NEW DELHI: Radhakishan Damani, the 61-year-old founder and promoter of retail chain D-Mart, was a legendary investor and share trader before he became a legendery entrepreneur. The stunning success of D-Mart is credited entirely to Damani. The public offer of D-Mart’s holding company Avenue Supermarts today made a spectacular debut on BSE, as its shares got listed at a 102.14 per cent premium. D-Mart is valued at Rs 39,400 crore, more than the combined market capitalisation of its two biggest rivals, Future RetailBSE -2.35 % and Aditya Birla Fashion.
Damani is a quiet man who keeps a low profile, but his winning traits are too evident to be missed. Below are his 10 approaches to business that led him to roaring success:
1. Keep an eye on the long term
Like Warren Buffett, Damani too has been a value investor who would take canny view of the long term. When he turned an entrepreneur, he retained the same approach and built D-Mart without relying on any quick shortcuts. For instance, he never leases property for his stores but buys it. In the long term, it saves him from a big rental outgo. This was a key factor behind the profitability of D-Mart.
2. Small is big
Damani started small and did not hurry to expand. Low scale gave him a better control of supply chain and allowed him to focus on profitability right from the beginning. In the 15 years of its existence, D-Mart has turned a profit each year.
3. Value your people
Damani began with buying a franchise of Apna Bazar. That was when he began building personal relations with vendors and suppliers. He values both and they never let him down. The stores never go out of stock.
4. Buy low, sell cheap
Damani knew what he was doing: offering people consumer products of daily use at heavy discounts. That became his only goal. One of his methods was to pay his suppliers and vendors within days instead of weeks which was the industry norm. They provided the goods at a cheaper rate to him in lieu of early payment. He passed on the cost benefits to his customers, which ensured consistent footfall.
5. Go local
Even though D-Mart is the most successful grocery retail chain of the country, Damani has confined it to the western states. One reason is his reliance on local supplies instead of elaborate supply chains.
6. Go slow
Though D-Mart started 16 years ago, it still has only 73 stores in a few states, a small number compared to those owned by Ambani and Biyani. Instead of rapid expansion, Damani adopted a slow pace which gave him his focus on profitability. That’s why D-Mart has not shut a single store since it started and generates higher per store revenues than the stores of Ambani or Biyani.
7. No frills
Damani knew the purpose behind his enterprise was to supply consumer goods at lower prices. He did just that, without wasting his energy on frills. His stores have limited range of products and have simple decor. People come for just one thing: lower prices. The trait reflects in his own appearance. He wears only white shirt and white trousers, for which he is called “Mr White and White”.
8. Ignore the herd
Damani had learnt and practised with success the art of not following the herd while he was an investor. As an entrepreneur, he has the same approach. There have been so many new-fangled ideas in retail, such as various e-commerce trends, which he did not give any importance. Fashions or trends cannot influence the man who knows what he wants and how he can get it.
9. Avoid credit
Credit and delayed payments in retail business are risky because they can badly impact your supplies and costs. Damani keeps away from credit and pays sooner than his suppliers expect.
10. Let your work speak
Damani keeps a low profile which affords him total dedication to his work. His slow and silent rise in a depressed sector is a mark of his single-minded focus on work. He has rarely given an interview to a TV channel or a newspaper.