For Balachandar R, whose two-year-old company offers laundry services the ride has not been smooth.
The 34-year-old runs Laundry Project India, which owns the brand Wassup. Having garnered corporate clients in the hospitality sector, Wassup is expanding with retail outlets in residential localities where the neighbourhood ‘dhobi’ has for long taken care of the laundry.
“It’s tough entering an area where a dhobi has a stable clientele. But our idea is to draw them into our system and offer them a role. We have many of them directing excess orders to our retail outlets.”
Focus on individuals Higher disposable incomes, rising proportion of nuclear families and a large middle class pressed for time are all pointers that strengthen his business case. A steady income comes from the hospitality sector, in which a clutch of major players, including the Taj Group, forms the clientele.
But the challenge lies in getting people on board, and washing off the stigma attached to it. On the business side, getting the eye of retail customers is the next frontier, having garnered corporate clients and carved a market in educational institutes such as IIT Madras and Vellore Institute of Technology, and residential townships.
“Though the hotels provide us with a steady 10-15 per cent profit margin, the revenue is higher at 30 per cent when it comes to individual customers.”
The company currently has 10 pick-up points in Chennai, which will grow by 10 by May-end.
According to a report by KPMG, only five per cent of the ₹5,200-crore market is occupied by organised players. While there is a tiny premium segment taken up by premium players such as Pressto and comparatively bigger portion addressed by regional players such as Akash Laundry in Mumbai and Jyothy Fabricare Services of Jyothy Labs, the large volumes offered by middle-class India is up for the taking, says Balachandar.
His company looks to address this void by pricing its services at ₹30 a shirt, slightly above the neighbourhood dhobi’s rate and several notches below premium.
It also has monthly and bi-annual packages with differentiated pricing. The logistics follow a hub-and-spoke model where the garments are sent via mini-vans to a washing unit, where large industrial machines clean 13,000 garments a day. The revenue target for current fiscal is ₹8 crore.
Funding needs Funding requirements were taken care of when early stage investor, dasStar ventures got on board. The company has done four rounds of investments so far, pumping in ₹4 crore in equity funding. A debt fund advanced by Canara Bank for ₹8 crore will also help in expansion. Managing Director of dasStar Durga Das says the purpose behind her venture was to help start-ups manage teething troubles and reach the stage were venture capitalists would get interested.
All said, recruitment of managers is proving a problem. After installing its stores in residential townships such as Hiranandani Upscale in old Mahabalipuram Road, Laundry Project is looking to franchise for retail expansion. “For entrepreneurs short on funding, our venture provides a start at an investment of ₹5-6 lakhs,” says Balachandar.