Avenue Supermarts’ call with analysts on 22 July to discuss its results for the quarter ended June made for interesting listening.
Ignatius Navil Noronha, chief executive of the company—which operates the DMart chain of supermarkets—fielded around 90 questions on the three-hour call. Of those, almost 40 were to do with its online grocery business.
This was both odd and expected at once.
Odd since the business—DMart Ready—contributed just over 3% to DMart’s consolidated revenue of Rs 24,140 crore ($3.3 billion) in the year ended March 2021. And expected because DMart Ready, helped by the pandemic, more than doubled its revenue for the year to ~Rs 790 crore ($106 million). More impressively, despite this surge in sales, losses remained flat—at ~Rs 80 crore ($11 million).
DMart Ready’s good run continued in the quarter ended June, with its Ebitda Ebitda Ebitda Earnings before interest, taxes, depreciation, and amortisation turning positive.
Launched in Mumbai in 2017, DMart Ready allows customers to place orders online and pick them up from its network of kiosks, free of charge. Alternatively, it also delivers to homes for a fee that ranges between Rs 49 ($0.7) and Rs 79 ($1.1) per order.
DMart Ready is not cut from the same cloth as its big-spending peers such as BigBasket BigBasket The Ken For better or worse: The Tata-BigBasket marriage of convenience Read more —now majority-owned by the Tata Group—Reliance Industries’ JioMart JioMart The Ken A year after its launch, JioMart’s e-commerce book is still in its first chapter Read more , Amazon, SoftBank-backed Grofers, and Walmart-owned Flipkart. It is the only online grocer to stay away from free delivery regardless of the order value. And till recently, it also stood out among the pack by offering pickups. Amazon is now reportedly reportedly The Ken Amazon tries Whole Foods-like online grocery delivery at More stores Read more running a pilot in Bengaluru, allowing customers to pick up their orders from the More supermarket chain, which it co-owns.
DMart, founded by savvy equity investor Radhakishan Damani in 2002, is known for its penny-pinching ways and unwavering focus on its bottom line. This has helped it become India’s second-largest supermarket chain by revenue, after Reliance Retail Reliance Retail The Ken The Reliance Retail-DMart face-off over essentials Read more , and rack up a market capitalisation of Rs 2,32,800 crore ($31 billion).
