How the small and scattered laundry and dyeing industry, with half of the businesses losing money, can make a profit
Release Time:
2014-04-09 10:33
Source:
Chongqing Business Daily
Our city's laundry and dyeing industry generally suffers from small scale, dispersion, disorder, and low grade. There are more than 11,000 laundry shops, about 50% of which are operating at a loss.
Facing difficulties, experts suggest that our city could explore establishing a specialized corporate group to standardize the management of all laundry enterprises, create brands, and innovate services.
Chongqing Business Daily reports: Our city has 11,000 laundry shops with 50% operating at a loss, and over 60,000 disputes occur annually... Yesterday, business reporters learned at the Chongqing Laundry Industry Association members' meeting that in response to the widespread issues of small scale, dispersion, disorder, and low grade in our city's laundry industry, experts recommend considering group-based and brand-based strategies to break through.
Current Situation: About Half of Laundry Shops Are Operating at a Loss
When it comes to laundry shops, many citizens think of Jiecheng Dry Cleaning, a well-known laundry brand in our city that once had hundreds of stores but has now significantly reduced.
Luo Yi is the chairman of Chongqing Jiecheng Laundry Co., Ltd. and also the president of the Chongqing Laundry Industry Association. He told business reporters, "Our city's laundry industry generally suffers from small scale, dispersion, disorder, and low grade. Most laundry shops exist merely to solve their own employment issues." He introduced that currently, our city has more than 11,000 laundry shops, with an annual turnover of 2.5 billion yuan and 100,000 employees. Due to expensive storefronts and internal price wars, competition pressure has increased. Calculated by enterprise profit and loss standards, about 50% of shops are operating at a loss.
"Washing the same clothes at different shops results in different prices, exposing issues with washing technology." According to Liao Xiajiang, chairman of Chongqing Tiantian Laundry Co., Ltd. and executive president of the city laundry industry association, laundry shops engage in price wars, creating vicious competition. After price cuts, shops need to reduce costs and thus resort to "tricks" in washing technology, such as reducing washing steps or using illegal detergents, leading to continuous disputes.
"Our city's laundry shops have over 60,000 disputes annually, involving washing quality, damage compensation, and more," Luo Yi said. Currently, disputes in our city's laundry industry mainly focus on several aspects: first, the lack of clear quantitative standards for washing quality; second, difficulty in determining compensation prices; third, challenges in assessing and identifying clothing damage.
Suggestions: Breakthrough through Grouping and Branding
How can the laundry industry overcome the current difficulties? How to grow bigger and stronger? Wang Chongju, former president of Chongqing University of Commerce, has conducted special research on this.
"The laundry industry is an important part of the tertiary sector's life services, aligning with national and our city's policy directions for developing the tertiary sector," Wang Chongju said. Although Chongqing's laundry industry currently has a turnover of only 2.5 billion yuan, through government guidance and forming enterprises for standardized management, it can be developed into an important industry within our city's tertiary sector.
Wang Chongju said that facing the current difficulties, our city could explore establishing a specialized corporate group to standardize the management of all laundry businesses, forming a model where laundry shops operate independently but are managed uniformly by the enterprise. Additionally, within a certain number of laundry shops, a laundry brand could be established, such as exploring the creation of one brand per district.
At the same time, the business model should innovate. "Promoting a transition from scattered laundry to centralized laundry through storeless operations, improving the technical level of existing laundry shops, reducing unit costs, and standardizing industry management," Wang Chongju explained. Storeless operation is a new method integrating modern logistics, e-commerce, and modern chain operations. Through storeless operation, the laundry industry integrates clothing logistics distribution and chain operations. Professional distribution centers are established in each area, and citizens can complete laundry services via the internet or phone. Each piece of clothing will be assigned a QR code, allowing citizens to scan and check the washing progress at any time.
Measures
Establish a Dispute Mediation Committee
"Some clothes are worth thousands or tens of thousands, while others are worth only tens of yuan. When disputes arise between consumers and operators, how should washing quality and compensation prices be measured? There is an urgent need for a basis to judge these matters," Luo Yi said. To address laundry disputes, the Chongqing Laundry Industry Association is exploring establishing a Chongqing Laundry Accident Appraisal or Quality Dispute Mediation Committee, formulating related systems and methods, and actively carrying out coordination of washing accidents. Business reporters learned that the association will also work with relevant government departments to widely solicit opinions and formulate standard laundry service contract templates to regulate washing service behavior, ensuring there is a basis for reference and minimizing differences and disputes between operators and consumers.
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