DMart retreats from seven online markets as delivery wars escalate
Indian retailer DMart is shrinking its online grocery footprint to core metros, signalling that traditional discount chains are retreating from unprofitable markets amid a fierce rapid-delivery war.
DMart has shuttered its online grocery operations in seven cities, reducing its DMart Ready e-commerce footprint to 11 major metropolitan areas. The strategic retreat accompanied the release of the Indian retailer's underwhelming quarterly earnings. “During the quarter, we have discontinued our operations in seven cities which were marginal contributors,” said Vikram Dasu, chief executive officer of DMart Ready.
The decision to abandon smaller markets underscores the difficult economics of Indian online grocery delivery. The sector is currently dominated by rapid-delivery specialists Eternal Ltd., Zepto Ltd. and Swiggy Ltd., which operate fundamentally different business models. DMart has deliberately abstained from entering the 10-minute delivery segment, instead leveraging its infrastructure to ship groceries within a few hours, a strategy tethered to its legacy big-box supermarket format and cut-rate pricing.
For investors, the closures signal a disciplined approach to capital allocation at a time when the rapid-delivery landscape is becoming increasingly crowded and expensive. Deep-pocketed global giants are escalating their push into the Indian market, raising the cost of customer acquisition. Amazon.com Inc. and Walmart Inc.’s Flipkart are continuing to invest heavily in rapid delivery, directly challenging the domestic startups that initially pioneered the 10-minute model.
Analysts caution that this competitive pressure is not a temporary phase. Macquarie analysts Aditya Suresh and Baiju Joshi highlighted the long-term threat in a May report. “We see rising and persistent competitive intensity for years, not quarters, from multiple dimensions,” they wrote.
Rather than engaging in a subsidized delivery war, DMart is leaning into its traditional physical retail strengths. While the online footprint contracts, the company’s brick-and-mortar expansion continues steadily. DMart opened three new stores during the quarter, taking its total store count to 503, according to Asawa. This divergent growth rate highlights a clear strategic pivot: the retailer is prioritizing its proven store network over pouring capital into unprofitable digital markets.
