In an industry as competitive as the laundry sector, it is highly unusual for owners to share their trade secrets. The members of the Telangana Launderers’ and Dry-Cleaners’ Association (TLDA) feel otherwise; they believe that sharing domain knowledge and having a healthy and open discussion are the only ways for existing and new players to find their space in the burgeoning laundry market without cutting into each other’s profits, and delivering quality services.
The TLDA will be present in full force at the Laundrex India Expo
2020, scheduled from February 13-15 at Mumbai. As a prelude to the
many conversations they intend to have there, they let Clean India
Journal have a sneak peek at their informed thoughts and opinions
about the status of the laundry sector at present.
Evolution of the laundry industry
Until as recently as a decade ago, people would do their own laundry at their own homes; the demand for outside laundries was quite niche. But increasing population, higher percapita incomes and better purchasing power have come together to create demand in the Indian laundry market, which is on a high growth trajectory. Outsourcing of services is a timehonoured tradition in India; combined with young and middle-aged people using a variety of fabrics that need special care, the laundry sector has boomed in the last decade.
When Abhilash Reddy, MD – Express Fabricare commenced operations in 2011, healthcare providers had already realised that the first point of contact of a patient with the hospital was bed linen, but they still didn’t consider laundry services a priority. “We had to struggle to reach out to them and create the need for an industry-specific linen/laundry management system”, Reddy said. “Bringing in hygienic standards close to the NABH recommendations, daily linen audits and international quality solvents were our basic priorities. The results were visibly tremendous – in linen life, reduced discards, and it created more time for the management to concentrate on patient handling”.
How to set up a business
Location, location, location! Among the many factors that need to be assessed before investing in a laundry, Abdul Khadeer, Founder – Ironers said that the site of the facility depended on the type of laundry. For retail laundries, it should be near gated communities or apartments (at least the pick-up point should be nearby) while commercial laundries which serve hotels, hospitals or the railways can have workshops on the outskirts of the city.
“Apart from location,” says Adarsh Kumar Moogala, Founder – Smart Wash Solutions, “selection of the right machinery, manpower and the availability of water also need to be assessed.”
Shiv Shanker Agrawal, CEO – Washonn points out that no there have not been professional companies or consultants to educate investors on laundry startup challenges, and institutions dedicated to the training of skilled manpower. He advice to new entrants is to “begin with complete dedication and wait at least 12 months for results to come your way. Follow standard operating processes with quality as the vital factor”.
Moogala has devised a set of initial steps for new entrants, starting with mapping the entire value chain of the industry, from plant set-up and operations, pickup and delivery logistics, software, on-boarding of new customers to the incremental services that can be offered as one develops one’s network. Discussing viability models with current market players and finding service gaps in what they offer will help one position one’s service uniquely.
“‘Why should the customer come to you?’ This should be the question answered by every new player”, says Moogala. “A logical and convincing answer, if executed well, will drive your business forward”. One can start off with a B2B model but first it is important to figure out how customers will meet at least 30% of your plant capacity before investing, and to consider B2C only after B2B meets 50-60% of the capacity, since the gestation period in B2C is longer.
Special cleaning
Abdul Khadeer’s company is involved in cleaning footwear and leather articles. Unfortunately, he says, customers still think that all laundries do is wash the product and hand it over. They do not realise how complicated the process can be. Leather goods and toys, in particular, require gentle processing as they are very susceptible to damage, while the temperature, duration, machinery, chemicals and drying process used in shoe cleaning are critical.
Moogala says that every week, he gets an average of 25 orders from customers who have experimented with cleaning footwear at home or from an unprofessional team. “No branded cleaning agents or skilled support is available for such cleaning. People largely clean canvas and sports shoes, and damage leather articles by experimenting on them”, he says.
Lack of quality water
While the quantity of water may not be an issue during off-season, Telangana laundries do face acute water shortage during summer, within city limits. Khadeer says, “The quality of the water in some areas is bad, but can be managed with a good water treatment plant; generally, good water softener is adequate”. Irrespective of the quantity and quality of water, it is vital to recharge and treat water for better washing results. “Short cuts for illogical water saving will lead to disasters in the finished product and final output,” warns Agrarwal.
In-house processing vs outsourcing
The benefits of outsourcing are numerous: no machinery, no heavy investment, no labour cost, no location issues and no power bills. However, Agrawal compares outsourcing to sending one’s own child to a hostel. “In case the hostel management is not able to maintain discipline, life goes haywire; similarly, in a laundry, if correct processes and procedures are not adopted, we will have a series of customers coming in for compensation. Most times, it’s experienced in-house processing that gives the desired and expected results”.
Outsourcing allows for relaxation while ordering and dispatching, but offers zero control over quality and consistency.
Training manpower
Gurpreet Singh, Owner – Fashions Dry Cleaners says that at present, “An entry level worker is assigned under a senior worker who trains him. Training time cannot be specified and varies from case to case. For example, training a person to become a good pressman may take 10-15 days.”
In India, there is no designed curriculum or diploma course for laundry. All training is on-the-job. Agrawal says that people with far too little knowledge during their initial employment become overconfident and burn their fingers. They do not realise that artificial fabrics and tempered finishing of the fabrics make apparel look and feel different, and that they react very differently to normal or unbranded cleaning agents.
He recommends a lengthy period of training in just washing, initially, followed by dry cleaning and ironing. In the B2B segment, processes are uniform and easy to execute, but not so in the retail sector, where every order is unique, with a different texture and finish. Hence, the learning period cannot be defined, but six months of reasonable daily work can be deemed enough for independent handling.
Retaining trained employees is a problem everyone faces. Moogala recommends offering incentives, rewarding good behaviour and offering family benefits like corporate companies do.
What do customers want?
Many customers misjudge a stain as a common one, and use any available means for its removal, causing damage. When this happens, they show up at a laundry, expecting a miracle.
Agrawal says that understanding customer desires properly makes the process easy to execute. He compares a customer’s requirements to individuals who have different eating habits; each person wants something different, and will be satisfied only when his specifications are catered to.
Udaybhasker Theegala, MD – Sunshine Dry Cleaners says, “Consumers are being attracted to laundries that provide a full-cycle approach: easy booking, pick-up and delivery at doorstep, the option to choose a detergent for washing their clothes etc. Moreover, being updated about every step in the procedure is also something that consumers want. This transparent approach is the turning point that has changed consumer behaviour and expectations.”
Unreasonable customer demands
In a service-oriented industry, these are bound to exist. And when a customer starts making demands in a highly competitive market, many service providers bend themselves to their whims and fancies.
These include unrealistic delivery timelines, unusual packing systems, unwarranted attention, irregular followup calls, impossible finishings, and unremovable stains. Agrawal says, “In the service industry, it is very important to say ‘no’ whenever it’s not practical, and better to refuse such orders beforehand.”
Unethical price wars
According to Reddy, most consumers in both the hospitality and hospital segments don’t know the standard costing of the laundering process, which paves the way for competitive underbidding. “If we are trying to give standard quality at an economical price, someone else comes in with an unethical price which makes the consumer think that they are probably overspending on us. They pick him; over time, he fails to serve them, but we have already lost the client by then.”
Amateurs in the business tend to quote very low rates, thinking they can make a profit; later on, they resort to substandard means to cut costs, which reduces quality. Eventually, it is the end-user (hospital or hotel management) which has to invest in new linen. This problem is the most in the B2B segment; in B2C, the consumer generally sticks to one reliable vendor.
A good laundry will offer the lowest possible price for a certain quality standard and will pass on discounts to customers; once they secure a certain client base, quality and not price becomes the trump card.
Dealing with customers who expect one to match the unviable, low rates of a competitor can be tough, but isn’t impossible. As long as one is confident about the quality one intends to deliver and can consistently deliver it, the customer will realise that he is getting value for his money. Owners should take the time to explain to customers that ‘cheap cannot be best and the best cannot be cheap’.
Singh, however, underlines the bare truth: when owners don’t succumb to a customer’s bargaining, they do lose some customers.
Retaining customers
Khadeer compares customer loyalty to a narrow thread; the slightest damage can ruin it forever. When a fabric is damaged, he encourages owners to inform customers proactively rather than them finding out later on their own. And when determining compensation, think from a consumer’s perspective; remember that no one has bills to prove the cost of the cloth. In his experience, 60-65% customers are repeat clients.
Agrawal says, “Customers burn their fingers with shortterm entrepreneurs or unethically operated or short-cut operators and come back to quality providers like us. A majority of our customers are retained”.
Predicted trends
The outlook of everyone at TLDA is very positive. “In the coming years” said Moogala, “The laundry industry is going to thrive but the players who are committed to quality will remain while others will perish. The time has come when instead of just giving expensive clothes for dry cleaning, daily wear is now given too. The mind-set is changing; customers are more informed and are demanding steam ironing”.
Khadeer predicts that in the next 2-3 years, the investment required in technology will deter fly-by-night operators and attract only serious people. In his opinion, “Outsourcing will double, automation will increase and many promotions will be offered.”
His last words are hopeful: “Dry cleaning and laundry is a long-term business, scalable and growth-oriented. This is a sunrise industry, with no dearth of opportunity or profits.”
Mrigank Warrier