Development, Evolution, and Analysis of the Laundry Market

In some foreign cities, business activities often see shops closing and reopening for various reasons, but two types of shops can survive: bakeries and laundries. This is because bakeries provide food for survival, while laundries help us maintain dignity and beauty. In today's social life, washing has become as important as eating and drinking, an indispensable part of human life.

1. Current Situation of the Laundry Market in Europe and America

Some economists use the total amount of socialized laundry and the advanced level of dry cleaning equipment per ten thousand people as important indicators to judge whether a country's or region's economy is developed and the living standards of its people. It is understood that Italy has a total population of about 50 million, with 20,000 dry cleaning shops, averaging one dry cleaner per 2,500 people. Spain has over 40 million people and more than 4,000 dry cleaning shops, averaging one dry cleaner per 10,000 people. Japan has 120 million people and 50,000 laundries. In 2000, the US laundry industry's wet cleaning revenue was 26 billion USD, Germany's was 5.1 billion marks, with wet cleaning revenue at 2.8 billion marks.

The laundry market in Europe and America has shown a downward trend in overall industry benefits due to slow national economic growth. A report on fabric care in Canada and the US stated that the industry's revenue declined by 8% to 25% over the past few years; Germany's economic pressure has also reduced the number of laundry companies, decreased profits, and even caused closures. They complain that the reasons are: first, too fierce market competition with too many laundries; second, rising energy costs (energy costs in the US rose 12.6% in 2001), and economic downturn affecting consumption.

In Germany, there are 6,450 laundry enterprises. Small and medium-sized enterprises account for 91%, contributing one-third of total revenue. In Germany's laundry market of 5.1 billion marks, wet cleaning revenue is 2.8 billion marks, and dry cleaning accounts for 2.3 billion marks. In the Europe and America laundry market, dry cleaning accounts for 35% of revenue, and wet cleaning accounts for 65%.

2. Development Trends of the Domestic Laundry Industry

Development of the Textile Rental Market in the Laundry Industry

Textile rental is a popular laundry service method in Europe and America. Laundry companies provide bed sheets, duvet covers, towels, bath towels, tablecloths, work clothes, uniforms, etc., to users who need laundry services. The clients are mostly hotels, medical units, restaurants, factories, schools, government agencies, and organizations.

Laundry companies engaged in textile rental are generally large-scale, mainly focusing on wet cleaning, requiring at least 20 tons of daily laundry volume to be economically reasonable. Their production lines are equipped with tunnel washers (washing dragons), single machine integrated systems (SGS), ironing machines, folding machines, packaging machines, and other advanced laundry equipment. Worldwide, 20% of companies use textile rental services. In Germany, this figure reaches 35%; in the UK, the textile rental market's annual output value reaches 700 million pounds, with 400 companies employing 40,000 people. In food processing, 70% use textile rental, and 78% of hotel room textiles use textile rental. The benefits for users adopting this rental service are avoiding the purchase of textiles and the manpower, material, financial resources, space, and all troubles required to operate a laundry factory. For providers, it improves utilization rates, reduces energy consumption, and increases revenue. Because textile rental achieves a win-win for both supply and demand, it has the following characteristics in Europe: strong growth momentum, increasing concentration, with the main features being specialization and diversification. The market size will no longer expand, but the number of rental companies will continue to grow.

Development of Social Laundry Central Factories

In China, building a small laundry factory costs relatively little. Buying several large industrial washing machines, ironing equipment, hiring a few workers, and renting a suitable factory can start operations directly. Due to the low threshold, there is an oversupply of wet cleaning factories, and competition is relatively fierce. Small laundry factories can only compete by lowering fees. Lower fees lead to a decline in service quality. According to a survey of the Chinese laundry industry, more than 70% of domestic wet cleaning factories do not meet quality standards. The wet cleaning market urgently needs large laundry factories to take charge of this industry. The following trends also determine that domestic social central laundry factories will develop towards centralization and energy saving. In the near future, large central laundry factories will become the trend, and the wet cleaning industry will face a reshuffle.

1) Sharp increase in industry energy costs: rigid growth in the costs of water, steam, and electricity.

2) Increasing environmental pressure: laundry is a high water-consuming operation, and control over water supply and sewage discharge is becoming stricter.

3) Labor pressure: the proportion of the labor force is decreasing, making recruitment difficult and employment unstable, resulting in unreliable laundry quality.

4) Disorderly market competition: irregular enterprises engage in malicious price competition, affecting quality and service.

5) Rapid increase in customer outsourcing: laundry outsourcing business is becoming more common.

6) Increased market concentration: marginal effects of scale cause small enterprises to be continuously swallowed up and acquired.

7) Higher quality requirements: demand for clean linens, improved hygiene standards, and environmental protection needs will increase.

8) A large number of hotels, especially economy hotels, have outsourced laundry, fostering the development of large social professional central laundry factories that adopt more energy-saving, environmentally friendly, and highly efficient washing dragon production lines.

9) Hospital systems are gradually moving towards social outsourcing of laundry, with over 70% of hospital laundry business outsourced, also promoting the development of specialized central laundry factories.

10) The rapid development of railways has greatly increased linen laundry volume, and railway laundries are continuously growing and expanding.

The above development and transformation driving forces will form two mainstream service models in the future: The first is large-scale central laundry factories, mainly water washing with dry cleaning as a supplement. The second is a chain operation channel-based model, covering urban and rural residential communities, schools, commercial centers, office buildings, and high-star hotels. It mainly uses dry cleaning with water washing as a supplement, collecting items in a decentralized manner and washing them centrally. This also forms another type of central laundry factory focused on garment washing. Other laundry service formats basically fill market gaps. The development of the mainstream market has greatly promoted the rapid development and popularization of Laundry Dragon and SGS in China.

Strong demand growth for energy-saving equipment such as single-machine integrated systems (SGS) and tunnel washers (referred to as Laundry Dragon).

To save energy, Laundry Dragon was successfully developed in Europe in the 1960s and has been continuously improved over decades. It is now widely used in economically developed countries in Europe and America. The single-machine integrated system SGS was applied and popularized even earlier than this.

The emergence of the textile rental market and large-scale central laundry factories is a need for socialized, industrialized, and specialized laundry services. Laundry Dragon and the single-machine integrated system SGS provide the equipment conditions for enterprise growth. Encouragingly, textile rental business has already started in some southern cities of China, and large laundry factories are emerging nationwide, promoting the vigorous and rapid development of Laundry Dragon and SGS domestically.

The energy-saving and cost-reducing effects of Laundry Dragon are very obvious. However, Laundry Dragon has some usage limitations. It is more suitable for washing lightly soiled items. Because the Laundry Dragon washing process requires a squeezing step, some items cannot be washed by Laundry Dragon, such as work clothes with buckles, curtains, carpets, etc. The single-machine integrated system SGS is suitable for various laundry items, has better system scalability, easier maintenance, and can wash heavily soiled items. Compared with Laundry Dragon, the energy consumption difference for washing the same amount of items per unit time is not significant. Both Laundry Dragon and SGS have great advantages in energy consumption compared to single machines. In fact, the single-machine integrated system can completely replace Laundry Dragon, but due to the types of items washed by Laundry Dragon, it cannot replace SGS.

The following is a brief comparative analysis of Laundry Dragon and the single-machine integrated system washing the same amount of items in the same time, for readers' reference.

From the above table, it can be seen that to complete washing 14 tons of linen in 10 hours, 25 single machines are needed, while SGS only requires 11 units. Therefore, SGS, like Laundry Dragon, greatly reduces energy consumption and also saves labor. Operating Laundry Dragon and SGS both require 2 people.

In countries such as Europe, America, and Japan, there is on average one Laundry Dragon per 300,000 to 500,000 people. Germany is the country with the most widespread Laundry Dragons, with 800 Laundry Dragons for 80 million people nationwide, averaging one Laundry Dragon per 100,000 people. Japan has 900 Laundry Dragons for 120 million people, averaging one per 140,000 people. Hong Kong has 20 Laundry Dragons for 7 million people, averaging one per 350,000 people. China has 1.3 billion people; if calculated at one Laundry Dragon per million people, there should be 1,300 Laundry Dragons. Currently, there are about 120 Laundry Dragons domestically. The next 10 years will be a golden period for rapid growth of Laundry Dragons in China. Abroad, almost every Laundry Dragon is equipped with SGS and sling systems. In Japan, due to space constraints, the number of SGS systems far exceeds that of Laundry Dragons. Because SGS requires less investment than Laundry Dragon and is more flexible and convenient to configure, we can foresee more demand for SGS domestically.