Fortis has bought off many employees of 98.4 for more money and more benefits, for their pharmacy retail chain. Due to this, 98.4 is incurring a huge loss, estimated to be Rs 35 lakh per month, said sources.
Fortis Healthworld, the pharma retail chain of Fortis launched recently in the capital, had 98.4 as its formidable competitor. In order to gain an edge, they bought off the latter’s employees. Sources say 98.4, which was targeting some 300 stores by 2011, is going to sell off. “Yes, Fortis has bought off many of our employees due to which we are incurring losses,” admitted Gautam Thadani, director of Global Healthline Pvt. Ltd, the promoters of 98.4.
There is a lot of problem at the grassroots level. For example, the employees that 98.4 have now, are less experienced and not able to provide good service. “We have a system through which we are training our new employees, so experience does not matter,” countered Thadani.
The retail chain, which opened its first outlet in Gurgaon in 2003, is looked upon as a trendsetter in the Indian pharmaceutical industry. It was named 98.4 because “we wanted to have a unique name that people would remember.” “And what better name to have than a healthy body temperature. We want our customers to walk out of our stores feeling healthy – feeling 98.4!” said Thadani.
The Indian pharmaceutical industry remains one of the fastest growing markets in the world. The country’s health and pharmaceuticals retailing sector is estimated at Rs 38,500 crore. With the emergence of organised pharma chains such as Apollo Pharmacies, Reliance and Fortis Healthworld, 98.4 is facing a lot of competition. “The pharmacy market is huge enough for many players without any hitches,” is Thadani’s belief.
Global Healthline is a joint venture between Gautam Thadani, Rajan Madhu, Amit Motiyar and Charan Sareen. “The reason they are selling off is not only huge losses and grassroots-level problems, but also the dispute and tension between the partners brought about in a large degree due to the tussle with Fortis,” said a reliable source.
98.4 had the first-player advantage in the pharma market of Delhi, carving out a niche distinct from the local chemist’s. Unfortunately, the current compulsions are sufficiently grave for the customer-friendly retail chain to sell off.