Gaining Tidy Profits in the Laundry Business Via Franchising
Cleaning is considered to be a laborious task and people willingly tend to outsource it as much as possible. So, what’s it really like to own a laundry business?
Until a decade ago, we were not even close to having an idea of a proper laundry service in India. With more working couples, hectic work schedules than ever before, eventually the laundry scene began to change, and there has been rapid growth in the business in recent years. Adapting to fast lifestyle and automation in all domestic work, people rely heavily on laundry services, and hence, it has become quite a coveted area of business.
The laundry service market in India is expected to grow to $76.5 billion by 2018, according to Euromonitor International.
Bag Full of Opportunities
With the entry of global companies into India and a firm positioning of domestic players, the laundry industry is just getting bigger and more quality-conscious. And to add to the upbeat mood, the global laundry industry has, to some extent, braved the recession.
Arunabh Sinha, Founder, UClean stated,” Every part of the Laundry sector represents a very big opportunity. We as a brand have evolved by setting up laundry stores across India through franchising. It serves a route to connecting with a greater number of people.”
Furthermore,” Opportunity in the Laundry Business will always continue to be the growth driver because the purchase frequency for a laundry is very high”, said Arunabh.
Balachandar R, Founder & CEO, Wassup Laundry said,” There are opportunities in both front-end and back-end that can be franchised. There is also the huge opportunity to bring in the 11.2 million local dhobis into the platform through franchising. We as an industry need multipronged strategy for the same.”
Anand Bhatt, CEO, The Swiss laundry had similar views on the same. “The franchising business model gives more entrepreneurs and options in this field. With different models we are able to cover different localities which were earlier unheard of”, he said.
The Franchising Route
The laundry business is not just about clothes but is really about the people. It’s a service business, and like any service business, you need to treat your customers well if you want to retain them.
Arunabh Sinha said,” The importance is major because if you see laundry, the business is extremely hyperlocal in nature. So laundry by behavior is a neighborhood concept where people are comfortable outsourcing their laundry to a store which is located in an around their neighborhood. The market size is estimated to be $80 billion and the only way to achieve this scale of business and quickly is through franchising. As a company, you physically cannot start setting up 1000 Laundromats in Delhi alone. The quickest route to this is the franchising route.”
“Franchising is the ideal way to get partners into the business”, said Balachandar, Founder, Wassup Laundry.
Sharing his personal experience, Anand Bhatt, CEO, The Swiss Laundry said,” The most important aspect of expanding any business and reach faster is through franchising. Within 4 years of our evolution, we have opened about 20 units and it was only made possible through franchising. The scenario would have been different if we had started on our own.”
The Long Run
The process of this industry is expected to continue for the next 30-40 years with professional players entering the market and consolidating the industry to increase the share of the overall industry size.
Talking about the industry as a whole Arunabh Sinha said,” About 97% of the industry is unorganized and it’s controlled by the dhobis. The coming of more professional players would ultimately lead people to outsource their laundry to them. By 2020, the industry bears the chances of becoming 7-8% organized from the current 3%.”
Balachandar R said,” Organised Laundry will move from being 3% to 30% of total industry size in the next 10 years. There is scope and opportunity for professionals to enter this space and take this to the next level. Wassup aims to be one of the leaders in this space with presence across multiple cities and a unique business model that is omnichannel and fully integrated.”
Anand Bhatt said,” The immediate future is difficult by with a prospect 5 years down the line, people will be more interested in our services and players like us will emerge much more and franchising will lead the path of expanding in several parts of the country.”
The industry is experiencing a huge potential for 2 lakh crore markets moving to professional segment. There is a huge shift in the consumption pattern with enough room for multiple models and players in this segment.
Being an unorganized industry, expectations are on the higher side for a tremendous growth in this sector with players entering the market and the turnovers are going more than crores.