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Acknowledgement
I express my sincere gratitude to Mr Somnath Kedia (Business Head, Commercial Washing
System) for selecting me and giving an opportunity to work for IFB Industries, Mr Ranjan
Mathur (Head, Delhi office) for allowing me to work in the Delhi office and Mr Sanjeev
Kumar ( Business Manager, Commercial Division), my mentor, for his guidance and
cooperation throughout the completion of this project work.
I would like to thank Ms Avni Joshi (Marketing head, Domestic Division) Mr Nishant and
team for the orientation program.
Last but not the least; I would like to thank the whole team of IFB, Delhi office, for their
warm gestures.
I would like to express my sincere thanks to all the existing customers, new investors and the
end users who spared their time and answered my queries during the market research phase. I
also like to express sincere thanks to Mr Anshul Gupta (VP, Quick Clean) for giving his
invaluable insights about the business that helped me to make this project more enriching
with ideas.
I also express my deep gratitude to all the faculties of IIM, Rohtak for their teaching sessions
in the first year which helped me in completion of this project.
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Declaration
I hereby declare that the project titled “Scope of Laundromat Business in
Delhi-NCR” is an original study done by me during the internship at IFB
industries, with tenure of two months. It is an original product and no part of
this study is taken from any other project of other institution. The references are
duly mentioned at the end of this project report as well.
Date:
Prajnya Priyadarshini
PGDM student
IIM, Rohtak
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INDEX
Topics
1. Executive Summary
2. Company Overview
3. Laundry Products Overview
4. Primary Study
✓ Introduction to Study
✓ Objectives of The study
✓ Research Methodology
✓ Source of Data
✓ Data Collection Method
5. Data Analysis and Interpretation
✓ Introduction
✓ Reasons for Existence of Laundromats
✓ Keys to success
6. Market Research (Findings )
✓ Market Summary (Insights)
✓ Customer Summary
✓ Expectations of Existing customers
✓ New Investors Analysis
7. SWOT analysis of IFB
8. Competitors analysis
9. Secondary Research
✓ Growth of Urbanization in India
10. Financial Plan
✓ Estimated Funds Required
✓ Projected Profit and Loss Statement
✓ Estimated Pay back period
✓ Break even Analysis
✓ Source of Fund
11. Limitations of the Study
12. Conclusion/Suggestions
13. References
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Executive Summary
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Company Overview
IFB Industries Limited (IFBIL) is India’s leading home appliances and fine blanks producer.
The company was originally known as Indian Fine Blanks Ltd. It started operations in 1974
in collaboration with Hienrich Schmid AG of Switzerland. Today, the company manufactures
fine blank components such as straighteners, decoilers and strip loaders as well as other
engineering components, and home appliances such as washing machines, dishwashers,
microwaves, hobs, chimneys and other cooking appliances. Its manufacturing plants are
located at Kolkata and Gangarampur (West Bengal), Selcete and Ilhas (Goa), Bhopal
(Madhya Pradesh) and Bangalore. Its registered and corporate office is located at Kolkata.
Vision
KEY HIGHLIGHTS
● Established player in home appliances segment: IFBIL has an established market
position in the home appliance segment. The company manufactures home and
kitchen appliances such as washing machines, washer dryer, laundry dryer,
dishwasher, microwave oven, hobs, chimneys and other cooking appliances. In FY10,
the home appliances segment contributed ~82% of revenues. The company also
manufactures engineering products like fine blanked components, cushion plate for
seat recliners, K12 tongue for seat belt assembly, door latches etc. Clients for its
engineering products include Maruti Suzuki, Ford India, Fiat India, Toyota Kirloskar
Motors, etc. In FY10, fine blanks and engineering operations contributed 18% to total
revenue in FY10.
● Strengthening its reach in tier 2 and tier 3 towns: IFBIL is strengthening its
distribution network in tier 2 and tier 3 towns and focusing on marketing programmes
for semi-urban and rural markets. The company has a 24-hour tele-helpline service for
queries. It delivers to over 1,600 locations in India
Board of Directors Designation
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Bijon Nag (Mr.) Executive Chairman
Somen Bal (Mr Director
Radharaman Bhattacharya (Mr.) Non-Executive Director
Rathindra Nath Mitra (Dr) Director
R. Murli dhar (Mr.) Director
Bikramjit Nag (Dr.) Jt.Executive Chairman & Managing
Director
K.M. Unnikrishnan (Mr.) Non-Executive Director
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Top Loading Washing Machine: IFB top loading washing machines are a combination of
ease-of-use, flexibility, convenience, advanced technology and great design and more.
Dryer: With IFB 100% clothes dryers, 2 hours is all you need to get fresh, hygienic,
odour-free clothes every season.
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Primary Study
Introduction to the study:
This project is primarily based on the study of the scope of Laundromat Business in
Delhi-NCR region. It includes the reasons for the existence of this business and the potential
opportunities associated with it.
IFB is India’s largest selling washing machine company in the premium segment. It has got a
market share of 80% in the top loading washing machine in the domestic appliances division.
Along with this the laundry range which includes the commercial washer and dryer plays a
vital role in the Laundromat business of Delhi-NCR region. There are various factors which
decide the supplier of the industrial appliances for a Laundromat. This study basically aims to
find those factors and analyse it.
Along with the growing urbanization of the country, laundry business is also prospering. This
project also includes the competitor analysis of other major players like White tiger, Speed
Queen and Quick Clean.
Research Methodology:
Research Design:
● Primary Research
● Secondary Research
Sources of Data:
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● Questionnaires
● Personal Interaction
Laundry is considered as a profitable business now days when the income of people is
increasing and at the same time they have got less time for such day to day needs. Increasing
Urban life style and the paucity of time, led to the start of Laundromats in Delhi. The concept
of Laundromat has been easily adopted by the youngsters, students, single earning
professionals etc.
It gives a clean and friendly ambience to its customers who enjoy visiting a Laundromat and
get their clothes washed and dry. A Laundromat provides many convenience at their outlets
such as pick & drop facility, access to free wi fi, TV, magazines etc. Some outlets in Delhi
also provide flavoured Hukka to attract customers.
If you have an investment capacity of 10-15 lakh and above and a commercial area of
minimum 400-700 sq feet, the business of self-service laundry is worth considering. The
concept of self-service laundry originated in the West but is slowly catching up in India. In
many European countries and in the US there are community washing machines (also called
Laundromats or washaterias) for people on pay-and-use basis.. This idea was adapted from
US. The first Laundromat was opened at Satya Niketan, New Delhi by Mr Anshul Gupta, with
IFB appliances.
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● Time crunch: The hectic urban lifestyle along with 7-8 hours’ of working shifts of
people makes it difficult for them to divert ample amount of time for domestic
purposes. Laundry is one of the most required services in our day to day lives. So the
time crunch plays a major role in the existence of this Laundromat. Double income
nuclear families prefer this convenient option for doing their laundry. The pick &
drop service offered by the outlets attracts them more for availing this service.
● Willing to spend: The young professionals and other users of Laundromats are
willing to spend for such services rather than owning a washing machine at home or
employing a domestic help for doing all these chores. They are ready to pay in return
for a clean and good quality of laundry service.
Keys to Success: There are many factors for the success of a Laundromat Business. The
outlet should be strategically placed to gain maximum footfalls and revenues. Some of the
factors are as follows:
● Convenience: There must be good offerings at an outlet like services ranging from
full-service washing and drying to optional folding, and extended business hours for
late night working executives. Along with this extra facility like wi fi, TV, coffee
vending machine, light snacks etc also keeps the customers occupied at a store.
Laundry should not be a boring job for both the customers and the workers as well.
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● Environment: It is very much important to provide an environment conducive to
giving clean, friendly, and professional service to the customers. Professional service
is the base of every business and hygiene is a major factor in Laundry business. So the
environment must be good enough to attract the customers.
● Reputation: Good reputation of the business always plays an important role. Long
term reputation of the outlet with the customers creates loyalty and makes them to
visit the store again and again. Relationship building is required for the success of the
business in the long run.
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Market research
Some of the insights about the Laundromat business in Delhi-NCR region are as
follows.
● First Laundromat: The first Laundromat was started in the year 2011at Satya
Niketan by Mr Anshul Gupta, US returned Chartered Accountant, with the help of
IFB appliances. He adapted the western concept and tried to start a business in
India also. And now he is the owners of Quick clean Laundry business who
provides franchisee for opening Laundromats.
● Target Customers: The target customers of any outlet mainly comprised of young
executives, college students, young double income couple and foreigners (pie
chart)
● Maximum Load: According to this study, an outlet generally gets more load
during the weekend as compared to weekdays.
● Seasonal Factor: The damp and wet season plays a major role in this business as
well. Winter and rainy season are the peak times of business for any Laundromat
due to the requirement of dryers. People turn up at the Laundromats to get a clean,
odorless, refreshing wash of their clothes.
● Market Growth: People in Delhi- NCR are more readily adopting the western life
style. With the growth of the urbanization in India, the use of Laundromats also
increases. The trend is related to the life style and needs of the people. In the past
3 years, Delhi has got more than 15 Laundromats. The rate of growth is really
overwhelming.
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The customers at an outlet comprised of students, single professionals, young couple,
family and foreigners. 40 % of the customers are single working executives those who
are staying in rented flats or as paying guests. Students of MDI, Gurgaon, DU North
and South Campus, etc makes up for 25% of the customers. Foreigners residing in
New Delhi are very much aware about this concept much before. SO they find it very
easy to use and convenient option to do their laundry. Young double income couple
and family are newly availing this service, so they form only 10% of the target
customer base.
Results and Findings
Expectations of Existing Customers of IFB:
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Findings:
● A mixed response was generated from them regarding the professionalism and
customer service of IFB
● The customers feel that the 12% p.a. maintenance cost of IFB machineries is quite
high
● Some of the expectations of the customers are not fulfilled like branding of the
outlet
● New customers are not aware about the functioning of the machines and the
operational efficiency also.
● The factors for choosing IFB are trade fair, word of mouth and the brand name
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New Investors Analysis:
Number of New investors visited : 14
Businessmen- Dry cleaner Owners, Home décor Business Owner etc
IT professionals
Laundromat owners
Findings:
● They consider after sale service of equipments as a prime factor for choosing a
supplier
● A good professional relationship with the company is required for long term
business
● Extra Warranty period and low maintenance cost is favored
● Some businessmen are interested in basic equipments also in spite of commercial
washers for their Laundromats
● Availability of spare parts also plays a major role
● Good looks of the washers are also considered as a factor for deciding the supplier
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SWOT analysis of IFB
Strengths:
● IFB has got a brand name to rely upon. It plays the role of market leader in the
premium segment mainly in Top loading washing machine. It is one of its strength
which can be used in the commercial laundry segment as well.
● The robust Laundry range of IFB is another advantage of IFB. Because commercial
appliances need robustness for maximum utilization
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● Primus is one of the leading brands in manufacturing commercial washers. Supplier
of International technology washers is a strength of IFB
Weakness:
● The greatest drawback of IFB appliances is the after sale service. Customers are not
satisfied with the service given to them. It is a matter of great concern and should be
rectified soon.
Opportunity:
● The Laundromat Business is growing rapidly. Within two years the number of
Laundromats have increased manifold and is expected to grow also. So it is a
booming opportunity for IFB to project its commercial Laundry range and capture the
market.
● There is a large target customer which needs to be addressed. This business can be
projected all over India where there is a paucity of time but availability of income to
suffice the use of Laundromats in daily lives.
● Urban life style of the people changes the market trend. Their need is changing and
they are adopting new ideas and concepts quickly. So it creates an opportunity for
creation of revenue here.
Threat:
● Competitors like Quick clean who provides organized franchisee of Laundromats and
Speed queen etc plays the threat here. Quick clean has managed to get 25 odd number
of franchisee outlets in Delhi-NCR region.
● Increased use of domestic appliances and reliance on domestic help for washing of
clothes also a major reason of threat to the business. It might again change the trend.
Competitor Analysis
Quick Clean:
Established in 2010, Quick Clean Private Ltd is the 1st company to introduce the concept of
Laundromats, self-service laundry, in India. With chain of Laundromats across India, Quick
Clean is already making waves and providing a hygienic, clean and economical laundry
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solution to people in several parts of the country. Quick Clean is also Electrolux Professional
Laundry Systems Distributor for Indian region and provides the complete solution for setting
up a Laundromat. Electrolux Professional is the world-wide leader in developing long-lasting
energy and water efficient products. It has been successfully managing and servicing
community laundry facilities in residential complexes, colleges, universities, and other
multi-housing facilities.
• Neat and clean outlets and furnished by the quick clean company.
• Card operated machines although customers prefer their clothes to be washed by the
staffs
• Quick clean owners are satisfied with the after sale service and brand name
• Quick Clean is in talks with a few PE funds players and, once the business scales up,
may even go public. They are focused presently in scaling up.
Speed Queen:
Made in America and refined for more than a century, Speed Queen is renowned for the
consistently powerful performance of our machine
When you purchase a Speed Queen machine, you're investing in a global network that offers
comprehensive service and support. The most distinguishing feature of Speed queen is that
they are providing financial services to their customers that includes competitive rates,
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account management, personalized services etc. They provide full financial support in the
form of loan.
● Currently they have got two outlets in Delhi
● It gives a classy ambience to their customers
● The detailed financial analysis of investing in a Laundromat is an attractive feature
though
● The Laundromats are named as Le Proteak
Secondary Research
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Growth of Urbanization in India:
Urbanization plays a major role in setting up any new business. Especially when the concept
is adopted from the west, it is directly related to the urban life style of the people in India.
The fast growing development of metro cities and the people moving from rural India to
urban India is a major aspect which cannot be neglected.
With the growth of urbanization in India the market trend also changes from local washer
man to Laundromats. There is a great opportunity that this business will prosper in the future,
not only in Delhi, but also in other cities like Mumbai, Banglore etc.
Urbanization will spread out in India, impacting almost every state. For the first time in
India’s history the nation will have five large states. Urbanization will be accompanied by
three to seven fold increases in total GDP and a four to eight fold increase in urban GDP in
every state.
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Financial Plan
The seed capital to start this business varies depending upon the rent of the commercial
space, location and infrastructure inside the Laundromat. The rent of a 400-sq feet shop in
up-market areas like Delhi’s Malviya Nagar, for instance, would be much higher than that in
areas like Laxmi nagr, East Delhi. However, the nature of Laundromat business is such that
you would find it easier to get customers in up-market and posh areas than in lower income
localities. Therefore, it makes sense to set up this business in an up-market area of any city
In this business, it is expected that the revenue is 30% more in the winter due to more
machine-drying and less hang-drying. Conversely, it's also expected that revenue is 30% less
in the summer due to hang-drying in the sunlight.
Let us consider a Laundromat with 4 IFB appliances- 2 washers and 2 dryers set up at a posh
area like Green Park, South Delhi.
Cost of Appliances of IFB:
Models Quantity Price (Rs) Total Price (Rs)
IFB 12 kg Capacity 1 3,37,000.00 3,37,000.00
washer
IFB 6.5 kg capacity 2 1,97,000.00 3,94,000.00
washer
IFB 8.5 kg capacity 2 1,50,000.00 3,00,000.00
dryer
IFB 13 kg capacity 1 3,11,000.00 3,11,000.00
dryer
Total 13,42,000.00
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Projected Profit and Loss
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Year1 Per Month Per year
Operating expenses
*Note: Variable expenses are subject to change depending upon the use
It is an estimated profit/loss summary for first year only, it is subjected to vary next
year. The actual profit would be less if depreciation is taken into account, still then the
return would not be bad.
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Estimated Pay back Period:
Net cash inflow= Rs.2, 20,320
Net investment= Rs. 15, 00,000
Payback period = (15, 00,000/2, 20,320) = approx 7 years
Break-even Analysis
The break-even analysis shows that a Laundromat requires 383 customers a month. This
was derived by using average revenue of Rs.200 per customer, and fixed costs of
approximately Rs.60, 576 and variable 30,000 (42 per load). Break even revenue per
month Rs.76, 600
Rent= Rs.40,000
Wages= Rs.20,000
42
Variable Cost per unit(30,000/720)
200
Average Cost per hour/machine
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Sources of Funds
A business needs funds to start and carry on its operations. But the main questions is that
where can one get these funds? There are different sources of funds now available for all
kinds of start up business. They are as follows.
● Bank Loan: A business loan is the easily available option. But approaching a bank
with an impressive B plan is not so easy altogether. Secured and unsecured, there are
two kinds of loan available.
Usually banks and finance companies fund up to 80-90 % of the loan-to-value ratio
(borrowed amount divided by the asset value you are purchasing or refinancing),
depending on the credit history of the borrower and the collateral put up, be it
property, machinery or marketable securities. Incidentally, finance companies also
offer collateral-free working capital loans to small enterprises with at least three years
of operations. These are available at interest rates of 16-20 %, while loans against
property cost 12-18 %. But the main drawback is that. Such loans typically go to
existing small businesses which have shown over three years of profitability and
credit history. Here IFB can come into play and assist in getting a loan from a bank.
● Personal Investment: Friends, family and personal savings always comes into play
when someone thinks about a start up. If somebody is having enough personal
investments, then it’s better not to go for any outside liabilities.
● Angel Investors/Venture Capitalists: These are high net worth individuals, who
invest in start up in return for minority share in the business. They invest from the
seed capital itself and monitor the growth and turnover of the business. Venture
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capitalists are patient investors who stick to the business for 5-7 years. If the ideas are
innovative and impressive, they can surely attract the attention of an angel investor.
Suggestions
The following are the suggestions given according to this study.
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● Availability of spare parts of the machineries is an important factor. It should be taken
into consideration as the potential customers rely on this aspect more
● Indian customers unlike European, go by the looks of the machineries also. Electrolux
appliances are preferred by some customers for the blue white appearance also
● Branding should be made available to the customers by charging minimum costs as it
creates publicity for the brand
● Laundry size analysis and operating cost estimate for on premise laundry to create
professional relationship with customers
● Provide the lowest capacity of washer specially to wash white clothes to avoid color
bleeding
● It should not go for franchisee or own exclusive outlets to avoid being its own
competitor
● Target the dry cleaners as well, because some dry cleaners are interested in
Laundromat as well
● Venture into other cities for potential commercial Laundromat opportunities
● Ironing should also be included in the complete laundry range along with washer and
dryer
Conclusion
Laundromat is a profitable and capital intensive business. Urbanization and the change in
market trend led to the growth of Laundromats as well. This concept is seen as a
mushrooming business opportunity if tapped wisely, one can gain the most out of it. Delhi
will witness more number of Laundromats in near future established by different owners
from different strata of society. The point of difference will be in the offerings only.
Laundromats will gradually venture into other cities even. For the convenience of time and
energy saving, people will adopt this trend soon.
Reference
• http://www.nseindia.com/content/corporate/eq_IFBIND_base.pdf
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• http://www.theglobeandmail.com/news/world/india-makes-a-clean-start-with-first-lau
ndromat/article564501/
• http://trak.in/tags/business/2011/01/18/indian-laundromat-delhi-western-culture/
• http://www.mplans.com/laundromat_marketing_plan/financials,_budgets,_and_foreca
sts_fc.php
• http://en.wikipedia.org/wiki/Self-service_laundry
• http://www.ifbappliances.com/laundry/front-loading-washing-machine.html
• http://quickcleanindia.com/companyprofile.aspx
• http://articles.economictimes.indiatimes.com/2012-06-28/news/32457219_1_specialit
y-restaurants-consumer-ipos/3
• file:///C:/Users/omm/Downloads/MGI_Indias_urban_awakening_full_report%20(1).p
df
• http://timesofindia.indiatimes.com/business/india-business/How-to-fund-a-start-up/art
icleshow/11773236.cms
• http://www.deal4loans.com/apply-business-loans.php
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