This Delhi entrepreneur created a dental clinic empire in India that rakes in Rs 124 Cr revenue
After experiencing an untoward incident at a local dentist, here's what Amarinder Singh did to start Clove Dental and take it to 330 clinics, 870 dentists, and 23 cities.
Dental and oral health is an essential part of overall health and well-being. According to a report by NCBI, 50 percent of school going children in India suffer from dental caries (cavities) while 90 percent of the adult population is affected by periodontal disease (gum infections).
So, a majority of the population faces some sign of dental health problems in both urban and rural India. While the rural dental care market is largely untouched, it is common to see dental clinics in towns and cities.
Most of these clinics are run by private entities and individual dentists or in a chain format by large hospital and pharma players such as Apollo Group, Fortis, Wockhardt, etc. However, oral healthcare chain Clove Dental follows a different approach.
Started by serial entrepreneur Amarinder Singh in Delhi in 2011, Clove Dental is a private, oral healthcare organisation which opens and runs dental clinics in urban neighbourhoods.
The idea is to set up local dental clinics which are high tech, accessible, convenient, and hygienic for lower middle class and upper middle class citizens of cities and towns.
Amarinder's approach to oral healthcare has worked so well that in just eight years, Clove Dental has become one of India's largest network of dental clinics.
Today, it has over 330 clinics across major cities and towns in Andhra Pradesh, Delhi-NCR, Gujarat, Karnataka, Maharashtra, Punjab, Rajasthan, Tamil Nadu, and Telangana.
It has recruited over 870 dentists and now manages over 30,000 patients each month.
The clinics perform dental procedures such as fillings, root canal treatment, wisdom teeth removal, braces, implants, dentures, bridges, crowns, teeth whitening, etc.
Last year, the business clocked a revenue of $17.5 million (roughly over Rs 124 crore), and is on track to open another 90 clinics this year and grow even bigger.
How it all began
Private dental clinics are the major oral healthcare providers for the urban population. But Amarinder Singh was not satisfied with these dental clinics. In 2010, while visiting a dental clinic with his wife when he was in Delhi, he had a bad experience.
"I was at the clinic for a tooth filling, and everything was going fine till I had to rinse and spit. That's when I saw the drain was dirty and unhygienic," he tells SMBStory.
At that time, Amarinder had recently moved to India after a long stint in the US and Canada, and was looking to venture into healthcare.
And looking at the dirty drain in the clinic, he decided to conduct some research into oral healthcare.
What he found was was alarming.
"Dental care in India was lacking in various things such as infrastructure, hygiene, and sterilisation. I saw majority of Indians need some form of dental care, but only ten percent were going to a qualified dentist," Amarinder says.
He also found a general lack of awareness about the need for dental healthcare. "There are many links between oral disease and other ailments, but people don't know much about. For instance, people think growing old means losing teeth. But with the right dental care, there is no reason to lose teeth as one grows old," he explains.
Large scale problems need large scale solutions, and so, Amarinder decided he would open 600 dental clinics in 10 years and become the preferred dental care provider in every neighbourhood across India.
He decided to use the word 'clove' in the brand name due to the spice's analgesic properties. "Clove provides pain relief when you chew on it. My grandmother would tell me to chew on a clove when I complained of toothache. Since it has a direct connotation to teeth, and also has the word 'love' in it, I decided to go with 'Clove Dental' as the name for the dental chain," Amarinder says.
To back the ambitious idea, Amarinder raised an initial amount of one million dollars (around Rs 7 crore) through personal investment, friends, family, and a few American investors.
With this, he opened the first clinic in 2011 and went to start another hundred.
"Each clinic costs around Rs 30 lakh to set up as 80 to 85 percent of the medical equipment, instruments and machinery is imported," he explains.
Clove Dental follows a "middle of the pack" pricing model- a strategy Amarinder came up with after studying the pricing of other clinics and comparing it to his own cost of material plus cost of the dentist.
For the dental chain, the cost of the recruited dentist and the dental assistant in performing procedures is very high. Thus, the cost of using the expensive, imported equipment amounts to less than 25 percent of the cost of the procedure, Amarinder says.
"Therefore, each centre needs Rs 30 lakh to Rs 40 lakh of operations cost before breaking even. Since the cost of imported equipment does not form the major part of the price of a procedure, we cannot leverage economies and scale in order to attend to low income people," he explains.
Replicating at scale
Since the start, Clove Dental clinics were cafe-themed, templatised, and everything was designed to be replicated at scale. However, the lengthy period before a Clove Dental clinic can achieve profitability (owing to high operating cost) is why Amarinder didn't approach venture capitalists (VCs) to fund the chain's scale up.
"Ours is a long-term prospect while VCs look for quick returns and fast exits. So I approached international, high net individuals who understand healthcare. This way, with 100 percent Foreign Direct Investment (FDI), I was able to scale up beyond the first 100 clinics and open over 330 clinics," he says.
However, a constant challenge he deals with is raising awareness among the population on the need for dental care. "People consume tea, coffee, candy, and other foods and don't give their teeth the necessary dental care that is required. There is the common myth that brushing once or twice is all that is needed," he says.
Amarinder also points to the fact that the expensive and high tech equipment used by each Clove Dental is exposed to high temperatures, dust, and pollution. It is also often used by dental assistants who require lengthy training. Any mishaps could result in the need for replacement components which would further inflate operating costs.
Despite the hurdles, Amarinder is bullish about the future as he believes the dental care market is underpenetrated but growing significantly.
"Competition is less of an issue since there is more demand but less supply of oral healthcare. 95 percent of the market is individual dentists. A few corporate dentist groups have over 100 clinics, and some others have less than 100," he explains.
With its large market penetration, Clove Dental is staying ahead of the curve. And with the new standard of dental care it is ushering in, Amarinder visions to open 600 clinics in the near future.
(Edited by: Palak Agarwal)