Radhakishan Damani is the visionary entrepreneur behind one of India’s largest retail chains,

DMart. As the founder and DMart owner, Radhakishan Damani has revolutionized the retail
industry with his astute business strategies and commitment to customer satisfaction with a
strong focus on offering quality products at affordable prices.

DMart is one of the largest chains of Hypermarkets in India. DMart offers a wide variety of food,
clothing, and home utility products at the most competitive prices you might have ever come
across. Through its 306 stores, DMart has established a strong presence in India. You can find
DMart stores in 11 states of India, including Gujarat, Maharashtra, Telangana, Andhra Pradesh,
Madhya Pradesh, Rajasthan, Chhattisgarh, National Capital Region, Punjab, Karnataka, Tamil
Nadu, Daman, and Uttar Pradesh.

Radhakishan Damani was 45 years old when he founded DMart in 2002. By then, he had already
made millions by trading in stocks. Damani’s decision to adopt unique strategies has made
DMart what it is today. For instance, where most other retail chains rent their businesses, DMart
owns each store. They have never closed any of their stores ever since they launched. Thanks to
the extensive research the DMart team does before opening each store.

Though it seemed tempting to foray into categories like fashion and electronics, DMart has
focused only on its core business, food and grocery. The retail chain hasn’t even launched its
private brand to increase sales. Even today, it is only third-party grocery products that DMart
stocks.
Who is Radhakishan Damani?
A Billionaire Investor from India, Radhakishan Shivkishan Damani, popularly known as RK
Damani, is a business magnate and DMart Founder (founder of Avenue Supermarts Limited). He
also owns Bright Star Investments Limited, an investment firm through which he manages the
Damani Portfolio. Bloomberg Billionaire Index ranked the DMart Owner as the 98th Richest
Person in the World (in 2021).

Born in a Maheshwari Marwari Family in Bikaner, Rajasthan (DMart Owner Native Place), RK
Damani wasn’t raised in a wealthy environment. The family lived in a humble single-bedroom
apartment in Mumbai since his father worked on Dalal Street.
Not much is known about Radhakishan Damani’s Education. He studied commerce at the
University of Mumbai; he gave up his studies after his first year at college and joined his father’s
metal rollers business. He took an interest in stock market trading after his father’s death.

RK Damani started his career as a stock broker. However, he soon realized that he had to invest
his own money if he wanted to make money in the stock market. In 1980, he started investing in
stocks named Mr. White and White. He was practising short-selling of stocks by being a part of
the bear cartel. In fact, during the 1990s, when Harshad Mehta’s Scam was in the limelight,
Damani made extensive profits through short-selling.

In 1999, Damani decided to take up a franchise of a cooperative department store called Apna
Bazaar (In Nerul). However, he was not convinced by its business model. So he started DMart, a
Powai store, in 2002. By 2010, DMart became a chain of hypermarkets with 25 stores. In 2017,
Damani went public and became the 4th Richest Person in India in 2020, with a net worth of
$16.5 billion. Today, Radhakishan Damani’s Net Worth is $21.3 billion.

How was DMart Founded?

After his successful stint in stock market trading, where he made millions by short-selling stocks,
RK Damani started investing in consumer retailing organizations. When owning a franchise of
Apna Bazaar did not appeal to him, he decided to open his chain of hypermarkets called DMart.
It all started in 2002 as a small store in Powai.

About two decades ago, when Damani founded DMart, the retail industry had seen many new
prominent entrants, such as Subhiksha and Big Bazaar. Most such retail chains had adopted a
rental model, spending large amounts on furniture and fixtures. The focus was largely and only
on retailing.

Although the entry into the market faced tough competition, DMart managed to stand out by
owning the land it operated on. Buying products in bulk at low prices and then selling them all
together made it easier for the DMart owner to stick to his ‘High Volume-Low Margin’ principle.
Also, he made sure DMart stuck to its core food and grocery business without diversifying into
the other markets.
Home » Earn Online » Radhakishan Damani: Success Story Of DMart Owner

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Radhakishan Damani: Success Story Of DMart Owner
September 25, 2023

D mart owner
Table of Contents
Who is Radhakishan Damani?
How was DMart Founded?
Growth of DMart
Impact and Awards
Towards Success and Beyond
Frequently Asked Questions
Radhakishan Damani is the visionary entrepreneur behind one of India’s largest retail chains,
DMart. As the founder and DMart owner, Radhakishan Damani has revolutionized the retail
industry with his astute business strategies and commitment to customer satisfaction with a
strong focus on offering quality products at affordable prices.

DMart is one of the largest chains of Hypermarkets in India. DMart offers a wide variety of food,
clothing, and home utility products at the most competitive prices you might have ever come
across. Through its 306 stores, DMart has established a strong presence in India. You can find
DMart stores in 11 states of India, including Gujarat, Maharashtra, Telangana, Andhra Pradesh,
Madhya Pradesh, Rajasthan, Chhattisgarh, National Capital Region, Punjab, Karnataka, Tamil
Nadu, Daman, and Uttar Pradesh.

Radhakishan Damani was 45 years old when he founded DMart in 2002. By then, he had already
made millions by trading in stocks. Damani’s decision to adopt unique strategies has made
DMart what it is today. For instance, where most other retail chains rent their businesses, DMart
owns each store. They have never closed any of their stores ever since they launched. Thanks to
the extensive research the DMart team does before opening each store.

Though it seemed tempting to foray into categories like fashion and electronics, DMart has
focused only on its core business, food and grocery. The retail chain hasn’t even launched its
private brand to increase sales. Even today, it is only third-party grocery products that DMart
stocks.

Who is Radhakishan Damani?

A Billionaire Investor from India, Radhakishan Shivkishan Damani, popularly known as RK
Damani, is a business magnate and DMart Founder (founder of Avenue Supermarts Limited). He
also owns Bright Star Investments Limited, an investment firm through which he manages the
Damani Portfolio. Bloomberg Billionaire Index ranked the DMart Owner as the 98th Richest
Person in the World (in 2021).

Born in a Maheshwari Marwari Family in Bikaner, Rajasthan (DMart Owner Native Place), RK
Damani wasn’t raised in a wealthy environment. The family lived in a humble single-bedroom
apartment in Mumbai since his father worked on Dalal Street.

Not much is known about Radhakishan Damani’s Education. He studied commerce at the
University of Mumbai; he gave up his studies after his first year at college and joined his father’s
metal rollers business. He took an interest in stock market trading after his father’s death.

RK Damani started his career as a stock broker. However, he soon realized that he had to invest
his own money if he wanted to make money in the stock market. In 1980, he started investing in
stocks named Mr. White and White. He was practising short-selling of stocks by being a part of
the bear cartel. In fact, during the 1990s, when Harshad Mehta’s Scam was in the limelight,
Damani made extensive profits through short-selling.

In 1999, Damani decided to take up a franchise of a cooperative department store called Apna
Bazaar (In Nerul). However, he was not convinced by its business model. So he started DMart, a
Powai store, in 2002. By 2010, DMart became a chain of hypermarkets with 25 stores. In 2017,
Damani went public and became the 4th Richest Person in India in 2020, with a net worth of
$16.5 billion. Today, Radhakishan Damani’s Net Worth is $21.3 billion.

How was DMart Founded?

After his successful stint in stock market trading, where he made millions by short-selling stocks,
RK Damani started investing in consumer retailing organizations. When owning a franchise of
Apna Bazaar did not appeal to him, he decided to open his chain of hypermarkets called DMart.
It all started in 2002 as a small store in Powai.

About two decades ago, when Damani founded DMart, the retail industry had seen many new
prominent entrants, such as Subhiksha and Big Bazaar. Most such retail chains had adopted a
rental model, spending large amounts on furniture and fixtures. The focus was largely and only
on retailing.

Although the entry into the market faced tough competition, DMart managed to stand out by
owning the land it operated on. Buying products in bulk at low prices and then selling them all
together made it easier for the DMart owner to stick to his ‘High Volume-Low Margin’ principle.
Also, he made sure DMart stuck to its core food and grocery business without diversifying into
the other markets.

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Growth of DMart
Unlike other retail brands that operated on a rental model, DMart owned every store it operated.
So, for the initial 15 years (until 2014), DMart operated its stores only in four states of India. It
was only after the company went public in 2017 that it expanded its presence across 11 states of
the country.

Efficient management of Inventory is one of the secrets behind the success of DMart. Instead of
placing importance on the presentation of products, they launch maximum products in less space.
This makes it easier for customers to find the products they need. Also, by using fewer cash
counters, they cut their employee costs.
The store-ownership model has also made DMart a company with low or no debts. Stocking up
inventory in huge volumes helps them offer huge discounts that keep their customers coming
back to them. They charge their suppliers something called Slotting Fee, which helps them place
their products on the shelves appealingly and attractively.

Offering quality products at affordable pricing has always been the principle on which DMart
has been operating. Hence, its marketing strategy is also based on the demands of its consumers.
Its USP is to sell products at prices lower than MRP (Maximum Retail Price). Here are the main
elements that form the core of the marketing strategy adopted by DMart:

Pricing: DMart’s ‘High-Volume Low-Margin’ business model has not only helped DMart stand
apart from its competitors but also helped form a strong bond with its customers.
Product Quality: DMart sources products only from reputed suppliers who stick to high quality
standards. The brand has managed to establish a reputation for quality that keeps bringing its
customers back to its door.
Customer Service: Providing knowledgeable and friendly assistance to each of its customers is a
practice that every staff member of DMart follows. In addition, the company has been improving
its overall shopping experience by implementing measures such as extended hours of operation
and home delivery of orders.
Location: The DMart team does A lot of research before every store’s opening. The locations are
usually near residential areas with low traffic to make shopping convenient for customers. This
has not only increased their foot traffic but also improved brand visibility.
Product Range: While sticking to its core business of satisfying the basic needs of its customers,
DMart manages to offer a variety of products such as food, clothing, and household items. The
product range keeps expanding with the changing demands of consumers.
DMart adopts a mix of digital and traditional advertising techniques to reach out to its target
audience. On one hand, they provide newspaper ads to create awareness about their products,
deals, coupons, and discounts. They also have a chatbot called ‘DMart Ready’ on Facebook
Messenger to clear queries of their customers and also implemented a loyalty program with
cashback and discounts to reward their frequent customers.

They have managed to avoid the glamour and fancy outlook of stores at shopping malls since
they target middle-income households. This also has helped them reduce unnecessary
expenditures and avoid high risks in sales. Further, DMart is not interested in expa”ding
geographically. Adopting the ‘Word-of-Mouth’ marketing technique ensures they don’t spend too
much on marketing.

Better School Brighter Futures is one of the CSR (Corporate Social Responsibility) efforts that
DMart is engaged in. Through this campaign, DMart has built an ecosystem to help students
understand concepts more easily. Improved education, research facilities, networking
possibilities, and mentoring are a part of this.

Impact and Awards

The retail industry of India is growing at a rapid pace. With consumers’ buying patterns and
behaviours changing steadily, there is an increasing demand for a wide range of products. DMart
offers a wide range of high-quality products at affordable prices by focusing on the core business
of providing essentials such as food, clothing, and household products.

DMart’s store-ownership model helps in reducing overhead costs. The store operates on its
‘High-Volume Low-Margin’ business model by sourcing products directly from the
manufacturers. By offering products for basic day-to-day needs, DMart has achieved consistency
in business, thereby avoiding the risk of high demand fluctuations.

DMart was one of the significant Indian firms to make a record opening on the NSE (National
Stock Exchange) when it posted its IPO as Avenue Supermarts Ltd. The company achieved a
$39,988 crore valuation when the stock market closed on March 22, 2017. DMart was ranked 33
on BSE’s list of recorded organizations with a market capitalization of $114,000 crore on 21 st
November 2019.

DMart Retail Grocery: When it comes to price-sensitive customers, the one brand that always
had appeal was DMart. Go to the DMart store on Sunday afternoon, and you’ll see the huge store
filled with customers stocking household items. For many households in north and north-west
India, DMart has emerged as their preferred place to shop. The staggeringly low prices, fully
stocked products, and wide product range, from non-food FMCG to food & grocery, to general
merchandise, have made it a go-to shopping stop for many households in India.
How does DMart Retail Grocery dominate the food and grocery markets? How is it possible to
sell products at a low price and make a profit? Well, let’s find out. By the late 1990s, Mr.
Radhakrishnan Damani had founded DMart. He is one of the more successful and well-known
value investors in the Indian equity markets. After a couple of years of research, he started a
grocery retail chain. He wanted to primarily focus on the value segment.
In the year 2000, Mr. Damani founded a retail chain called DMart. Almost 8 years after DMart
Retail Grocery was established, it only had ten stores. The early days of DMart were modest.
Since its founding, DMart has operated its corporate offices out of a small area that was
originally one of the company’s early stores for several years.
But Damani was very clear on a few aspects. He wanted to replicate the model of Walmart,
which is the high volume, low margins model. He wanted his company to run with positive unit
economics. It entered IPO in 2017 with an IPO size of ₹ 1870 crore. Today, DMart Retail
Grocery market capitalization stands at ₹ 2,49,166 crore.

Table of Contents
DMart Retail Grocery
Key Product Categories
D’Mart’s Business Model – Low Prices!
Owning rather than Renting
The Model of Cluster Expansion
Low Prices
DMart vs Reliance Retail
Conclusion

DMart Retail Grocery

Key Product Categories
DMart offers varied, everyday-use items to its customers with a prudent product mix. The
products on offer at the stores can be broadly classified into three categories – Foods, Non-foods,
and general merchandise and apparel.

Foods – Groceries staples, processed foods, dairy, frozen products, beverages & confectionery,
and fruits & vegetables. The revenue contribution from this category in FY2022 and FY2023 is
56.86 percent and 56.03 percent, respectively.

Non-Foods (FMCG) – Home care products, personal care products, toiletries, and other over-the-
counter products. The revenue contribution from this category in FY2022 and FY2023 is 19.74
percent and 20.93 percent, respectively.

General Merchandise & Apparel – Bed & Bath, toys & games, crockery, plastic goods,
Garments, Footwear, Utensils, and Home Appliances.The revenue contribution from this
category in FY2022 and FY2023 is 23.4 percent and 23.04 percent, respectively.

D’Mart’s Business Model – Low Prices!

When it comes to the consumers of India, Damani understood what is required to attract them –
heavily discounted products. The business model “Every Day Low Cost / Everyday Low Price”
was therefore in line with this.

Owning rather than Renting

One of the major things that separates DMart Retail Grocery from any other retail stores in India
is that they own their stores rather than renting. They usually operate stores with a lot of space
compared to their competitors. The average area per store is around 41,358 square feet.

If you would have noticed, stores like Big Bazaar and Reliance Retail will be in malls and
shopping complexes and residential areas. Whereas the locality of DMart will usually have a
different angle.

DMart Retail Grocery will build stores in densely populated localities where there is heavy
footfall. When it comes to the scarcely populated localities, DMart will buy cheap land outside
the city and build a huge retail store space where they can provide a large variety of products. In
both cases, DMart Retail Grocery stores will be standalone 1-story structures.

This strategy’s basic idea is to give them the flexibility to build expansive stores that resemble
warehouses to effectively manage their inventory and supply chain. Moreover, to reduce rent
costs. Rent for a typical retail establishment accounts for five to seven percent of sales. For
DMart, this is a one-time expense.

The Model of Cluster Expansion

Another factor that separates DMart Retail Grocery from its peers is its cluster expansion model.
When you take Reliance, for instance, they won’t be able to make the profit margin DMart does,
nor can they handle huge footfall in a single store. So, they can only increase their volume by
expanding the stores rapidly.

Now let’s look at the cluster expansion model of DMart Retail Grocery the way Walmart does.
DMart Retail Grocery only expands stores in clusters. First, they establish a distribution center in
a new location, and then they’ll construct stores around the distribution center. This way, they
can manage their supply chain and inventory effectively.

Low Prices
Brands pay DMart Retail Grocery a fee to have their products on their shelves to increase their
sales, as DMart has high footfall in the stores. We refer to this charge as a slotting fee. Slotting
fees contribute to DMart’s earnings, enabling them to provide larger than customary discounts.

DMart also pays its vendors and manufacturers as quickly as possible, unlike any other retailer.
The industry norm usually is around 30-40 days of payment, whereas DMart Retail Grocery pays
within just 7 days. Moreover, DMart Retail Grocery stores look like shabby warehouses. That
way, DMart saves a lot of money rather than spending on ambiance or customer experience.
Last but not least, DMart Retail Groceryonly stocks the best-selling items in a given area and
focuses on understanding them rather than offering a wide selection of goods. By doing this, it
saves a ton of money on inventory while maintaining high sales figures.

DMart vs Reliance Retail

Let’s take a look at the FY23 numbers to understand where both companies stand

DMart Reliance Retail

Revenue 41,833 crore 2,30,951 crore
EBIT 3,249 crore 13,994 crore
Operational Store area13.4 mn sq. ft. 65.6 mn sq. ft
EBIT margin 7.8 % 6.1%
Operating profit made per sq ft 2,424.6 per sq ft 2,133 sq. ft
Revenue made per sq. ft 31,096 per sq. ft 35,205 per sq. ft

Although DMart Retail Grocery produces less revenue than Reliance Retail, it has a superior
EBIT margin. Even though Reliance Retial’s revenue is more than five times the revenue of
DMart, DMart’s higher operating profit per sq. than Reliance Retail shows it’s the superior
business model. So one can conclude that DMart Retail Grocery is much more profitable and
efficient than Reliance.