Clove Dental to Invest $25M to Open 600 Clinics Pan-India as It Aims to Become a $100M Brand
If you have had a root canal treatment, don’t worry!! 2 out of every 3 Indians suffer from one or the other dental illness.
There are a number of reasons behind the abysmal dental hygiene status in India. First comes the age-long fear of the pain involved in the dental procedures. This fear makes the population neglect their visits to the dentist thus further worsening the status of their teeth and making that visit to the dentist inevitable. India also has an almost traditional tobacco addiction. Although tobacco has harmful effects on the systematic health, it also commits atrocities on oral health. The global Oral care market stands at about $37.06 billion and is projected to be a $40 billion industry by 2020. It is evident that the benefits of good oral hygiene outweigh the excuses as the market grows at $1.1 billion per annum. The whole market of the oral care can be bifurcated into 2 broad categories, Dental services (Dental procedures) and Dental consumables (Equipment, furniture, products, etc.). Out of the whole market share Dental Services contribute about 42% of the total revenue which is about $15.5 billion. India is the largest dental healthcare market in the world and the dental health sector contributes around 2% of the country’s GDP. The Indian dental industry is a $1.36 billion industry and keeps on growing at about 6% per annum. The reasons vary but one of the main components of the rapid growth in this sector is the growth of oral products like teeth whiteners, floss and new and improved toothpastes flooding the market with their USPs every day. With the growing awareness and the lifestyle changes among the urban population in India, a rapid increase in the growth rate of the Oral Products is being seen. The growth rate of these products stands at about 6% per annum.
One such brand that operates in the dental industry is Delhi-based Global Dental Services, which owns and operates a chain of dental clinics called Clove Dental. The company currently operates 250 clinics, out of which 117 are in Delhi. They currently add about 10-12 clinics a month. Clove Dental aims to open 32 more clinics by March 2019 and is chasing 250% growth in revenues.
The company has invested Rs 239 crore ($35 million) since its inception in 2011. It further plans to invest capital of about Rs 171 crore ($25 million) in the near future.
Usually, the company sets up two to four chair clinics with an area of about 700 to 1400 square feet in a commercial location. The company takes the clinic space on lease for about nine years, and invests Rs 30-35 lakh ($43,000-50,000) on renovating and deploying equipment in a given clinic. Clove spends about 8-10% of total expenses on rent. A two chair clinic, which can attend to two patients at a time, has the potential to generate Rs 9 lakh ($13,000) in revenues per month. Clove’s revenues grew 300% fiscal 2015-16.
“The thing to look here is that how many clinics are generating Rs 9 lakh ($13,000) revenue and how long does it take for a clinic to reach there; because while 60 new clinics were opened this year, most of the revenue is still coming from the previous 60 clinics,” explained Clove’s chief executive officer, Amarinder Singh, in an interview.
In the next five years, the company aims to have 600 clinics pan-India and grow to become a Rs 690 crore ($100 million) brand, said Singh.
Other dental healthcare chains that have emerged in India include Mumbai-based MyDentist (Total Dental Care Pvt. Ltd.), Apollo White Dental, Axiss Dental among others. Denty’s Dental Care was acquired by Clove Dental in January 2017.
