UClean, a laundry startup, was started in 2016 in Delhi-NCR with local dry cleaners, and in just over three years, it has expanded to 43 cities and is currently catering to about 3000 plus orders on a daily basis. The company is also gearing up to launch in international markets, including Bangladesh and Nepal, by the end of October and in Malaysia and Thailand by the end of this year.
"With another 5 months to go in 2019-20, the target is to end the year with a bang and have 300 franchises and a footprint in 60 cities of the country. Additionally, we are also set to go live in November with our first international store in Kathmandu," said Arunabh Sinha, Founder, UClean, in an interview with CNBCTV18.com.
A laundry startup is unusual. How did you come up with this idea of launching UClean?
Indian laundry industry is pegged at $50 billion plus with almost 98 percent of it being controlled by dhobis and local mom and pop operators. No other industry of this humongous size would be this unorganised! This fact literally hit me in the face when I was looking out for trusted laundry vendors in my previous stint as the North India business head for one of India’s leading budget hotels aggregation chain. We were facing serious customer escalations owing to the poor quality of laundry service at several of our hotels. My research gave me the opportunity to deep dive into this industry and also served as the single biggest inspiration behind starting UClean. The opportunity was too big to be ignored despite the lack of glamour and the fear of trying what nobody had tried before.
What were the initial challenges you encountered when entering the laundry segment? Did you ever have a doubt that turning mundane household chore into a business would work?
Aside from the usual challenge of keeping the naysayers at bay, the initial challenge was putting together the right team who would form the core in the longer run. Unglamorous segment coupled with the lack of initial funds meant attracting the pedigreed was almost impossible. Of course, getting the initial investors to take the bite was a big headache too given that we were actually trying to introduce an altogether new segment in India – Laundromats. While lots of HNIs/prospective investors had seen and even used laundromats internationally, they were sceptical as to why it would work in India. I was however bullish about the potential because people were already outsourcing their laundry to the dhobis and would often grumble about the poor quality of wash or absolute disregard to the turn around time (TAT). I was clear from the beginning that these are the two major issues UClean would focus on.
In India, people still prefer the neighbourhood 'dhobi'. And there are thousands of small scale dry cleaning outlets. So how will you deal with competition and differentiate yourself?
People have been preferring neighbourhood dhobis due to the lack of better options. As a brand, our positioning is that of “your friendly, neighbourhood, transparent laundry store”. We’re all about transparency. We invite our customers to come down to the store and see for themselves the entire process in action: The water, the detergent, the machines and overall, the way your clothes are handled. This transparency is absolutely lacking in your traditional dhobi setup. Plus, we allow you to schedule a pick and drop as per your convenience through our app. This is unlike the traditional dhobi where you have to work your schedule according to his whims. Traditional dry-cleaners are already struggling owing to the changes in consumer behaviour. We, as people, are moving more and more to casual wear and restricting ethnic/gaudy wear to parties and functions. This has been killing the dry-cleaning market and laundry is eating up that market pie. So, the conquest of the dry-cleaning industry by laundry is already in the process.
Tell us about your work with leading brands like Dior, Gucci, Amazon and OYO.
Not only Gucci and Dior, we are working with almost all the big labels at DLF Emporio Mall in Delhi, which is India’s biggest luxury mall. All the staff uniforms are cleaned by us plus any garment that requires any special cleaning also comes to us. Every morning, our team is there to collect the uniforms from all the stores and deliver the uniforms from the previous day. An added challenge here is that the uniforms are also from the same brand, making them exorbitantly expensive. Hence we only offer premium laundry services, with a dedicated team handling them. For Amazon, we clean the bed linens, pillow covers and towels for all Amazon guest houses across Hyderabad, Pune, Noida and Gurugram. With OYO, the tie-up is across some select OYOs for both their hotel and guest laundry.
Could you please tell us about the UClean products and services?
Our biggest selling product is our 'Laundry by Kg' service where we offer our consumers the option of getting their clothes ‘washed and ironed’ or ‘washed and folded’ on a weight basis. Our charges in tier 1 cities, for example, are Rs 90 per kg if you opt for ‘wash and iron’ and Rs 60 per kg if you opt for ‘wash and fold’. The option of ‘Steam Iron Only’ is also there. We also offer dry cleaning as part of the larger package but the focus is always on educating customers about how majority of clothes should actually be washed and not dry cleaned. We’ve recently also started offering services like carpet and upholstery cleaning, full-home deep cleaning, on-demand car wash services etc. where we have formed a JV with American brand Chem Dry, which is the largest surface cleaning brand in the world.
Describe how are you using technology in laundry services, how do you think that will coax people to buy your services?
Our entire business is controlled through our suite of software which we have developed in-house and named it as CleanOps. This includes the
booking-cum-billing software that is given to every franchise, Apps (available on Playstore as well as IOS) for the consumer and Rider App for the delivery boy so that his position can be tracked on a real time basis. Our Apps in the front end allow the customer to directly schedule a pick and drop, modify or cancel the request as per the consumer’s convenience. The consumer can also opt for extra services such as Fragrance, Antiseptic Cleaning and Moth Proofing through the click of a button from the app. On an average, it takes a registered customer less than 30 seconds to place an order. The app also allows customers to take advantage of ongoing promotions or to get recognised as a loyal customer.
Could you give us an insight on the number of orders you get and about your profitability?
Ours is predominantly a franchise-based business with our franchises running their own successful UClean stores across 43 cities of India right now. We’re catering to about 3000 plus orders on a per day basis. At a unit level, it takes a franchise outlet about 3 months to become operationally profitable and by the time the store is about 12 to 15 months old, it would start hitting peak sales and peak profitability. An average store, which has been in the system for 15 plus months, should be able to make a profit of about Rs 1.5 Lakh on a per month basis. At a corporate level, our major revenue generator currently is the franchise fee that we receive every time we award a franchise for any territory. There are other revenue streams like royalties, supply chain, etc which are minor contributors as of now. Since we have been growing at a very healthy rate, we have managed to remain profitable throughout.
Who is your biggest competitor?
Barring UClean, all the laundry brands in India have chosen to remain local or at best, regional players. So there is not a single brand which has managed to expand their operations beyond 2 or 3 cities. Hence, competition for us changes on the basis of the city. Online aggregators like UrbanClap and Launderette are offering laundry services in select cities but the service delivery is further outsourced to vendors as these players do not have in-house setup for laundry. However, since we are all wooing the same customer, UrbanClap and Launderette would be by far the biggest competition.
What are UClean's plans for 2019-20?
Laundry, by nature, is an extremely hyperlocal business. For us, every neighbourhood in India presents an opportunity to set up a UClean. And there are 5000 plus sizeable neighbourhoods in the country. With just about 200 franchises, we have a long, long way to go! So our goal for 2019-20 is to continue focusing on rapid expansion. Build our presence further in Tier 1 cities by locking new locations and opening up new franchises. At the same time, focus on penetrating deeper into the country and opening up newer tier 2 and 3 cities. We’re currently operational in 43 cities with about 200 franchises. With another 5 months to go in 2019-20, the target is to end the year with a bang and have 300 franchises and a footprint in 60 cities of the country. Additionally, we are also all set to go live in November with our first international store in Kathmandu. So we would be looking to build Nepal further and open up at least one more SAARC country before the year closes.
