Apr 4, 2016

LUXURY OVERLOAD IN LAUNDERETTE BUSINESS

According to a study by KPMG the size of the so called organised laundry market in India is around 5 200 crores Here is the glimpse of the dry cleaning and laundry industry along with the business opportunity it offers to potential franchisees

 

According to a study by KPMG, the size of the so called organised laundry market in India is around 5,200 crores; however the unorganised segment which still needs to be captured lays around an enormous 200,000 crores. Here is the glimpse of the dry cleaning and laundry industry along with the business opportunity it offers to potential franchisees.

The growing demand for quality laundry services, the unorganised and the untapped cleaning sector are not the only influential factors that catch the eye of an investor. There are various other scope igniting elements that give this industry a heads up in terms of comparison with other service based sectors. Being a relatively untapped market, eventually the number of competitors offering quality services is very less. Apart from being a concept that does not require any major investment, it does not require a high end training or education to run a laundry business.

Not just reflecting on the industry reports and overview of the sector, let us share us some practical insights from the players currently exploring the laundry business and their remarks about growth through franchising.

Market trend

Transforming at an exponential scale and tempo, the unorganised laundry sector which includes dhobis, maid servants, and mom-and-pop stores still has way more experience and in depth knowledge about the consumer. It is estimated that by the end of 2020, more than three million Indian households would be requiring laundry services on a weekly or even daily basis.

As per Suresh Bhatia, Director, 5 A SEC: “Even today over 85% of laundry and dry cleaning industry is largely operated by the unorganised sector in a conventional/traditional manner, where no safety methods are adopted for the labour or even for the garments to be washed. At 5 A Sec we are exploring opportunities based on market research conducted by our teams and are looking to fill these gaps appropriately.”

Different players’ different strategies

Although being a fairly untapped sector, it is really very essential to occupy the target consumers as it is a service based industry; therefore services can vary from person to person.

Ankit Kala, Co Founder, The Laundry Basket: “Our pricing strategy is different from our competitors. Unlike a piece-wise or a kg wise rate, we charge on load basis with a minimum load of 4.5 kg's. We do not mix any of the clothes with those of others. Each machine has a single customer's garments in order to ensure hygiene.”

“At 5 A Sec we ensure all safety measures for our employees and for the environment and follow the route to sustainable development. To optimize the use of our energy, we have introduced solutions to reduce significantly our consumption of water and electricity,” Bhatia says.

Go digital or stay rooted

Despite the breakthrough of digitalisation in today's era which has transformed the way the laundry industry operates its business, there are players who believe that being connected with the roots and providing consumer satisfactory services are the elements to run a successful laundry business.

E- Commerce and digitalisation is mushrooming not only in the laundry industry but almost in all trades, one cannot just weigh them off. Unless these aggregators have their own/outsourced capacity to serve the clients they'll probably be weed out over a period. India is a vast market and every player has its share of market as long as they are providing services rightfully to its customers.

Reflecting on this Kala comments, “We have a blend of the offline and online model. We have physical laundromats where people can choose to come and give their garments. There is also an option of home pick-ups through the website or the mobile app. This helps us tackle the other only app based service providers, while also retaining the advantages of offline models with the help of physical stores that builds customer trust and confidence.”

The Road Ahead

The Indian laundry industry is all set to witness more and more new players entering the industry, as investors are much aware about the potential of the industry and the transformation of changing market needs. An increasing number of players in a particular segment lead to a healthy competition, which pushes businesses to bring in better services through innovation and some amount of consolidation. On a conclusive note, there is a 3.5% increase in the number of people who are using the laundry service in India every year. Leaving a huge carpet area that needs to be covered and has an immense amount of scope to make it big.

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