Self-service launderettes are seeing a resurgence in Klang Valley

The laundry industry is growing in Malaysia.

In the Klang Valley alone, there are said to be more than 1,000 laundry outlets offering a variety of services, ranging from general washing to dry cleaning and ironing.

And more shops could join the fray as more people pay for dry cleaning and for the convenience of having their laundry done.

Additionally, with the ongoing water rationing, more people are forced to do laundry out of their homes.

As the laundry services market continues to grow, one segment that is expanding rapidly is the launderette segment, or self-service washers.

According to Cleanpro Laundry Holdings Sdn Bhd corporate communication director Chan Huei Ning, self-service laundries were introduced to the local market some 30 years ago. However, they did not do well and quickly slipped into oblivion.

Cleanpro Express offered 100 hours of promotional wash to customers at all stores in conjunction with the opening of its 100th store.

Chan said that some laundry-service companies tried unsuccessfully to revive self-service laundry in the late 1990s as the equipment used was not industrial-grade and often broke down.

A latecomer to the market, Cleanpro started out as a regular laundry service provider in 2009. The company has since diversified with a successful self-service segment, which contributed 40% of its RM30mil revenue last year.

“We are lucky to be able to do the right thing at the right time,” Chan said of the third comeback of self-service to the laundry market.

Reviving self-service

When Chan and his three partners established Cleanpro five years ago, the team had initially thought that there was little competition in the market.

“We thought there was a big market for drop-off laundry. There were no big players in the market, so we thought there were not that many competitors. But when we stepped in, we realised that there were about two to three laundry service providers on every block!

One of Cleanpro Laundry's outlets in Seri Kembangan.

“In fact, there was even a laundry association in Selangor that has been around for more than 80 years. So it wasn’t such a new thing,” Chan said with a laugh.

Cleanpro decided to move into the total-solutions segment, providing machinery, consultation, spare parts and cleaning chemicals to other laundry businesses.

In 2010, the company saw a blue-ocean opportunity in the self-service segment and tested out the market with a 24-hour outlet in Jalan Imbi, Kuala Lumpur under its subsidiary Cleanpro Express Sdn Bhd.

Chan said the outlet performed well, which encouraged the company to expand in this segment.

“It is not just about setting up a coin-operated laundry service. It is market driven. And we are seeing a change of lifestyle that helps grow this business. Laundry is becoming a family activity where people come in, load their laundry and go out for breakfast while the washers do their work,” he said.

Today, Cleanpro has 100 outlets under its belt, of which 80% are franchised outlets.

The company's 100th Outlet is located in PJ New Town. — Photos by LOW LAY PHON and CHAN TAK KONG

According to Chan, an outlet with six washers and four dryers would typically cost about RM380,000 to set up. It takes six months to break even operationally and about three years to see a return on investment kick in with margins of about 60%.

What is appealing about the self-service business is that it is a cash business that is fully automated.

“Manpower is quite a big issue in most businesses. But there is no need for labour in a self-service outlet. At most, you probably only need one person to come in periodically to collect money from the machines,” he said.

Chan noted that demand for self-service laundries is growing, not just here but also around the world, adding that it would not be long before the local market catches up to mature markets such as in the US where self-service laundries are the norm.

But research reports note that the US$5bil (RM16.2bil) launderette market in the US is declining with the increase of home ownership as most laundromats generally cater to rental properties. Additionally, there is rising competition from laundromats and dry cleaners that offer pick-up and delivery services.

Regional plan

Cleanpro celebrated a milestone last month with the opening of its 100th outlet.

“We may have launched our 100th outlet, but we still intend to expand our business further so that everyone can access our services more conveniently,” said Chan.

Chan acknowledged that water is a concern due to the current water rationing exercise in the Klang Valley, but said the company will increase its water support to the outlets that have been affected by rationing.

Cleanpro Express won the “Rising Star” award at last year’s The Star Business Awards and the company certainly has bigger plans ahead.

Chan said the company is looking at doubling its revenue this year and is eyeing regional expansion, particularly in Singapore and Thailand.

Cleanpro Express, which is starting to transfer its systems and solutions to its office in Bangkok, hopes to open 10 new outlets by the end of the year.

He noted that the market there is relatively mature for self-service laundries.

Nevertheless, he is optimistic that Cleanpro Express’ concept and experience will be well accepted there.

As for the Singapore market, Cleanpro Express currently has 13 outlets there and Chan said, given the high population density, there are opportunities to be had.

However, acceptance of self-service laundries is still low there due to restrictions on outlet designs.

“There is rapid growth in the self-service market. We won’t stop expanding and we are focused on the Asean market.

“We want to be the leading laundry-service provider in the region,” he said.

But Chan said Cleanpro is being careful not to expand too fast and will continue to diversify its markets and products to stay ahead.