Total Pageviews

Wednesday, June 19, 2013

Giving teeth to modern dental care business

Vikram Vora
An edited version of this story first appeared in DNA Money on Tuesday June 18, 2013.

A production engineer armed with a masters in management studies (MMS) in marketing from Mumbai University, Vikram Vora slogged it out for over three (2005-2009) in his family business selling dental materials like any other management graduate. He would wait for hours at the dental clinics for his turn to make a sales pitch and in the process identified a huge gap -- lack of transparency between patients and doctors -- that left a lot of patients dissatisfied with the treatments rendered.

Vora also realised that the awareness level about dental treatments among patients was very low. Adding to their confusion (before committing for a particular treatment) was the fact that doctors would very rarely educate them about various aspects related to the treatment. His analysis of the situation brought out the fact that in the entire process, the patient would not get to know what was the problem, why it happened, what are the optional treatments, what is the best and least expensive procedure, what is the right (affordable) option to go for, how much time will it take to heal etc.

"I believed if somebody could create a service and bridge this gap, it would be a great success. And that is how the entire idea of Mydentist evolved and achieved the current status in the market today," said 34 year old Vora who co-founded Total Dental Care Pvt Ltd (TDC) with his brother Parth. With 45 dental clinics in Mumbai and Pune, TDC is India's largest multi-speciality dental clinic chain.

What sets Mydentist clinics apart from other standalone dental centres is the fact that it offers a standardised and published rate card for all its services - something that was not standard practice in India untill recently. Dentists are employed on monthly salaries (Rs 16,000 for entry level), instead of the usual profit-sharing model, and work in shifts of four hours each.

"We started the trend of offering quotations for every treatment being offered. The approach initially received negative feelers from the industry but that's not the situation now. People have matured and have accepted that it's here to stay. In fact, a lot of doctors have started following the quotation approach and standards of treatments have improved to a great extent," said Vora.

As a result of this the pricing gap between a standalone dentist and Mydentist has decreased though the later would still be marginally lower in pricing as compared to a grade B dentist. The charges at Mydentist (price list also displayed on the company website) range from Rs 300 for cleaning per sitting to Rs 90,000 for clear aligners (clear removable cosmetic appliance designed for minor teeth movement of patients).

Elucidating the different category of doctors in the dentistry field, Vora said there are grade A doctors focusing only on the elite clientele and hence quote exorbitantly high charges. "Then there is grade C catering to larger number of people in the lower middle-class category at a significantly lower cost than the grade A practitioners. Then there are the likes of charitable trusts and government hospitals that operate at an almost negligible cost. So we target the audience between the average middle-class and the charitable trust," said Vora.

Interestingly the venture was never envisaged with the idea of making it the largest dental clinic chain in the country. The six clinic chain (undisclosed funding from family) was earlier operated under the banner Total Dental Care and sometime in January 2010, Vora's ex-employer Anand Lunia (angel investor and founder of IndiaQuotient) suggested taking the private equity route if he wanted the business expand from six to 100 or more clinics.

An introduction to Seedfund was facilitated by Lunia post which the angel investor incubated the idea. The first thing Seedfund did was to get on board book evangelist, mentor and business consultant R Sriram (erstwhile CEO & MD of Crossword Bookstore). During his six months with TDC, Sriram structured the entire business, design as well as coined the brand name Mydentist.

"There was a complete change from pre-incubation stage. The entire language and communication was framed early-on post the incubation including the logo and the brand name," said Vora.

The existing six clinics thus had to shut down to bring in the consistency in offerings and brand standards being laid down under the new identity. The first Mydentist branded outlet was opened in Vile Parle (Mumbai) in April 2011.

"Pre-incubation, I don't think we had the structural knowledge to run a business that would grow to this magnitude. Today we have around 250 doctors, 60 consultants, over 200 support staff. We'll be adding 5 clinics to the portfolio taking the total number to 50 clinics to by the end of this month. This concrete business as is visible to the market today would not have been possible without inputs from the fund, consultants and individual mentors," confesses Vora.

A 300 square foot Mydentist clinic calls for an overall investment of Rs 35 lakh of which majority (Rs 20 lakh) goes into buying imported equipment (from vendors in India). Two doctors work three shifts in the day. On an average the Mydentist chain gets close to 8,000 patients every month and the number is set to reach 10,000 patients per month by June end. Each centre will take 18-20 months to breakeven. The nature of treatments sought by most patients are pretty much the same -- root canal, scaling, polishing, crowns and bridges and other common treatments -- as any other standalone dental clinic would provide. The clinic has started offering orthodontics services and has tied-up with financial institutions to offer and EMI scheme as orthodontics tend to be expensive.

Not sharing commercial details of the business, Vora said that revenues have increased over three times when compared with the peak revenue figures of the pre-incubation stage.

Seeing potential in the business idea, a new fund - Asian Healthcare Fund by the Burman family, promoters Dabur Group - has invested Rs 40 crore in Mydentist. As a result, the ownership of TDC is now equally shared between the promoters and the two angel investors.

The funds raised will largely be used for growth as the company is targeting 100 clinics by March 2014 and 150 clinics in another 18 months from now. The new additions will also happen in Mumbai and Pune while cities like Ahmedabad and Surat are being considered as well.

No comments:

Post a Comment