Online business

Dmart share price: Avenue Supermarts’ online business more than doubled in FY22, but loss widens

Mumbai: Avenue Supermarts, the operator of the DMart retail chain, said sales of its online grocery unit more than doubled to Rs 1,667 crore in FY22.

However, the net loss of Avenue E-Commerce, the six-year-old subsidiary of India’s largest retailer by market cap, widened to Rs 142 crore. The online retail brand – DMart Ready – had sales of Rs 791 crore and a net loss of Rs 81 crore a year earlier while operating only in Mumbai, according to the company’s latest annual report.

“In FY 2021-22, it expanded its service coverage to include more than 500 PINs in nine cities. AEL also operates a small-format grocery store under the DMart miniMAX brand. It has two DMart miniMAX stores – one in Mumbai and another in Hyderabad,” the company said in its report. “Avenue Supermarts has invested approximately Rs 492.76 crore in its online subsidiary,” he added.

As sales recovered to pre-pandemic levels at major retail chains in the January-June period due to low infection rates, a resumption of consumer mobility and the removal of all curbs Covid, the pace of growth of e-commerce channels for consumer goods has slowed compared to the previous two years. At the same time, brick-and-mortar retailers, including DMart and

Retail trade has seen increased growth in e-commerce. For example, the DMart Ready topline grew 52.7% year over year and 28% from the sequential quarter and also added three additional cities to online coverage.

“As consumer demand shifts to more digital platforms, established brick-and-mortar players are expected to learn and unlearn new tricks from existing commerce at the same time,” said Chirag Taneja, co-founder of the commerce tool. GoKwik electronics. “Assortment is key in grocery and offline retailers are used to having a wide basket of assortments to attract customers and have a larger shopping basket. But online, a more specific assortment associated to an aligned execution model such as hyperlocal or dark stores is the way to go.”

Over the past year, e-commerce discounts have been reduced for FMCG products as marketplaces and platforms focus on reducing losses, even as fast trade continues to grow among people who are not dependent on fixed monthly purchases.

“Companies, especially retailers that have underinvested in technology in the past, plan to make aggressive investments in their digital capabilities to support these tasks. However, simply redefining the value proposition will not be enough. Most of the new players are heavily funded and burn huge amounts of money on customer acquisition and growth,” said Dhianu Das, co-founder of Agility Ventures.

Unlike grocery startups Amazon and BigBasket, which rely on a delivery-based distribution model, DMart’s online business operates a hybrid model with delivery centers in areas where it has small stores where customers can also retrieve products they ordered online. DMart, which operates 284 stores, generated 27,454 rupees in revenue per square foot, almost three times that of its rivals in India.