National Survey Report on the Basic Situation of the Laundry and Dyeing Industry

Research on the Basic Situation of the National Laundry and Dyeing Industry

The laundry and dyeing industry refers to the business services engaged in washing, ironing, dyeing, mending, coating, and maintenance of clothing, linens, and leather products. With the continuous improvement of people's living standards and the constant renewal of new fabrics and related products, the business services of the laundry and dyeing industry are also undergoing continuous changes. For example, the proportion of original clothing dyeing and mending services in laundry business has significantly decreased, but at the same time, higher requirements have been put forward for dyeing and mending services. After rapid development in the 1990s, China's laundry and dyeing industry is gradually entering a steady development stage, with an increasingly prominent position in the tertiary industry. It has played a huge role in prospering the market economy, facilitating people's lives, and providing employment. Especially various types of laundries (collection points) have sprung up like mushrooms in urban residential communities, bringing great convenience to people's lives. The laundry and dyeing industry has also evolved from a labor-intensive industry mainly relying on manual work with masters teaching apprentices to a modern laundry and dyeing industry characterized by automation, mechanization, chain stores, group enterprises, and diversified operations, which occupy a certain proportion and are growing rapidly.

1. Overview of the National Laundry and Dyeing Industry

Since the reform and opening up, China's laundry and dyeing industry has been one of the rapidly developing industries. In 1979, there were only 3,000 laundry outlets nationwide, with fewer than 30,000 employees. After preliminary development in the 1980s, especially rapid development in the 1990s, it has gradually moved towards a rational and mature development stage since the beginning of this century. According to incomplete statistics in 2003, there were about 600,000 laundry enterprises (stores), laundry workshops in hotels, hospitals, and group units nationwide, with about 2 million employees and an annual turnover of about 40 billion RMB.

Among them, about 16,000 units belong to the state-owned economic form (including state-owned enterprises under restructuring), accounting for 8% of the total number of laundry enterprises. These are mainly laundry rooms (workshops) attached to hotels, schools, hospitals, and other units, occupying 20% of the market share; about 24,000 units belong to joint-stock collective economy, accounting for 12% of the total laundry enterprises, mainly large professional laundry companies with investments over one million yuan, occupying 45% of the market share; the rest are small and medium-sized laundry enterprises and a considerable number of family workshop-style laundries, accounting for 80% of the total laundry enterprises and about 35% of the market share.

The rapid development of the laundry and dyeing industry has promoted related enterprises such as washing equipment and detergent manufacturers to enter a fast development track. In 1999, the sales volume of dry cleaning machines reached more than 20,000 units (sets), and there were about 600 washing equipment manufacturers. Currently, in the market, tetrachloroethylene dry cleaning machines account for about 85% of dry cleaning equipment, with sales of fully enclosed and secondary recovery models showing an upward trend, while open-type machines are relatively declining; petroleum solvent dry cleaning machines account for about 15%, mostly open-type; a very small number use other solvent dry cleaning equipment.

2. Business Types and Current Situation of the Laundry and Dyeing Industry

From the perspective of business management models of laundry enterprises, they can be divided into five types:

(1) Laundry enterprises operating in chain or franchise mode

These enterprises take brand creation as their development strategy, implement chain and franchise operations with unified management models and image logos, relatively complete washing equipment and computer network service systems. Relying on advantages such as large quantity, reasonable prices, and relatively standardized services, they either collect laundry at multiple dispersed points and wash centrally in factories, or operate with front shops and back factories in a decentralized manner. The main service content is customer clothing washing. Annual turnover reaches 10 billion RMB, accounting for about 25% of the national laundry industry's annual turnover, and they dominate laundry services in urban communities.

Since the 1990s, some enterprises have introduced foreign laundry brands or management models, bringing advanced business concepts, technology, and management to China's laundry industry. The franchise business model has emerged in the laundry industry, sparking a franchise chain boom. Various branded laundries have flourished, enabling rapid development of China's laundry industry in a short period, and many new laundry brands have become well known to the public.

(2) Water washing factories mainly washing linens

These include laundry factories (workshops) set up within various social groups such as hotels, hospitals, and schools, as well as large professional laundry factories. Laundry factories within social groups originally mainly undertook internal washing tasks. With unit restructuring and reforms in socializing some unit logistics services, many laundries have started to undertake washing services for society to improve economic efficiency; large professional laundry factories are mainly private joint-stock enterprises developed in the past decade or so, with strong production capacity and large scale. Annual turnover reaches about 20 billion RMB, accounting for about 50% of the national laundry industry's annual turnover.

Their production capacity is strong, and market competition is fierce. Many enterprises have experienced "insufficient workload". With equipment upgrades, enterprise integration, and especially the application of laundry production lines like "Laundry Dragon", large modern water washing factories have begun to take shape in China.

(3) Relatively independent small-scale single stores

These enterprises are basically individually operated, with relatively complete equipment, providing convenient services at relatively low prices, occupying an important position in urban community laundry services. Some enterprises also engage in multiple business projects such as clothing and shoe repair and flower sales. Preliminary estimates show annual turnover of about 9 billion RMB, accounting for about 23% of the national laundry industry's annual turnover.

However, there are many problems with these enterprises currently. A large part of them are family workshop-style laundries, basically without scale, with irregular services, low technical levels, and washing quality difficult to guarantee. They mainly rely on low costs and ultra-low prices to maintain operations. Most of their employees are laid-off, unemployed, or middle-aged and older workers. Although these enterprises are numerous, their survival space in market competition will become increasingly difficult, urgently needing regulation and support.

There are also some "black shops" without business licenses that open one day and close the next. They disrupt the competitive order of the laundry industry, harm consumer interests and the overall image of the industry, seriously affecting the healthy development of the laundry industry.

(4) Professional laundry factories (workshops)

This type of laundry factory is relatively independent from socialized laundry services, with a relatively single business target, aimed at meeting the requirements of special working environments or industries, and generally not primarily for profit, such as Guangzhou Post. The turnover may be around 1 billion yuan, accounting for about 2-3% of the national laundry industry's annual turnover. Self-service laundromats.

(5) Self-service laundromats

Generally, they use automatic coin-operated laundry equipment and operate without staff supervision. This model is more common in developed countries. Currently, in China, self-service laundromats are limited to universities in relatively developed cities and some high-end apartment areas. Due to China's low labor costs, less developed economy, and some social personnel with lower quality, self-service laundromats will not develop rapidly in the next few years. The number of such laundromats is very small, and their turnover accounts for almost negligible proportion of the national laundry industry's annual turnover. However, as a form of laundry business, it will still develop.

Some enterprises have tried placing automatic coin-operated washing machines in ordinary stores for customers to operate by themselves, but due to unsatisfactory results, they withdrew.

3. Some analyses on the current situation of the laundry industry

(1) Laundry services oriented towards community residents are booming

In the 1960s and 1970s, laundromats were mainly located in bustling commercial areas, such as Wangfujing and Xidan in Beijing, Huaihai Road and Nanjing Road in Shanghai. The main service targets were foreign guests and middle to high-level cadres. With the improvement of urban residents' living standards, laundromats have sprung up like mushrooms in urban communities, especially in the late 1990s, reaching a peak development period with an annual increase of 20,000 stores. From 2000 to 2003, the growth rate declined to 19,000, 17,000, 15,000, and 13,000 stores respectively. Currently, the main consumer group for community laundry is still concentrated in middle and high-income families, whose laundry consumption accounts for about 3-7% of household living expenses.

Enterprises have great development space in community laundry services, which remains a main direction for the development of China's laundry industry. Community laundromats will continue to increase, with convenient service forms and diversified operations, providing quality and reputation for residents' laundry consumption. This will be a common point for community laundry shops seeking survival and development.

The customer base of community laundromats is relatively fixed, so the primary business strategy is to improve service quality. Secondly, by promoting concepts such as hygiene, health, environmental protection, and improving quality of life, increasing consumption frequency to drive turnover growth.

(2) The overall industry level has improved rapidly, with a batch of new laundry brands emerging

After nearly 20 years of rapid development, China's laundry industry has significantly improved overall. A number of large-scale, well-managed, well-equipped, and high-quality service laundry companies and large laundromats have emerged, forming new well-known national or local brands. They have even surpassed the original state-owned old brands to some extent, becoming leading enterprises in the laundry industry. Some new brand stores have also received praise from foreign peers. For example, Rongchang·Yiersa and Funait, headquartered in Beijing, started their business in the early 1990s and are now well-known brands in China's laundry industry.

(3) The development of old brand enterprises is mixed with gains and losses

During the planned economy period, state-owned old brand laundry enterprises, such as the well-known Shanghai Zhengzhang, Beijing Plande, Tianjin Chenlin, and Shenyang Laojiuhua, were the backbone of China's laundry industry. "Plande" and "Zhengzhang" were even the pride of China's laundry industry. Since the reform and opening up, these old enterprises have faced many difficulties and challenges in the new economic environment and embarked on a difficult path of second entrepreneurship. After more than a decade of reform and development, they have leveraged advantages in factory areas, equipment, technology, and brands to basically find a development path suitable for themselves, with some enterprises growing stronger. These old brand laundry enterprises are actively exploring development paths by leveraging their original brand advantages, seeking to regain their former glory. However, due to historical reasons, some old brand enterprises need comprehensive restructuring to truly get out of difficulties and adapt to the market economy requirements.

(4) The degree of modernization has significantly improved

Looking at professional laundromats nationwide, they have shifted from manual operations and family workshop-style management to modern, mechanized, and automated service operations. They have basically achieved mechanized and automated washing, steaming and ironing with electricity. Commonly used equipment includes dry cleaning machines, ironing machines, dryers, flat irons, suction ironing tables, steam generators, ironing folding machines, stain removers, etc.; some enterprises have started using fully enclosed dry and wet cleaning machines, human-shaped machines, universal clamp machines, ozone ultraviolet sterilizers, modern packaging machines, garment conveyor lines, computer cash registers, and automatic storage and retrieval systems.

The mechanization and automation level of large-scale wet cleaning plants (workshops) has also significantly improved. Especially the tunnel-type (commonly known as "laundry dragon") with large washing capacity, high automation, energy and water saving, has been put into production in some large wet cleaning enterprises in China, further promoting the modernization level of large laundry plants. Currently, multiple sets of tunnel-type washing machines have been put into production nationwide, and some enterprises are planning to introduce laundry dragons. In this aspect, China still has a large gap compared to developed countries. For example, Japan currently operates about 800 laundry dragons nationwide.

Isolated and enclosed laundry equipment has also been applied in some hospital laundry and special laundry units.

Under the national emphasis on environmental protection awareness, laundry industry managers' environmental awareness has significantly increased. Environmental protection and the treatment of three types of fees are given important consideration in investment decisions. Fifth-generation environmentally friendly washing machines with full enclosure, secondary filtration, and secondary recycling are continuously introduced, along with the promotion of the slogan "ecological washing, healthy and environmentally friendly."

(5) The quality of practitioners is gradually improving

With continuous progress in laundry equipment and technology and the continuous development of fabric materials, the professional quality requirements for laundry practitioners are getting higher and higher. The outdated view that laundry work "does not require much education and anyone can do it" is now obsolete. Many enterprises have realized the importance of job training. Most enterprises regard educational level as a basic recruitment condition. Many have established training centers with clear plans and standards for new employee training, and internal certification for job positions.

In the past decade, the cultural quality of management personnel in the laundry and dyeing industry has significantly improved. More and more highly educated professionals have entered the industry, gradually changing the personnel structure of China's laundry and dyeing sector. Some well-known domestic laundry and dyeing enterprises were founded and operated by highly educated "Confucian businessmen."

(6) The laundry industry association has emerged.

Since Shanghai took the lead in establishing the laundry and dyeing industry association in 1988, there are now 35 local laundry and dyeing industry associations nationwide, with some others still being organized. These associations cooperate with relevant government departments to formulate effective industry regulations, conduct industry training, and have played a very positive role in improving the overall level of the laundry and dyeing industry and promoting its healthy and rapid development.

Since its preparation in 2001 and official approval in 2004, the Laundry Professional Committee of the China General Chamber of Commerce has established contacts with more than 200 laundry associations and related enterprises and units across the country, making significant contributions to promoting the healthy development of the national laundry and dyeing industry:

1. In 2002, the China General Chamber of Commerce cooperated with the Ministry of Labor to revise the national occupational standard for "Laundry Worker." The new national occupational standard is divided into five technical levels: junior (level 5), intermediate (level 4), senior laundry worker (level 3), technician (level 2), and senior technician (level 1). At the same time, it cooperated with the Ministry of Labor and Social Security to organize the compilation of the "National Occupational Qualification Training Textbook for Laundry Workers"; compiled the "Auxiliary Training Textbook for National Occupational Qualification of Laundry Workers"; and this year, according to the Ministry's requirements, organized the compilation of the "National Occupational Qualification Examination Question Bank for Laundry Workers," which is now basically completed.

2. Since 2000, the first China Laundry and Dyeing Industry Exhibition was held, and five successful exhibitions have been held so far. The sixth China Laundry and Dyeing Industry Exhibition will be held from August 4 to 6 this year at the National Agricultural Exhibition Center in Beijing.

3. The first and second National Laundry and Dyeing Industry Vocational Skills Competitions were held in 2002 and 2003 respectively, and the third National Vocational Skills Competition is currently being prepared.

4. Advocating "technological washing and green washing" nationwide in the laundry industry, and carrying out the activity of competing for the "Top Ten Laundry Enterprises." Currently, 39 enterprises nationwide have been awarded the title of "Top Ten Laundry Enterprises" by the China General Chamber of Commerce and the former State Domestic Trade Administration.

5. Organizing training for "Laundry Worker" technicians and senior technicians. Since the advanced class training for laundry workers began in the second half of last year, 200 people have obtained the "National Occupational Qualification Certificate for Laundry Workers" issued by the Ministry of Labor and Social Security through training organized by the Laundry Professional Committee; cooperating with the National Vocational Skills Appraisal Center to carry out "Laundry Worker Trainer" training, 30 people have obtained the "Laundry Worker Trainer Certificate" issued by the National Vocational Skills Appraisal Guidance Center.

In summary, the development speed of China's laundry and dyeing industry is currently fast and the mainstream trend is positive. Especially after nearly 20 years of development, it has gradually entered a healthy and stable development stage, with a group of outstanding laundry enterprise managers maturing. China is still a potential major consumer country for laundry services. With the continuous improvement of people's living standards, the demand for laundry will continue to rise for a long time in the future, and the development space for the laundry and dyeing industry is huge.

4. Prominent Existing Problems

(1) Lagging industry standards and management norms

Due to incomplete policies, regulations, and standards, there is no clear entry threshold for laundry markets, resulting in uncoordinated and non-standard operations across the industry. Although some local standards and normative documents have been issued nationwide, technical performance indicators are not unified, clear, or even scientifically reasonable, affecting their operability.

National or industry standards for the laundry and dyeing industry are still in the initial stage, while local standards are recommended and not mandatory, so enterprises do not implement them and cannot be constrained. The standards vary greatly across regions; the labor and social security departments have not included laundry industry occupations in the technical occupation scope, do not require mandatory certification for employment, and have no constraints on practitioners' technical levels. Complaint handling and compensation methods issued locally are mostly formulated by laundry associations; although some have consulted consumer associations or relevant government departments, they are not government regulations and lack social recognition and legal validity. Environmental protection departments have no targeted standards for laundry industry environmental requirements, and enforcement does not align with the industry's particularities, which also affects the industry's development.

(2) Inadequate management by local government departments and insufficient role of industry associations

Since the laundry industry is a small sector within the commercial service industry, some government departments do not pay enough attention, some are too busy to care, let alone manage. Some management departments consider the laundry industry to have low technical content and low entry barriers, seeing it as a good means to solve employment, so supervision is relatively lax.

Industry associations in various regions are weak, lack financial resources, have little influence among industry enterprises, and cannot carry out activities effectively. Coupled with insufficient support from government departments, their functions and roles are difficult to play, and there are certain difficulties in service, coordination, and management. Therefore, although some places have established associations, they are almost empty shells.

(3) Outdated enterprise equipment and irregular management

Currently, except for several economically developed large and medium-sized cities, 90% of enterprises use open-type perchloroethylene and petroleum dry cleaning machines, which pollute the environment and harm the health of practitioners. Other solvent dry cleaning machines, such as carbon bromide, liquid carbon dioxide, and fully enclosed fluorine dry cleaning machines, are also very few. Except for a few large enterprises, most laundry shops (including franchised chain stores) have varying degrees of incomplete water washing, dry cleaning, drying, ironing, disinfection, and auxiliary mechanical equipment.

From the perspective of business management level: only 5% have sound systems, standardized management, and good service quality; those truly meeting international ISO9000 quality system and product certification are extremely rare. Most managers of small and medium-sized enterprises only have practical laundry business experience, lack modern management knowledge and experience, rely on some practical experience to implement paternalistic management without rules, which is far from modern management and total quality management.

(4) Low cultural and technical quality of practitioners

In the national laundry and dyeing industry, more than 80% of frontline workers only have junior high school or elementary school education, making it difficult to improve their technical skills. About 5% of employees in enterprises hold laundry technician certificates, among which technicians and senior technicians account for less than 10%. The vast majority of employees in small and medium-sized enterprises learn their skills through the master-apprentice system, only mastering simple operations to start work. Most enterprises have thin profits and low wages, with high employee turnover, and enterprises are unwilling to invest more in employee training, which is an important factor leading to low technical quality of employees.

(5) Lack of testing institutions, frequent laundry disputes

Currently, China does not have a relatively independent and authoritative laundry quality testing institution. Although some localities or enterprises have established testing stations, the equipment is rudimentary and testing methods are limited; some even rely solely on the visual inspection of experienced masters, whose reliability and persuasiveness are often questioned. There is no unified standard for accident appraisal, and the criteria are difficult to grasp.

In the first half of this year, laundry complaints nationwide ranked third. The reasons are: first, to a large extent, service is inadequate, laundry quality is poor, and technical strength is insufficient, leading to laundry accidents. Second, the clothing market is irregular, with counterfeit brands and inferior services flooding the market, causing many problems for laundry service enterprises. For example, clothing color fastness does not meet standards; main and auxiliary decorative materials cannot use the same washing standards, causing fading, color transfer, deformation during washing; clothing washing labels are confusing or incorrect, leading inexperienced workers to make errors during sorting before washing; counterfeit brand inferior clothing entering the correct washing process also causes deformation and damage. Third, misleading publicity and consumers' lack of understanding of laundry processes lead to misconceptions about laundry consumption, such as believing petroleum-based washing is environmentally friendly, tetrachloroethylene washing is toxic, all stains can be removed, dry cleaning is higher grade than water washing, and washing causes no wear. This results in consumers having overly high or even harsh expectations of laundry results. Fourth, some unscrupulous individuals intentionally create laundry accidents and maliciously claim compensation by passing off inferior goods as genuine.

Taking a large laundry enterprise with relatively good quality and service management as an example, the average annual compensation paid to customers reaches over 100 million yuan, accounting for 1-2% of the enterprise's total revenue. In contrast, similar enterprises in Japan only account for about 0.2% of total revenue.

Operating laundry and dyeing enterprises is also a high-risk industry. Frequent laundry disputes, high compensation, and difficulties in rights protection make many enterprises unable to bear the burden and forced to withdraw.

(6) Malicious price competition and low service quality

The laundry and dyeing industry is a low-profit industry, and low-price competition further causes some professional laundry companies (shops) to have no profit or only thin profits. Some small shops operate with low cost, low quality, and low prices, engaging in vicious market competition, impacting higher-end brand stores. A few years ago, some regions even saw "one-yuan shops." Some enterprises, to hold their ground, have not dared to raise laundry prices for more than ten years (even lowering them), while rent, utilities, personnel expenses, and management costs have increased, along with the use of advanced equipment and chemicals and auxiliary materials, greatly increasing costs and shrinking profit margins. Operating at a loss makes it difficult to invest further in staff training and equipment upgrades, creating a vicious cycle that restricts service quality improvement.

The existence of these problems is due to multiple factors, but overall it is still caused by insufficient economic development and the overall level of the laundry and dyeing industry.

V. Some suggestions on the development of the laundry and dyeing industry

Based on the current situation and trends of laundry and dyeing development in China, and drawing on the experience of developed countries to promote the healthy and rapid development of China's laundry and dyeing industry, it is recommended to focus on the goals of "technological innovation, brand creation, and environment optimization" and determine the following key tasks.

(1) Accelerate the formulation and implementation of standards, optimize the development environment

On one hand, accelerate the formulation (revision) of various national and industry standards and norms, while promoting the implementation and publicity of already implemented standards, purify the national laundry and dyeing market, strive to create a scientific, standardized, and orderly market environment, avoid vicious competition within the industry, and protect the overall interests of the industry. Refer to international practices and policies of developed countries on the laundry industry, and gradually formulate and improve industry and national standards for the laundry and dyeing industry according to China's characteristics, gradually implementing an access mechanism in the laundry and dyeing industry.

Policy and standard formulation should be coordinated with relevant departments, such as consumer associations, environmental protection, traffic management, and urban management departments.

(2) Establish brand strategy and cultivate industry famous brands

After the hard work of many laundry workers, some well-known industry brands have been created in China's laundry and dyeing industry. However, overall, they are not strong enough; objectively speaking, some brands rely heavily on hype and lack solid internal strength. China is a potential major laundry consumer country; without famous brands driving the whole industry, it is difficult to face international competition. Policies should support and assist some time-honored and leading enterprises to play a core and leading role, driving the development of the entire industry.

(3) Establish laundry quality testing institutions

The national industry authorities should take the lead, coordinate relevant departments, raise funds through multiple channels, and entrust associations to establish laundry quality appraisal centers, so that laundry quality recognition has a fair and authoritative institution, reducing service quality disputes, protecting consumer rights, and also protecting the interests of laundry and dyeing enterprises.

(4) Fully utilize the role of industry associations.

China Commercial Federation Laundry and Dyeing Professional Committee
May 12, 2005