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.