Rongchang e-Bag Wash: A Guide for Traditional Enterprises to Transform into Mobile Internet

Actually, the phrase "The customer is God" pasted on the glass of street shops back then was also a kind of awareness of "user experience," just at a more basic level, and customers themselves didn't have many demands: as long as the staff greeted with a smile, let you try on any clothes you wanted, and showed no impatience, it was already great—looking back now, this was just basic courtesy from merchants and clerks. But with the advent of internet thinking, "customers" were renamed "users," and then users were "spoiled": I don't want to do laundry, I'm too lazy to take it to the dry cleaner, and dry cleaning is expensive, so annoying—no problem, the internet is here to serve you: order on Rongchang e-Bag Wash via WeChat, someone will come to pick up your clothes, give you a bag, you can pack as much as you want, and the price is a flat 99 yuan. Therefore, in the legendary and rapidly changing internet era, if you don't quickly think of ways to make "potential users" play conveniently, happily, and with passion, potential users will always ignore you. Anyway, with the strong wave of "internet thinking," the beautiful era for users has arrived.

Then traditional industries became anxious: how should we continue to serve these "grandpas with a heightened sense of being served"? Rongchang Laundry, a veteran traditional industry with nearly 25 years in the laundry business, provided a model: don't rush, just inject internet genes into yourself. Genes, not just setting up a website and calling yourself internet-based.

Zhang Rongyao, chairman of Rongchang, founded Rongchang Laundry in 1990 when Lu Wenyong was just a three-year-old kid. Twenty-four years later, Lu Wenyong became the CEO of Rongchang's new gene "Rongchang e-Bag Wash." In his eyes, Zhang Rongyao is "the traditional entrepreneur who understands internet thinking the best." These two partners, twenty years apart in age, are like their own product: the veteran but open Rongchang moves forward together with the new, internet-style Rongchang e-Bag Wash.

The first rule of internet transformation: inject mobile internet genes into the product.

First, you need to grasp the characteristics of mobile internet: on the basis of the internet being "cheap + convenient," add "entertainment." Rongchang Laundry has opened over a thousand franchise stores nationwide in 24 years. Traditional laundry charges by piece, requiring customers to go to the laundry shop and pick up their clothes themselves. High prices, time-consuming trips for pick-up and delivery, and disputes over clothing issues damage relationships. In the era of user supremacy, anything that makes users unhappy must be strictly prohibited, and any service that makes users "lazier" must be provided.

Downloading an app is too troublesome; users only need to follow the WeChat account; going back and forth to the dry cleaner is too exhausting, e-Bag Wash picks up clothes at your door; washing just a couple of pieces costs over a hundred and is too expensive, e-Bag Wash gives you a bag to pack as you like, all for a flat 99 yuan. Moreover, e-Bag Wash actively teaches users how to pack more clothes and even selects weekly and monthly "Bag Kings"—users who pack the highest-priced laundry and get free washing. Usually, the clothes packed in one bag would cost about 200 yuan under the normal "per piece" charging, but the current "Bag King" record is a user who packed clothes worth 1200 yuan at normal cleaning prices but still only paid 99 yuan at e-Bag Wash. This is what is called: cheap and convenient.

Besides, it constantly finds ways to make users feel fun: when the "Domineering CEO and Pure Schoolgirl Romance" broke out, Rongchang e-Bag Wash looked for "pure and kind little Tian," and anyone with "Tian" in their name could wash clothes for free; when "My Love from the Star" was popular, laundry came with "beer and fried chicken"; inviting you to drive a Tesla, Virgo Alliance, and so on, making users feel: laundry can be this fun?

"You have to let users feel involved; with involvement, they will pay attention to you," said Zhang Rongyao.

The second rule of internet transformation: shareholders must also have internet temperament.

Enterprises must be selective about investors; if the tone doesn't match or the philosophy differs, more troubles will follow.

Rongchang e-Bag Wash received investment from Tencent. Regarding the choice of investment partners, Zhang Rongyao said: "Rongchang e-Bag Wash needs an investor whose values align with ours, especially in understanding mobile internet and user service. We must always put user experience first." With this philosophy, Rongchang e-Bag Wash chose to cooperate with Tencent, which also highly values user experience. Of course, Rongchang e-Bag Wash is a product born from WeChat ordering, and this "gene" factor should be one of the reasons Rongchang e-Bag Wash chose Tencent.

The third rule of internet transformation: the team must be native to mobile internet.

Zhang Rongyao agrees with "internet thinking," which he believes centers on "equality, openness, transparency, and freedom." Rather than saying employees are unmanaged, it's more like the relationship between Zhang Rongyao and his "partners" is filled with this internet thinking and philosophy everywhere. Born in 1987, after Lu Wenyong became CEO, all laundry brands and companies under Rongchang are coordinated by him—this alone shows Rongchang's determination to transform into internet and Zhang Rongyao's broad-mindedness.

The average age of the Rongchang e-Bag Wash team is close to post-90s; they are true internet natives, diverse, young, free, and full of dreams. They also best understand e-Bag Wash's young target customers and the enjoyment of "user experience." Behind internet products, there must be a group of young people with native internet genes, and a set of new rules for working with young people.

Zhang Rongyao once talked with a township enterprise owner about employee management. That owner’s company had many external businesses, and employees were often out. How to prevent employee turnover? The owner laughed: "No problem, their wives all work in my company." This completely non-transparent "management" surprised Zhang Rongyao. "In traditional enterprises, the boss is like a king, and the relationship with employees is command and execution. Now it's completely different; the rules have changed. Bosses and employees should be equal, open, and personalized." Zhang Rongyao said that in internet companies, team management is about letting each employee realize their value: "In this company, in this position, they have a sense of existence, achievement, and a strong sense of belonging to the company."

Core rule of transformation: timely change of business model.

Rongchang started from "laundry technology" franchising to selling dry cleaning equipment authorized by the Italian brand "Ilsa." Franchise chains rapidly expanded Rongchang's scale nationwide, but this model had serious drawbacks—heavy assets, new store site selection, talent loss, and importantly, many franchise stores but cash flow not controlled by Rongchang.

Zhang Rongyao is a person with a calm temperament but an open mindset. In 2000, he wanted to cooperate with Sina to do online laundry, but the business development was restricted by the delivery and payment systems at that time. Later, he studied at China Europe International Business School, and Rongchang Laundry was often used by professors as a case study. Inspired by this, after graduation, Zhang Rongyao created the "One Belt Four" + "Network Card" business model. "One Belt Four" means one store equipped with laundry equipment radiates to four collection points, and each collection point can cover multiple communities, reducing assets and solving the problem of talent shortage. The "Network Card" brings Rongchang directly to the end users; by purchasing one card, users can consume at various stores. Each store settles accounts with Rongchang based on the consumption through the "Network Card," which is also used for resource allocation and eliminating franchisees. While user satisfaction improves, cash flow is centralized at Rongchang headquarters.

The fundamental reason for the transformation of Rongchang's business model lies in Zhang Rongyao's realization that he ultimately serves every real user, not the franchise customers. Rongchang's goal is service, not selling equipment. So when the mobile internet boom arrived, relying on years of transformation accumulation, Rongchang e Laundry was realized and exploded through the form of WeChat. Convenient, cheap, and combined with the entertainment value given by the young team, e Laundry became very popular. Now, Rongchang e Laundry has started recruiting angel users in Tianjin, Shenzhen, and Shanghai to experience this new laundry model for free.