Laundry workshops overwhelm formal laundries: washing a bed sheet earns only a few cents

Earning a few cents washing bed sheets, formal laundry factories are "very poor and miserable"

The low-cost "muddy waters" of small workshops make it difficult for formal enterprises that still want to maintain some quality. Facing the current industry situation, the Shanghai Laundry Industry Association and some professionals have provided their interpretations and shared their views on the future development of the laundry industry.

Our newspaper's undercover investigation team

Earning three thousand but spending ten thousand, how to compete with small workshops?

Malicious competition

Formal enterprises engage in low-margin price wars with small workshops

General Manager Ji of the laundry factory told reporters that laundry workshops are "very chaotic and excessive," while formal enterprises are actually "very poor and miserable."

Ten years ago, the market guide price for washing a set of hotel linens was just over 5 yuan. Ten years later, labor and material costs have risen, but washing prices have barely changed.

"Employee comprehensive insurance rose from 200 yuan to over 600 yuan, and wage costs increased by 20% to 30%. Some material costs even tripled." Manager Ji carefully calculated the accounts. After all the calculations, washing prices remain stagnant while costs keep rising. For many laundry companies, the only thing they can sacrifice is the quality of washing. "This is the most helpless choice they make to survive."

So, what exactly is the reason that washing prices cannot rise healthily? Manager Ji believes the culprit is malicious competition.

"In the past, almost every hotel had its own laundry room. Later, considering environmental protection requirements, laundry rooms were gradually removed. About a decade ago, many workshop-style laundries emerged, replacing hotel laundry rooms. Their costs were extremely low and their competitiveness was astonishing."

These laundry workshops were able to survive and develop largely thanks to the "short-sightedness" of many hotels and restaurants.

"For example, our formal enterprise can only make a slight profit by charging 1.5 yuan to wash a restaurant tablecloth, while laundry workshops can directly lower the price to 0.7 or 0.8 yuan. How do they do it? By cutting corners and taking shortcuts," said Manager Ji. Formal laundries and workshops use different processes and materials to make linens look equally clean and new, but a simple test can reveal that workshop-washed items fail standards in pH value and bacterial count. But so what if they fail? Customers don't understand. When hotels and restaurants choose, nine times out of ten they pick the cheaper option. Only most four-star and above hotels conduct factory inspections, checking equipment and certificates. Many five-star hotels even set their own laundry standards and invite experts for testing.

But compared to the rapid expansion of chain hotels, the business from four- and five-star hotels is really insignificant. The consequence of malicious competition is rampant price cutting. Under the pressure of low prices from workshops, formal laundry companies dare not raise prices and have been operating on "thin profits" for many years.

"Ten years ago when I ran a laundry factory, the money earned in two years was enough to buy a house," recalled a laundry factory owner. "But now, we haven't raised prices for over ten years, and profits are getting lower and lower. Such a large factory only earns a few thousand yuan a month. Now we know that in the laundry business, even if you insist on standardized operations and do your best, profits are only below 5%. The worst is earning just a few cents per bed sheet."

The situation is similar in medical and sanitary laundry factories, where some large enterprises are often "bullied" by small laundries.

"For a quilt cover, our pricing is 1.5 to 1.7 yuan, but private enterprises offer only 0.9 yuan! For a bed sheet, our pricing is 1.2 to 1.4 yuan, but private enterprises offer only 0.8 yuan," said General Manager Wang of a state-owned medical laundry factory. "In fact, industry insiders know that if washed according to standards, our pricing is already at the floor with no room to lower further."

According to Mr. Wang, the most common way for non-standard laundries to reduce costs is by tampering with washing aids. The price of one ton of detergent is about 30,000 to 40,000 yuan, while one ton of liquid alkali costs only 500 to 600 yuan. The washing effect judged by eye might even look "cleaner" with liquid alkali. To cover up, these non-standard enterprises usually rinse the laundered items with bleach mainly composed of sodium hypochlorite to neutralize some of the residual strong alkaline substances. A web search shows sodium hypochlorite is defined as a "corrosive" and "can strongly irritate skin and mucous membranes."

Foreign capital takes over

Local formal manufacturers are besieged from all sides

Industry insiders know that nowadays, formal laundry factories not only face exclusion from domestic small workshops but also have to confront the reality of foreign laundry companies aggressively entering the Shanghai market.

Mr. Wu, head of a formal laundry factory, often encounters this embarrassing situation of being attacked from both sides. "Some customers who cooperated well suddenly left one day. We were puzzled and investigated, finding that some were taken by small workshops, and others switched to foreign laundry companies."

"Recently, we lost many foreign hotel clients. After inquiry, it turned out they chose a foreign laundry company that just entered the Shanghai market," Mr. Wu revealed. This foreign laundry company has a strong group background and solid strength. "Their production equipment and washing environment are excellent, washing procedures are standardized, and the results are clean and hygienic."

Like small workshops, foreign-funded laundry companies also engage in price wars. "For washcloths, we can only make a profit at one yuan each, but foreign-funded laundry companies can push the price down to 50 cents." Mr. Wu believes that the purpose of foreign-funded laundry companies is to operate at a loss to gain market share, "First use low prices to occupy the market, then slowly develop."

But compared to the two, Mr. Wu hates workshops more, "If we lose to a formal company, I accept it wholeheartedly. I hope foreign companies can first improve the quality of the entire industry and squeeze out the small workshops, so that the whole industry may have more room for development. But now we are in the most painful stage."

Costs are too high

Monthly profit is only three thousand, disinfection costs ten thousand

When talking about the issue of separating clean and dirty sanitary clothing, General Manager Wang said that technically there is no difficulty in separating clean and dirty, the difficulty still lies in the word "cost."

"Let me tell you a true story," General Manager Wang told reporters, "I have a friend in the industry, a very honest person who never cuts corners in laundry. He also has a saying — sanitary clothing, the most important thing is hygiene. However, when it comes to separating clean and dirty, he is often at a loss."

Initially, to achieve separation of clean and dirty, Wang's friend planned to equip his factory with two trucks, one specifically for transporting dirty clothing, and the other for returning clean clothing. "Good idea, right? But he calculated the costs over and over and gave up. Maintenance costs, gasoline costs, driver wages... they all seem like small expenses but could become the 'last straw' that breaks the laundry factory."

Later, Wang's friend changed his approach — using only one truck but performing a thorough disinfection before transporting clean clothing. Unfortunately, even this measure could not last long. "Deliveries happen every day, so cleaning and disinfection must be done at least once a day," Wang said, "In a month, the disinfection cost for one truck alone exceeds ten thousand yuan! But do you know what their laundry factory's monthly net profit is? Only three thousand yuan."

> Technical advantages of formal enterprises

Clean floors, sewage runs through dedicated pipes

Entering the operation room of a formal company, the reporter's first impression was: the environment is relatively clean. Although the cement floor shows wear, there is not a single water stain. This is in sharp contrast to the pools of sewage seen in laundry workshops before.

Use "white powder" instead of "yellow powder"

In the factory of a formal company, one can see a row of plastic barrels about half a person tall, all filled with white laundry powder, unlike the "yellow powder" commonly seen in laundry workshops. Moreover, the granules of the white laundry powder here are finer than those in workshops. The packaging of the laundry powder includes brand, manufacturer, and product batch number.

It is understood that the "yellow powder" used in laundry workshops costs only half as much as the white laundry powder. A laundry factory manager pointed to a bag of white laundry powder and said: "This kind of laundry powder costs about 270 to over 300 yuan per bag, comparable to household laundry powder, while a bag of yellow powder costs only 120 to 130 yuan."

Use "fiberglass" laundry carts for transportation

In the operation rooms of formal companies, laundry carts are mostly made of fiberglass. Fiberglass carts are not easily damaged, have smooth surfaces, are easy to clean, and do not stick to dirt. The iron racks used by small workshops rust easily, and rust stains are also a form of contamination for cleaned laundry. Woven bags tend to stick to a lot of dirt.

However, fiberglass laundry carts are expensive, costing more than 1,000 yuan each. Small workshops can buy plastic laundry carts for three to four hundred yuan, and iron rack carts are even cheaper.

Equipped with large machine ironing equipment

The reporter saw that several formal laundry factories basically all have large ironing equipment. In laundry workshops, besides washing machines and spin dryers, ironing machines are hard to find, often replaced by several simple steam irons.

Workers must undergo "pre-job training"

In formal laundry factories, laundry workers operating washing machines generally undergo about a month of "pre-job training." More well-established companies even provide three to four months of training for employees.

But in laundry workshops, untrained personnel can start working directly. Alkaline water has strong stain removal power and can easily clean various stains. As a result, the technical requirements for practitioners are almost zero.

> Management discussion

Industry status

Too many small workshops, total number of laundry companies still unknown

Secretary-General Ren Fengmei of the Shanghai Laundry and Dyeing Industry Association said in an interview: "In fact, we currently don't even know how many laundry factories there are in all of Shanghai."

The reason for not knowing the total number is partly because many laundry workshops have not obtained business licenses. "They just rent a place casually, buy a few washing machines, hire a dozen people, and open quietly without any procedures," Secretary-General Ren said. "These small workshops run high volumes during peak laundry seasons and can make a lot of money. When the off-season comes, they just sell the machines and pack up."

However, such laundry workshops are precisely the high-risk areas for quality problems. "They usually keep a low profile, but once disputes arise with customers, they come to our association for professional appraisal, asking us to 'stand up' for them," Secretary-General Ren told reporters. Once, she received the owner of such a laundry workshop, "They damaged the sheets of a chain hotel during washing, and when the hotel sought compensation, they came to us for help in determining responsibility." The association's appraisal staff followed procedures to request the laundry contract and invoice from the workshop owner, "Unexpectedly, he produced a blank note, saying the contract was simply handwritten. When our staff asked for the company name and address, he said his workshop had no name and the address was inconvenient to disclose..."

Apart from paying fees, there are no benefits; formal enterprises are unwilling to join.

The Shanghai Laundry Industry Association was established in 1998 and currently has only about 90 member units. Secretary-General Ren mentioned that part of the reason for the inability to count the total number of laundries is that some formal enterprises have refused to join for many years.

The head of a formal laundry company once bluntly stated: "Although the industry association has been calling for us formal enterprises to join, we are not very willing. Because we see no value in joining—it neither proves our legitimacy nor brings more customers, but requires us to pay membership fees out of pocket."

"The nature of the industry association is a social organization voluntarily formed by Shanghai's laundry industry and related enterprises and institutions," Secretary-General Ren explained, "Whether enterprises join or not, we can only persuade, not force."

Secretary-General Ren said that for many years, the association has had a wish that government departments could authorize them to take some measures to regulate enterprise behavior, "such as providing qualification training for laundry practitioners. If we could issue qualification certificates and review practitioners' qualifications, the industry's development would be healthier."

The path of development.

Although industry standards are not lacking, there are too few "hard indicators."

Regarding whether standards exist to regulate this industry, Secretary-General Ren gave a positive answer: "There definitely are! At the national level, there are the 'Laundry Industry Management Measures' and 'Laundry Industry Service Quality Requirements.' Shanghai has the 'Laundry Industry Service Quality Standards,' and soon, several more standards will be introduced in Shanghai.

So if the biggest problem in the laundry industry in previous years was imperfect regulations, then in recent years, the problem has been enterprises' poor implementation of standards."

"For example, the chemical materials used in laundry are clearly specified in the standards, and each chemical must have a certificate of conformity," Secretary-General Ren said. "But insiders know that quite a number of laundry workshops use cheap, unqualified chemicals, some of which are strongly alkaline and can easily burn the skin, while others are toxic."

It is understood that the Shanghai Laundry Association appraises more than 300 laundry disputes annually. "The causes of disputes vary, but if the responsibility lies with the laundry factory, it is mostly due to improper laundry materials or the low skill level of operators causing damage to clothes and linens."

Although many standards exist to regulate the laundry industry, many insiders believe the regulations are still too few.

A veteran practitioner told reporters that most standards only regulate the qualifications of practitioners and enterprises, but do not directly require laundry procedures or the quality of laundered products. "For example, linens and clothes must be ironed at a certain temperature, and pH values and bacterial counts must be controlled within certain ranges... There are not enough hard indicators, nor is there routine testing, which gives many hotels and restaurants the opportunity to arbitrarily choose laundry factories."

Subsequent interviews by reporters confirmed this veteran's statement—many formal laundry factories rely entirely on self-formulated washing procedures, and some "high-standard" five-star hotels have to prepare their own testing equipment.

Expecting standards; suggesting "integrated rental and laundry services."

Secretary-General Ren revealed that in recent years, the association has formulated some industry rules and agreements, such as the "Shanghai Laundry Industry Rules and Agreements," "Shanghai Laundry Industry Service Standards," "Shanghai Laundry Industry Quality Standards," "Shanghai Laundry Business Contract Format Clause Operation Standards," and "Shanghai Laundry Industry Consumer Dispute Resolution Measures," attempting to regulate the behavior of practitioners across the industry.

"In addition, as far as I know, relevant municipal departments are actively preparing to introduce more laws and regulations to regulate the development of the laundry industry," Secretary-General Ren said. The future of the laundry industry will definitely move toward more standardized and healthy development.

During an undercover investigation, a workshop owner mentioned that he never dared to take orders for medical textiles because a nearby laundry workshop mixed medical textiles with commercial linens and was shut down a few days ago. The head of a formal laundry factory also revealed that they almost failed the annual inspection due to unsanitary production conditions, "The trend now is becoming increasingly strict."

Secretary-General Ren said that although more regulation is the general direction, the process requires time: "Industry reshuffling cannot rely solely on the joint efforts of a few dozen formal enterprises. For example, only when most unlicensed small workshops are shut down can formal enterprises have room to raise prices." Secretary-General Ren also expressed hope that restaurants, hotels, and other customers strengthen quality management of linens, "If small workshops cannot attract business and cannot survive, then formal enterprises have a chance to survive."

During the interview, several large-scale laundry enterprises also expressed another wish: to achieve integrated rental and laundry services for textiles. "On one hand, laundry enterprises purchase textiles and rent them to hospitals, like washing clothes for themselves, so laundry enterprises would no longer dare to use strongly alkaline detergents to damage textiles; on the other hand, the profit from renting textiles can provide funds for more formal enterprises to develop healthily."