A comparison: Online laundry vs Home laundry

Online laundry and dry cleaning services are creating a lot of buzz these days. They are claiming to provide all these services just at the tap of a button or by calling on some fancy toll free numbers just like you order a pizza.

Laundry is something which nobody likes to do on their own. Few years back there was only one option, go to your traditional dhobi where you were sure that your clothes won’t be treated in the right manner.

In last 2 years a number of startups have come out who are claiming to solve this problem in the right manner by using trained professionals and machines like Washer, Dryers, and Extractors. From them we can have accountability and hassle free experience like pickup drop at preferred timing, low turnaround time and quality as well.

Even today in India Cost factor is still the biggest parameter in deciding to use a service/product or not. So let’s do a quick cost analysis to find out the result:

  • Online laundry stores like Washingguns is offering a laundry package of 20 Kg @ ₹ 899 per month which is suitable for a family of 4 people in a month. This laundry package includes Wash, Iron, Packing, Home pickup and drop 5 times in a month. So a customer is getting all these facilities at just ₹45 per kg
  • Traditional dhobis charge ₹10 per piece for Wash and iron. But in this case the customer has to do pick and drop by himself. Also there is no guarantee of the quality of service and no commitment of turnaround time. In this case a customer has to shell out ₹ 40 for a kg of laundry (On an average 4 pieces of clothes constitute a kg).

Home laundry: Let’s take a look at all cost involved in doing laundry at home.

Average single load size = 5 kg

Number of clothes in a kg = 4

  • Washing machine cost: A fully automatic washing machine of capacity 8 kg will cost you around ₹15000. And you have to pay an additional ₹500 per year for machine maintenance. If machine is properly operated and maintained its life cycle would be of around 8 years. Assuming we operate machine once in a week then the cost of machine for using once would be:

Cost of Washing Machine = ₹15000

Maintenance cost = ₹500*8=₹4000

Number of years machine used = If machine is used once in a week and properly operated and maintained then it can last for 8 years

Number of times machines used in a year = we have assumed that we would be using machine once in a week so that equals to number of week in a year= 52

Cost of washing machine for single load (5 kg) =  (Cost of Washing machine+ Maintenance cost for 8 years) / (Number of year’s machine used) * (Number of times machine used in a year)

=(15000+4000)/ (52*8)

= ₹ 45

Electricity cost of machine for single load= ₹10

Detergent cost for single load= ₹10

Total cost for washing clothes of a single load = Washing machine cost per load + electricity cost + detergent cost

= ₹ (45+10+10)

= ₹ 65

Ironing cost for 5 kg load (If outsourced, as most of people can’t do ironing by themselves) = Number of clothes in a kg * 5*Ironing cost of single cloth

= 4*5*5

= ₹100

Total laundry cost of a 5 kg load = Washing cost+ Ironing cost

= 65+100

=₹ 165

So a customer has to shell out ₹ 35 (165/5=35) for one kg of clothes.

In all this calculation we have not taken into account the time and effort put in by the customer himself, like doing washing of clothes, taking clothes for ironing etc.

Laundry Cost per kg (in ₹)
Online laundry (Washingguns) 45
Traditional Dhobi 40
Home laundry 35

As we can see from the above table, if online laundry startups can work out on their unit economics and provide the quality of service as promised by them, the completely fragmented and unorganized laundry sector of size USD 33 billion is waiting for them.

Written by Anuj

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