Laundry business optimistic about future prospects

Laundry business optimistic about future prospects

Rudijanto, Contributor, Jakarta

As Indonesia has struggled through multifaceted crises and developed over the years in its efforts to embrace the modern global era, Indonesians living in major cities have also embraced a more cosmopolitan lifestyle, thus opening the market to a necessary service: the professional laundry business.

"The lifestyle of Indonesians has changed, especially with both husband and wife working so that they have no time to do the laundry themselves. That is why they want the easiest solution -- sending their clothes to the launderer's," Jeeves of Belgravia general manager Marcus Taslim said.

Aside from lifestyle changes, the gradually improving economy has also boosted the purchasing power of people, reflected in a boost in the purchase of expensive clothes, bags and even carpets, especially those imported from exclusive boutiques and manufacturers.

Such exclusive goods require professional laundry services -- more than the laundering that can be done at home -- and laundry companies meet such demands.

The rising demand for professional laundry services is not solely restricted to the high- and high-middle social strata, but also applies to the lower-middle stratum. As such, laundry counters can be found from luxury neighborhoods to lower-middle class housing compounds.

Consequently, professional launderers vary in the services they offer depending on their market segment. Such market segmentation is reflected in the method of laundering, from expensive machines to manual labor.

"When people ask us to open a new counter in a certain area, we will survey the location first to see whether there are luxury housing complexes in the area, because our market is middle-upper segment," said Anita Firda, marketing manager of Laundrette.

Laundrette's counters are usually found in supermarkets generally frequented by the middle-upper class, such as Hero, Golden Truly and Carrefour outlets.

Operating since 1985, Laundrette has 80 outlets in Jakarta, 10 in Bandung and two in Bogor. The company enjoys a steady growth of between five to 10 percent per annum in spite of tough competition from other companies targeting the same market segment.

While Laundrette seems widespread in Jakarta, other professional launderers, especially those catering to the middle- lower market in non-luxury neighborhoods, still have much room for expansion.

"No, we are not competing with them because their market is higher than ours," said Arief Bagus, owner of Mawar Top Laundry & Dry Cleaning, which has a mere 10 outlets across Jakarta's lower- middle class housing compounds.

Arief admits that the competition in his market segment is tough, and many new players are entering the market. With only 20 employees, Mawar is a small-scale professional laundry service making a living from the changing lifestyle of Jakarta residents.

The laundering method of these small-scale entrepreneurs are still traditional. Some of them, like Mawar, even dry the laundry on rooftops. Using local commercial detergents, such as Rinso or Total, the final result cannot be compared to exclusive launderers like Laundrette or Jeeves, but they are able to meet the needs of their market segment.

Operational procedures and methods of exclusive launderers are on another level altogether, and are undertaken in accordance with specific standards. Using branded machines and imported, special wells and water sanitizers to get the cleanest water, these large laundry companies have invested much in both equipment and human resources.

"We follow a high-standard operating procedure. Our machinery is more sophisticated, and our chemicals are imported from Germany. We train our people abroad and provide constant training," Marcus said.

Operating in Jakarta since 1996, Marcus said confidently that Jeeves of Belgravia, taking the brand name of London-based Jeeves of Bavaria under a franchise arrangement, had no competitor in the upper market segment.

"We are the only launderer for the A market segment. We focus on the A segment because we know the character of customers in this class -- famous people, politicians and successful businesspeople who see their clothes as investments," he said.

Marcus may feel secure in the upper market segment, but other companies have begun to enter this segment, although admittedly, they operate in a slightly lower segment than Jeeves.

Said Laundrette's Anita, "Jeeves operates in a higher market segment and ours is slightly lower, but I think our quality is the same. We have even succeeded in entering some apartment complexes that already had a Jeeves counter. I think the only difference between Jeeves and us is that we are a local brand while theirs is foreign."

The competition looks to toughen up if Jeeves decides to enter the middle-upper segment, or the B segment. Marcus confirmed that he was monitoring the B segment, although he will need to conduct thorough feasibility studies before making a decision.

"If the timing is appropriate, we will enter this segment," he said, but did not mention a specific date.

Jeeves has nine branches in Jakarta. Claiming to enjoy between 15 to 25 percent annual growth, Marcus plans to open a Central Processing Unit (CPU) in Surabaya next year. Currently, the company has only one CPU in Jakarta.

"We centralize the processing of clothes from all counters at the CPU, because we can control the quality for consistency," he said.

The laundry business looks set to grow in major cities, particularly Jakarta, as the demand for this particular service continues to rise. With the festive season of Christmas and New Year fast approaching, launderers will have lots of work to do.

"Our business grows by 25 percent to 30 percent during this season, compared to other months," said Anita.

Like in other service-oriented businesses, the peak season for the laundry business is the Idul Fitri, Christmas and New Year holidays.

While the 1997-1998 monetary crisis slowed some launderers, some saw this crisis as a blessing: As people tried to cut back on their clothing budget, they tended to extend the longevity of their existing wardrobe by having them laundered professionally.

"The crisis has made the price of imported quality clothes expensive. Although we don't have enough data since we started just before the crisis, we can say for certain that we grew exponentially during this period," Marcus said.

Even with industrial washing machines and other heavy equipment, the laundry business remains a labor-intensive industry that absorbs many workers, which bodes well in a country with a rising unemployment figure.

Professional launderers are indeed a blessing for a nation that is still struggling to fully recover, and you can rest assured we will be putting our best foot forward, looking our very best.