DMart Bets on Pharmacies: Will 20% Discount on Medicines Disrupt Chemists and E-Pharmacies?
DMart Bets on Pharmacies: Will 20% Discount on Medicines Disrupt Chemists and E-Pharmacies?
The supermarket chain has quietly begun testing pharmacy counters inside select Mumbai stores, offering a flat 20% discount on medicines. While the strategy could attract more customers, experts say scaling up the business will not be as easy as selling groceries.
By Vidhi Lalla
DMart, India’s largest supermarket chain operated by Avenue Supermarts, is quietly testing a new business that could reshape the pharmacy retail market. Through its wholly owned subsidiary, Reflect Healthcare and Retail Private Limited (RHRPL), the company has started pilot pharmacy counters inside select DMart stores in the Mumbai Metropolitan Region (MMR), offering customers a flat 20% discount on medicines.
The move comes as quick-commerce platforms such as Blinkit, Zepto, Swiggy Instamart and Amazon continue to intensify competition in grocery retail, prompting traditional retailers to look for new growth opportunities.
Instead of opening standalone medical stores, DMart has adopted a ‘shop-in-shop’ model by setting up pharmacy counters within its existing high-footfall supermarkets. This allows the retailer to utilise existing store space while avoiding the costs of acquiring new real estate, additional marketing and customer acquisition.
The strategy closely mirrors DMart’s successful ‘Everyday Low Pricing’ model, which has helped it become one of India’s most trusted value retailers. Initial customer response to the pilot has reportedly been encouraging, and the company is evaluating a gradual expansion.
Why pharmacy retail?
Unlike the grocery business, where operating margins are relatively thin, pharmacy retail offers higher profit potential, especially on branded generic medicines. Industry experts say pharmacy margins can range between 25% and 30%, significantly higher than the margins earned in food and grocery retail.
By leveraging its large customer base and existing stores, DMart hopes to increase customer spending while creating another revenue stream without investing heavily in new outlets.
Challenges remain
Despite the attractive opportunity, experts caution that the pharmacy business is far more complex than grocery retail.
A typical pharmacy must stock nearly 4,000 to 5,000 different medicines to meet varying prescription requirements. Managing such a vast inventory while maintaining a flat 20% discount could prove challenging.
Unlike FMCG products, pharmacies deal with medicines sourced from dozens of pharmaceutical manufacturers, each having different supply chains, expiry dates and regulatory requirements.
Industry leaders have also questioned whether deep discounting can remain profitable over the long term, especially while maintaining adequate inventory and service quality.
Pressure on local chemists and e-pharmacies
If expanded nationwide, DMart’s aggressive pricing could increase competition for neighbourhood medical stores and online pharmacies already operating on thin margins.
The company’s strong footfall and established retail network could reduce customer acquisition costs, giving it a competitive advantage over standalone pharmacies and digital health platforms.
However, analysts believe the rollout is likely to remain gradual as the company evaluates operational efficiency and profitability before expanding beyond the pilot phase.
Reflect Healthcare and Retail Private Limited (RHRPL), which is leading the initiative under DMart veteran Hitesh Shah, is spearheading the project.
With more than 500 DMart stores across India, the retailer has the physical infrastructure to scale the business if the pilot proves successful. Whether the pharmacy venture becomes the company’s next major growth engine will depend on its ability to balance discounts with operational efficiency.
FAQs
1. Has DMart started selling medicines?
Yes. DMart has launched pilot pharmacy counters inside select stores in the Mumbai Metropolitan Region (MMR), offering medicines at a flat 20% discount.
2. Why is DMart entering the pharmacy business?
The company is looking to diversify its business and tap into the higher-margin pharmacy retail segment while making better use of its existing supermarket network.
3. What is DMart’s ‘shop-in-shop’ pharmacy model?
Instead of opening separate medical stores, DMart has set up pharmacy counters inside its existing supermarkets, reducing real estate and operating costs.
4. Will DMart’s pharmacy business affect local chemists?
Industry experts believe widespread expansion could increase competition for neighbourhood pharmacies and e-pharmacy platforms because of DMart’s pricing strategy and large customer base.
5. Is the pharmacy business available at all DMart stores?
No. The initiative is currently being tested only at selected stores in the Mumbai Metropolitan Region, and any nationwide expansion is expected to be gradual.
