Facing growing competition in India’s quick commerce market, Avenue Supermarts Ltd. has restructured its e-commerce operations by shutting down DMart Ready services in 7 cities that made only a limited contribution to the business.
The move reflects the company’s focus on improving efficiency and strengthening its presence in key markets.
“During the quarter, we have discontinued our operations in 7 cities which were marginal contributors,” Vikram Dasu, Chief Executive Officer of DMart Ready, said in a press release. He added that the company will now focus on serving larger metropolitan areas.
Following the closures, DMart Ready now operates in 11 cities.
The strategic shift comes as competition in India’s rapid delivery market continues to increase, with Amazon and Flipkart expanding their investments in a segment currently led by Eternal Ltd., Zepto Ltd., and Swiggy Ltd. “We see rising and persistent competitive intensity for years, not quarters, from multiple dimensions,” Macquarie analysts Aditya Suresh and Baiju Joshi wrote in a May report.
For the 1st quarter, DMart reported a net income of ₹9.3 billion ($98 million), falling short of market estimates. The company posted revenue of ₹183.43 billion during the same period.
Chief Executive Officer Anshul Asawa said the retailer recorded flat growth at its older supermarket stores in major metropolitan cities, while stores in non-metro markets continued to perform well.
Unlike several competitors, DMart has chosen not to enter the 10-minute grocery delivery segment. Instead, it continues to offer deliveries within a few hours through its DMart Ready platform. The retailer remains focused on its large-format supermarket model known for value pricing.
During the quarter, the company also opened 3 new stores, taking its total store count to 503, according to Asawa.
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