Demart and Big Bazaar entered the Indian retail business almost a year apart at a point of time competing with Demart in every state city and even small town in India Big Bazaar has suddenly disappeared today because it started one year before Demart in 2011 Even though Big Bazaar grew fastest in India with 250 stores in 2011, Demart was able to set up only ten stores during this time. Looking at the difference between the two groups, it seems that Big Bazaar is not a real competitor to Big Bazaar in 2011 with only 10 stores, Big Bazaar business is not even close to Demart in India even in 2022. Big Bazaar has become the largest business chain and has grown into a company with a valuation of 2 lakh crores. On the other hand Big Bazaar has sunk in debt of more than 20 thousand crores and closed their business in India. Due to the simplification of business strategy, today Demart stands as number one in this business and Big Bazaar is also this Demart. I am also going to tell you today what are the reasons for sinking more losses so please note carefully. Radhakrishna Dhamani who had earned a few hundred crores of rupees in the stock market till 2001 in 2002 suddenly changed his stock market business to retail business and opened two small retail stores in Maharashtra for those who make investments. There is good knowledge on two things that is number one long term growth that is after you invest in any business even if it doesn’t give you immediate profits.
But if you invest in a good business you will definitely get good profits in the long term.
Number to compounding effect means that it takes ten years for you to earn one crore rupees it will not take much time to turn into two crores. This is called compounding effect. If you want to know more about this, then comment below. And you may have a doubt why I am telling you all this now. You will understand a little further in the video. Radhakrishna Damma is very clear about what they are going to sell and what kind of customers they are going to target because in any business the more clear they are about their product and to whom it is to be sold, the faster the business will grow because Demart products are what they want from the beginning. They wanted to sell essential goods only to the poor middle class people, that’s why D Mart stores are very simple and close to the middle class people in the city outskirts without any fuss. After growing to the level of branded products like trousers, they stepped into a new venture at the same time as Big Bazaar Big Bazaar started Kishore only thought was that till then people in India used to go to many places to buy household essentials like groceries, supermarket, electronics, showroom, fashion. They used to go to shopping malls So he wanted to establish a store to find all of them in one place, that is Big Bazaar. Finally as he thought the first Big Bazaar store was opened in Kolkata in 2012.
In fact Big Bazaar was a bigger success than he thought because till then Indian people did not know much about One Plus One offers like 50% discounts when big bazaar gives offers people buy everything they need in big bazaar everything is fine, big bazaar is getting good profits at the expected time. Observing all this, Big Bazaar founder Kishore started expanding his company faster than Demart so much so that in 2002 it expanded to only 10 stores, but Big Bazaar which started one year before Demart expanded to more than 200 stores and opened stores in every city in India. Big bazaar expanded very fast but in the process of expansion some wrong decisions were taken and big bazaar is not in the market today. Dmart which expanded slowly has become the king in the market today. The reason for this is that dmart itself buys the required land and constructs a building and establishes a store there, so due to this dmart does not need to pay rent but maintenance charge, but Big Bazaar is not like that every store they open is run on rent. It does not borrow the required money from its business it takes enough money only from the profits coming from the already established stores and establishes new stores. Here you may have a doubt. If the profits for establishing a new store do not come, then Demart will stop setting up new stores, that is why S will stop. 2002 From 2011 to 2011 Dmart was able to set up only one store, but so far not a single store opened by Dmart was running in profit, but on the other hand the founder of Big Bazaar, Kishore, took loans for all the new stores he opened.
Having such a building is how important these businesses are to play. In the financial prices that came in 2008 both dmart and Big Bazaar were affected. But the mistake made by Big Bazaar is that because every store they set up is in the city center the rent and maintenance are very high. Due to the financial crises of 2008 even though Big Bazaar has established more than 200 stores it has already sunk in debt of more than four thousand crores. That is, D Mart, which had only 10 stores in 2011 has expanded very rapidly to almost 300 stores by 2022. This is called the compounding effect. As we have discussed in the video starting, it does not take as much time to turn one into ten as it takes to turn ten into one hundred. Radhakrishna Dhamani who knows well for stable growth has been billing his business as slow and study with the same principal. If Big Bazaar was half submerged due to the financial crisis in 2008 it was completely submerged due to the corona blow in 2020. During the corona time, the debts of this company increased from four thousand crores to more than 20 thousand crores. It is the best in the market. By giving deals and discounts it has lured all the customers to its side so much so that in business even Jio Mart started by Mukesh Ambani cannot compete with D Mart because any item we buy in D Mart is available at 10 to 15% less price than all the stores outside.
Reason number one is that this company settles the payment in 15 to 20 days for those who supply goods to Demart if you take other companies like Big Bazaar Jio mart it takes 60 to 90 days so the farmers and the contractors who supply the goods will give a little discount on the MRP of the goods given to Demart. Due to giving the same discount given by the farmers today we can find goods at lower prices in Demart than all the shops. If no other company like Big Bazaar can do the same thing, S cannot do it. Because to do that, the goods placed in the rack must be emptied immediately. That can be done only at Demart. After all if geomat big bazaar gives you three options you will understand that you will shop in it you will understand how difficult it is for dmart in the country, many people think that they will get more profit if they sell to more people and many people focus more on this but they know that they can get more traffic by paying less price. Good profits come due to following. Today from Radhakrishna Dhamani who founded D Mart to Kiran Kumar who founded Lalita Jewellery.they are showing dots to their competitors and jumping in their business. For Expression your debt should never exceed your profits because as debt increases the company valuation decreases
Let me tell you to understand, if your EMIs are more than your salary then your value will decrease or increase. Those who think they need to grow quickly have more chances to make wrong decisions. If we can wait until the compounding effect is added to what level it will take us. Demart once said in 2002 just two retail stores. The valuation of D Mart Company which started as is now well known is more than two lakh crores which means that without the intention of growing quickly if we can get customer care slowly if not immediately then at some point in time the day will definitely come when we will turn the wheel in the market.
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Full project 02
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