After a temporary pause to their services in selected areas in Bengaluru, home services provider Housejoy is now operational again across all pincodes in the city, CEO Saran Chatterjee has told YourStory. Despite reports to the contrary, he confirmed that Housejoy has not cut off any area completely, and based on their learning from experiments, they are bringing back their services to all pincodes, and are gradually scaling it up.
“We call ourselves a hyperlocal services company. So we had to figure out how to generate hyperlocal density in demand across categories through high utilisation from service partners in particular zones in the city. That’s how we have been experimenting across all categories,” says Saran.
Housejoy has already broken even across categories in Bengaluru, Delhi, and Mumbai, and in all those concentrated zones, he claimed. Their best city in terms of revenue is Bengaluru, closely followed by Delhi and Mumbai. Laundry is the most high-frequency category in Housejoy’s portfolio. The average size of their orders for laundry services is Rs 400. They are expecting 10 percent revenue to come from the laundry sector.
“We are able to find affinity with other categories. Customers acquired through one category leads to cross-selling to other categories,” says Saran. In home services, customers acquired through the laundry category often go into beauty or other services, and vice versa.
According to Saran, their main focus continues to be on quality of service and customer experience. For quality control, they monitor the jobs and ratings across categories. “If the ratings continue to cross the minimum threshold, we continue to extend this partner. But if it’s below the threshold over a certain number of jobs, then we essentially remove them. We work with some partners closely to see if we can upskill them so that their ratings can continuously improve,” Saran added. Housejoy’s services are all outsourced.
Founded in 2014, Housejoy has raised $27 million from Amazon, Matrix Partners, and Qualcomm Ventures among others. In February 2016, they acquired laundry services startup MyWash and Orobindo Fitness, to increase their reach and build a model that can show aggressive growth. MyWash cofounder Silus Reddy Chintapilly heads the laundry category for Housejoy now.
According to a recent report by KPMG, the organised laundry market in India is estimated to be worth around Rs 5,000 crore, while the unorganised one is estimated to be around Rs 2,00,000 crores. The entire startup ecosystem has been moving from cash-burning to building a solid, sustainable business. Unit economics is gaining prominence– startups are continuously tweaking and optimising the variables associated with it. “Our hyperlocal experiments were able to create clustered demand, and then ensure high supply-demand utilisation,” Saran adds. For expansion, Housejoy is focusing on depth, not width. They are now present in nine cities, and plan to penetrate into those cities before expanding further.
Demand for laundry services is huge, especially in Tier 1 cities thanks to the busy lifestyle, which has led to innovations in on-demand food delivery, transportation, and other home services. But the online laundry sector works on unit economics, and those who cannot figure it out will find it hard to survive. In fact, there have been quite a handful of shutdowns in the last few months. Delhi-based on-demand laundry startup Tooler shut services in February, allegedly due to lack of funds. UrbanClap shut down its laundry service in March 2016 - hardly six months after it was launched. Bengaluru-based Flashdoor shut down in May.
Although Urbandhobi, Doormint, and Wassup have been sustaining themselves, Housejoy arguably has the lead in market share so far. The sheer size of the customer base gives opportunities for multiple players – but logistics and quality of care for the fabrics are the key factors for customer retention, rather than discounts or cash backs.