Billionaire conjures up sam walton with $6 billion indian chain, priyanka singh (taj pharma)

SECTIONS

ET APPS

ENGLISH

E-PAPER

FOLLOW US

Retail

Home Advertising

Industry

Auto

Consultancy / Audit

Banking/Finance Education

LATEST NEWS Militants attack army convoy, two soldiers injured

Cons. Products

Hotels / Restaurants

Energy

Ind'l Goods/Svs

Property / C'struction

Retail

Healthcare/Biotech

EOD

M ARKET STATS

More

Search for New s, Stock Quotes & NAV's

SENSEX

29,620

Services

Travel

ET Home › Industry › Services › Retail

04:05 PM | 31 MAR

SIGN-IN

NIFTY 50

-26.92

9,173

0.00

GOLD (MCX) (Rs/10g.)

USD/INR

28,451.00

64.85

-91.00

-0.07

CREATE PORTFOLIO

Download ET MARKETS APP

CHOOSE LANGUAGE

ENG

Billionaire conjures up Sam Walton with $6 billion Indian chain

By Bloomberg | Apr 01, 2017, 01.16 PM IST

Post a Com m ent

READ MORE ON » | Radhakishan Damani | Future Retail Aditya Birla Fashion | Future Retail | Arvind Singhal | Amazon.Com | Ajay Piramal Anil Ambani

By Saritha Rai and PR Sanjai Radhakishan Damani may be India’s Sam Walton. Like the Wal-Mart founder, he’s a selfmade billionaire from humble beginnings with a successful formula for retailing.

So successful that when Damani’s 15-year-old company, Avenue Supermarts Ltd., went public last week, the stock price more than doubled on the first day of trading in Mumbai, valuing his direct family’s interest at about $3.6 billion. The reason has much to do with Damani’s strategy of offering knockdown prices on everything from lentils to laundry powder Convert webpages to pdf online w ith PDFmyURL

in multistory hypermarkets on India’s urban fringes.

By appealing to homemakers with cheap, reliable staples and giving them ample parking in convenient locations, Damani has not only successfully countered the threat from online retailers, but beat them on earnings. Amazon.com Inc., the global giant that’s investing $5 billion in the Indian market, and Flipkart Online Services Pvt., the biggest Like

Share 4M people like this. Sign Up to see w hat your friends like.

domestic e-commerce company, are yet to

Damani and his direct family have financial interests in Avenue

make money in India, whereas Avenue Supermarts said it had net profit after tax of

Supermarts amounting to about 60 percent of the company.

3.2 billion rupees ($49.3 million) in the year ended March 2016.

NSE BSE

Company Summary

Future Re…

1.30 (4.49%)

“The low-cost ethos that was embedded into the Wal-Mart chain by Sam Walton has

Tax planning:

become the hallmark of Damani, who’s ingrained it into his Avenue Supermarts,”

How to complete all tax work before March 31

said Arvind Singhal, chairman of retail consultancy Technopak Advisors Pvt., which tracks retail trends in India. “Like Wal-Mart, Damani has stuck to a single format and peddled a significant proportion of private-label goods from the very beginning.”

Stag Profit Avenue Supermarts’ shares jumped as high as 650 rupees before closing at 641.6 rupees on their March 21 debut, compared with an initial public offering price of 299 rupees. The share sale raised 18.7 billion rupees, attracted bids for 106 times the quantity available, and was the best IPO performance in India in four years. The shares closed at 631.85 rupees in Mumbai Thursday, valuing the company at 394 billion rupees ($6 billion).

Convert webpages to pdf online w ith PDFmyURL

For 61-year-old Damani, a former stockbroker who was raised in a one-room apartment in a Mumbai tenement block, the listing catapulted Damani’s wealth beyond that of Ajay Piramal, Anil Ambani and Kapil Bhatia, according to the Bloomberg Billionaires Index. Damani and his direct family have financial interests in Avenue Supermarts amounting to about 60 percent of the company.

Soft-spoken with a preference for white clothing, Damani eschews media attention. He earned hundreds of millions of dollars from successful stock market investments that he used to kick-start a bricks-and-mortar retailing business just when many merchandisers were focusing on e-commerce. Damani wasn’t available for an interview, an external spokesperson for the company said.

Urban Sprawl The retail chain, with its 129 D-Mart stores in more than 40 cities, is now more valuable than local rivals Future Retail BSE 4.32 % , Aditya Birla Fashion and Trent Ltd. combined.

Most Read

Most Shared

Most Commented

BS-III impact: Rebates, freebies help 2-wheeler makers clear inventory

Stores typically cater to bargain shoppers in the heartlands of India’s urban sprawl.

Importantly, the land is acquired before real estate prices in the area have surged, said Arun Kejriwal, director at KRIS, an investment advisory firm.

Bikes at the price of smartphones? Here's a list of bikes you can buy in the BS-III discount sale

“We observe our customers and plan for them,” said Neville Noronha, managing director and

Planning to buy a two-wheeler? Ride it today at cheapest rate Petrol and diesel price cut by Rs 3.77 and Rs 2.91 per litre India swings to net power exporter as PM Narendra Modi looks to block China More »

chief executive officer at Avenue Supermarts, adding that D-Mart’s business model has evolved since its first store opened in 2002.

It centers largely on everyday low prices -- a concept reminiscent of Wal-Mart Stores Inc., the Bentonville, Arkansas-based company started by Sam Walton in 1962. Avenue’s approach is also to procure merchandise at low prices and to avoid relying on sporadic promotions on specific products, the Mumbai-based company said in a regulatory filing in September.

Convert webpages to pdf online w ith PDFmyURL

‘Unfancy Stores’

“D-Mart has unfancy stores,” said Technopak’s Singhal. “If other retailers became counterintuitive and chased retail glamour by opening stores in malls, launching multiple formats and going national, D-Mart has been intuitive by sticking to the very basics.”

It doesn’t hire high-profile executives, pay “stratospheric” salaries or overspend on marketing and advertising -- all of which are hallmarks of Indian retailers, Singhal said.

“It’s not like Damani has stumbled on some magic formula -- he hasn’t,” Singhal said. “These should have been the basic rules for every retail business in India.”

D-Mart outlets follow a simple design: wide aisles on white-tiled floors under fluorescent tube lights. Elevators move shoppers and their trolleys between levels, with groceries and food staples located below household goods and sports equipment, and textiles and soft furnishings on the floor above.

No Time to Clean “D-Mart offers me the best prices, and the grains are very clean -- which is a big advantage over other retail stores in the vicinity,” said Varsha Nilesh Benke, a 35-year-old office worker, while on a twice-monthly weekend shop at the Seawoods store, 35 kilometers (22 miles) from downtown Mumbai. “Since I’m a working woman, I don’t have time to clean grains.”

Benke said she’s happy to purchase apparel online, but prefers to see for herself the rice and pulses she needs before buying. “D-Mart also offers free gift-wrapping services, which makes it convenient to buy a gift here,” Benke added.

Retiree V.P. Sharma, who lives in Navi Mumbai, a satellite town east of the city, also says DMart has a distinct advantage over online retailers. “They show something on the net and deliver something else,” he said, while shopping at the same store. “Also, the delivery at odd hours, making e-commerce very inconvenient.”

Convert webpages to pdf online w ith PDFmyURL

India hasn’t yet reached its retail renaissance, Boston Consulting Group said in a March 21 report, in which it predicted the South Asian nation will become the world’s third-largest consumer market by 2025. Domestic consumption will triple to $4 trillion by the middle of the next decade as rising affluence drives consumer behavior and spending, including in nascent agglomerations like the ones D-Mart is focusing on.

“Damani may not have the size and scale of Wal-Mart, but certainly Damani is Sam Walton in the making,” said Kejriwal at KRIS. Stay on top of business news with The Economic Times App. Download it Now! DON'T MISS any stories, follow us on Tw itter Follow

FROM AROUND THE WEB

Singaporeans Prove That Safety On Paths Is Possible

How Singaporeans Are Building George Michael died of natural Passive Income With Amazon causes, says coroner

Move Happy

AceProfitsAcademy

The Straits Times

MORE FROM ECONOMIC TIMES

Ask why Lalu cannot contest elections: PM Modi Convert webpages to pdf online w ith PDFmyURL

6 interesting things about the new UP CM, Yogi Adityanath

I value money because I have seen tough times—Ajinkya Rahane

Recommended by

From Around the Web

More from The Economic Times

Online Trading: Your Recession-Proof Skillset Pattern Trader

Actress Kalpana given state funeral, celebrities pay homage

17 Photos Of Melania That Donald Trump Has Kept Secret

Railways mulls underground rail link to Hyderabad airport

LifeDaily.com

Learn My Email Marketing Business Changed My Life!

BRO to build tunnels on Bomdila-Tawang road

Cashflow Ignition Formula

Best Deal Ever. $150 Qoo10 Gift Card When You Sign Up For ..

China cautioned over Silk Road projects in disputed regions

MoneySmart.sg

Recommended by Ad

Create Your Website Free VPS Heaven Easy Drag and Drop Tool to Create Your Own Website in Mintues. Personal & Business Sites.

READ MORE ON Âť | Radhakishan Damani | Future Retail Aditya Birla Fashion | Future Retail | Arvind Singhal | Amazon.Com | Ajay Piramal Anil Ambani

Sign up for ET Daily Newsletter Your must-read business news wrap of the day.

DAILY

enter your email id Sample New sletter

Convert webpages to pdf online w ith PDFmyURL

Sign Up

Add your comment here

Get a Quote

Browse Companies Get Quote

Type Company Name

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z | 1 2 3 4 5 6 7 8 9

Browse M utual Funds A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Live Market

New s

Portfolio

Mobile

Live TV

New sletter

Commodities

Speed

QnA

Blogs

Alerts

RSS

Other Times Group news sites

Living and entertainment

Hot on the Web

Services

Times of India | इकनॉिमक टाइ स ઈકોનોિમક ટાઈ સ | Mumbai Mirror Times Now | Indiatimes नवभारत टाइ स | महारा टाइ स ಜಯ ಕ ಟಕ | Lifehacker Gizmodo | Eisamay | IGN India NavGujarat Samay

Timescity | iDiva | Zoom | Luxpresso | Gaana | Happytrips | Cricbuzz | Get Smartapp

BSE Sensex | Gold rate today Sensex | Gold rate Income Tax Slabs | Income Tax calculator RBI Monetary Policy

ads2book | Gadgetsnow | Free Business Listings Simplymarry | Astrospeak | Timesjobs | Magicbricks | Zigw heels | Timesdeal | dineout | Filmipop | Remit2india | Gaana | Greetzap | Techradar | Alivear | Google Play

Networking itimes | MensXP.com

About us / Advertise w ith us / Terms of Use & Grievance Redressal / Privacy Policy / Feedback / Sitemap / Code of Ethics / / Disclaimer

Convert webpages to pdf online w ith PDFmyURL

Copyright © 2017 Bennett, Coleman & Co. Ltd. All rights reserved.