The rise of DMart and Radhakishan Damani as the 2nd Richest Indian

Radhakishan Damani, popularly known as the 'Retail King of India' has been in the news recently for all the right reasons, most recently when an Bloomberg report stated that he is considering acquiring a controlling stake in India Cements. He is the founder of Avenue Supermarts Ltd, the parent company of D Mart, to which most of his wealth is tied up. While most of his billionaire compatriots saw a decline in their net worth Mr. R K Damani is one of those few people whose wealth has shot-up significantly during this pandemic, his net worth currently stands at $16.2 B up 68% this year.

So, what led to his phenomenal rise? let's dive deeper.

Mr Radhakishan was born in Bikaner, Rajasthan to a Marwari family in the year 1965. He first started his careers as a ball bearings trader but, had to shut shop after the untimely death of his father who was a stock market trader. He soon got into the stock market with his brother who himself was into the stockbroking exchange. Though his initial days in the stock market was not very profitable, he soon mastered the trade under the mentorship of Chandrakant Sampat, an renowned investor and took the bull by its horn. He for famous for the technique of short selling which was not very common at that time. After the Harshat Mehta scam during which he was on the verge of bankruptcy, he turned towards value investing and made a number of highly profitable investments. Some of his key investments include, 'GE Capital Transportation Industries', 'VST Industries', 'Somany Ceramics', 'Trent', '3M India' and so forth.

In the early 2000s, Mr Radhakishan quit the stock market as his primary job and forayed into the retail business. This came as a shock as he quit market at the peak of his career. He purchased a franchisee of Apna Bazaar- a cooperative unit in Mumbai in partnership with Mr Damodar Mall. 2 years later, Damani opened D Mart's first store in Powai.

While his competitors were focused on leasing stores and expanding rapidly, Mr Damani was inclined towards owning the land the store sits on, which saved a considerable amount in leasing costs in the future and wanted to expand conservatively. D Mart has a clear sight of who their customers are and how they wanted to run their business, its success is attributed to three main factors it focuses on, consumers, sellers, and employees. D Mart's target customers are middle-income households, it strongly banks on the sales technique of discounting, every product in the shelves are sold at atleast a minimum discount of 3% than its competitors. The mission of the company, as publicly claimed, is to provide the best possible value to their customers, so that every rupee spent on shopping with them by the customer, can give more value to the customer than anywhere else.

D Mart does not offer a huge variety of products to its customers but compensates it with discounted prices, it hugely banks on low margins to drive more sales and customers keep coming back as a result of low price and trusted brand name. Another pivotal factor contributing toward the success of D Mart is that it insists on sourcing products locally and does not have a elaborate supply chain which minimizes any supply side shock, especially in the time of this pandemic.

As of 31 March 2019, DMart has a total of 204 stores in 72 cities across 11 states in India. It has now grown to be the 3rd largest supermarket chain in India and has a net revenue of $3.26 billion (FY20). The super market chain is currently valued at Rs 155,546 crores making Mr R K Damani the 83rd richest person in the world and 2nd richest in India. With a loyal customer base and a promoter with superior business acumen, D Mart is all set to become the next big thing.

Mr Damani has a very low profile and is notoriously media-shy and gives no interviews, as the saying goes let your work speak for itself.