Avenue needs a q-commerce boost

The scorching pace of quick commerce is impacting the business of Avenue Supermarts.

- VIVEAT SUSAN PINTO

The convenience of speedy deliveries has meant shoppers visit Avenue's DMart stores less frequently now. The same catchments that were served by DMart stores, known for great discounts, are now also targeted by Blinkit, Zepto, and Swiggy Instamart. While the speed with which q-commerce has expanded may not have been anticipated, Avenue needed to have caught on to the changes in the market. Despite the data at its disposal, it has failed to come up with an e-retailing proposition.

Revenues from the online business grew at about 21.5% year-on-year in the nine months to December. Moreover, discounts from q-commerce retailers are matching those from Avenue's online channel DMart Ready. A comparison of grocery baskets in December last year revealed how competitive the q-commerce space had become with Flipkart Minutes' attractive offers. Not to be outdone, Zepto came up with the 'Super Saver', which, together with Flipkart Minutes, gave customers the best deals for orders bigger than ₹799. "For the first time, DMart Ready is not the cheapest option," wrote Vivek Maheshwari at Jefferies.

Losing the 'lowest prices' tag must have been hard for one of the country's most valued retailers. It had acknowledged in September that q-commerce was impacting its business, especially in the urban markets, and recently said sales in the metros could be impacted by at least 2%. In FY24, DMart Ready, Avenue's online channel, brought in just ₹2,899 crore or 6% of the retailer's topline of ₹50,788 crore.