[box type=”shadow” ]Arunabh Sinha, Founder and CEO, UClean Laundry, shares his story of climbing the ladder of success in the laundry market.[/box]
What motivated you to build up a laundry business?
Many business ideas germinate at one’s own home. My wife’s irritability with the domestic help’s bad laundry job, I decided to look for a viable solution. Thereafter, I spent time researching about laundry and laundromat concepts globally and was particularly impressed by the growth of laundromats in South East Asia; Malaysia, Indonesia and Philippines in particular. The more I studied, the more I realized how laundry has flourished in that part of the world as a brick & mortar concept. It was thus after some detailed research and analysis that I decided to build laundry as “Offline First, Online Second” model
What are the challenges you faced?
We had limited funds at our disposal when we first started. Starting a store of our own would have meant deploying all the funds in this single store, which would have limited the scope for quick expansion. So, we took a conscious call to use the funds to go all out in the market to look for franchises who would work on the FICO (Franchise Invested Company Operated) format and quickly help us establish ‘proof of concept’ stores in the market. It was easier said than done. Since we did not have any stores already operational and I did not have an existing laundry background, it was very difficult to convince investors to jump onboard. At the end of the first two months, we did not have any presence on the ground and no store in sight.
As a brand, the target is to become the one-stop-shop for all cleaning requirements inside a household. Whether it is dirty clothes, dirty carpet, dirty upholstery, dirty homes or dirty car; we want to cater to all of them.
What is your growth plan?
We have been growing and expanding very aggressively through the franchise route. Our last 15 months have seen us establish our footprints in all the tier one cities of the country. At the same time, we have started testing waters in tier two cities by making some early inroads. We would continue with this rapid expansion and are targeting to have 300 stores operational in 30 cities of India by 2020. While all our stores right now are of smaller stores focused on retail laundry, we are also in the process of experimenting with larger industrial setups to cater to institutional clients like hotels and hospitals. The first two larger setups are all set to launch in the first quarter of 2018 in Delhi and Pune, which were also our initial testing grounds for the smaller format. A s we expand, we would also focus on developing a healthy mix of smaller and larger format stores.
What are your target segments?
Our business is predominantly B2B2B and B2B2C. We recruit and enable franchises, who then cater to both the retail and institutional customers through their hyperlocal, neighbourhood stores. In the retail business, we are a segment, tier and age group agnostic. Our customers come from all age groups and strata of the society and generally live within two km of a given store. While bachelors and students are always easier to convert, larger families represent customers who are more loyal to behaviour and have higher ticket size per booking.
B2B clientele primarily represents hotels and guest houses. These typically work on a very tight TAT (Turn Around Time) and operate on credit period basis. While the rates offered to such customers are preferential in nature, these are high volume businesses with a minimum guarantee.
What is your criteria for a franchise partner?
We are looking for people with the right mindset. Laundry is an operation intensive business. While the machines that we use are intelligent and have an inbuilt smart technology, the franchise also needs to double up as the store manager during the initial few months of the business – the teething period for the laundry business. Post the initial teething period, the laundry business comes into auto mode and can be run with minimal supervision. However, we always prefer people who come in with an ‘Operator Mindset’ and not just an ‘Investor Mindset’. The investment required in a store setup is not very high and a single store can be set up with an investment of about `18 lakhs, but the commitment of the franchise is more important and counts for a lot.
What are the different technologies that you use?
The entire UClean business is driven by customer convenience and delight. The tech development has been done keeping these factors in mind. The front-end technology that we have in place includes a fully functional app (available on Playstore as well as IOS), proprietary backend portal for managing and taking bookings, advanced IVRS calling channels, integrated CRM system plus some other tech products that we are looking to introduce in the market. All the machines at the store are coming from our equipment partner, Alliance Laundry Systems USA, which is the world’s oldest and largest commercial laundry equipment manufacturer. The machines that they provide are the most advanced systems in the world and help us create state-of-the-art infrastructure.
What is Ultra High Consumer Purchase Frequency (CPF)?
Laundry is a business where the requirement for outsourcing is very high. As an operator, if you are offering ‘Customer Delight’ consistently to your customer, the same customer would keep coming back to you every week. Thus, the same family will purchase your services every week leading to an ultra-high Consumer Purchase Frequency (CPF) which is not seen in most other sectors.
What about your upcoming projects – Car detailing and Deep cleaning?
UClean started active operations in the month of Jan 2017. 12 months later, the biggest insight we received was what I would call “The Threshold of 3”. Through our pick & drop, we realized that it took an average customer three visits from our rider before they became comfortable with him. During subsequent conversations, the delighted customers would often ask the riders if UClean offerings went beyond laundry and if we could also clean their upholstery, washroom, car etc. These conversations made us realize that the customers were looking to outsource most cleaning services to a professional brand. While laundry has an ultra-high Consumer Purchase Frequency (CPF), these services have a much lower CPF but with a significantly higher ticket size. These services require an entirely different business model, different teams, and training structure. That’s how we decided to create Mint Clean – a brand committed to delivering “healthy homes” to by offering a host of essential non-laundry services like deep cleaning, upholstery cleaning, car wash etc. UClean and Mint Clean working together would strive to become the one-stop-shop for all cleaning requirements of a family!
In what way does it contribute to Swachh Bharat?
We are striving to contribute our own bit in a manner which is holistic in nature. So, while we started off by offering laundry services and taking care of dirty household clothes, we quickly expanded our services to focus on offering all cleaning services required within a household. So, our vision is to work towards creating ‘Swachh Ghar, Swachh Parivaar’ and thus contribute our bit to the much larger cause – Swachh Bharat.