its competitors in the Indian market. Additionally, DMart boasts 49 distribution centers and 10 packing centers, further enhancing its operational efficiency.
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Despite facing widened losses due to its expansion efforts, DMart’s online business achieved a significant milestone by surpassing the Rs 2000 crore mark in sales. The company’s strategic expansion into new cities, coupled with its unique hybrid model, has contributed to its success and strong market position. With its commitment to quality and innovation, DMart continues to be a major player in India’s retail landscape.
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