Clocking Rs 70 lakh in revenue, Dhobilite is set to achieve sustainability in online laundry space
Noida-based Dhobilite is an online SaaS platform that connects customers and vendors for laundry and cleaning services.
It had been a long weekend, and on Monday morning, 31-year-old Suresh could not find anything wearable from a whole pile of shirts. Reason: he had forgotten to get his clothes laundered in time. Indeed, like Suresh, not many have the time to ready a stack of freshly pressed clothes to kickstart the new week, as they lead busy lives.
And while there are several platforms, like Wassup and LaundryAnna, that are growing fast, industry experts opine that the problem is yet to be solved, as the massive dhobi market is still largely unorganised.
The estimated size of the laundry market is Rs 2,20,000 crore, with the unorganised market—includes dhobis, maid servants, and mom-and-pop stores — valued at Rs 5,000 crore. A report by Euromonitor International states that the highly fragmented sector holds 7,67,000 establishments, 98 percent of which are micro-sized laundries with fewer than 10 workers.
The beginnings
Though Nishant Tripathi and Abhishek both studied at IIT BHU, they happened to meet only in 2011 at a wedding. Soon the duo got talking about the various pain points in the service industry. Nishant says,
“Previously, I had had some bad experiences with the services of some companies, so I felt that while a lot of stress is put on giving ‘user experience’ on their website's or app's front end, but they never care for the actual user experience, which is the core service in the real world.”
The state of affairs prompted the 32-year-old to soon get into the service sector. He felt that the biggest market in the laundry segment required some major organising. So he joined hands with 34-year-old Abhishek and started Dhobilite, a software-as-a-service (SaaS) platform focused on providing end-to-end cleaning services for customers and vendors. While Nishant acknowledges the fact that not many startups, including Doormint, have tasted success in the segment, he believes that a hybrid model is the best way to work in India.
“Online has a lot scope in terms of reach and offline laundry is doing good business currently. So if these two platforms are brought together then it will be a win-win,” he notes.
Finding the sweet spot
Having witnessed the way large systems work in big organisations from their previous experiences, the duo had a good understanding of the e-commerce business. When they released their mobile app, they saw a two-fold increase in the customer base in just four months. They started with a small laundry setup in Noida in 2011.
After the initial spurt in traction, things slowed down a tad bit as people either did not know about the company or they were not confident enough to trust their clothes with a new company. Also, running the company itself required being flexible to change things up. “During the inception of the company our working model was different but after taking the plunge we realised that there are lot of operational issues in execution that had to be taken care of if we wanted to maintain the level of quality while scaling up our operations,” explains Nishant.
Revenue and business
During the first year of their operations they had three employees, and Dhobilite clocked a revenue of Rs 8 lakh. Bootstrapped, in FY15-16 the revenue was around Rs 35 lakh, with an employee strength of 12. The team claims to have reached breakeven in 2014-15.
“We expect to close the current financial year with a revenue of around Rs 85 lakh. We have already expanded to Gurgaon and will go to Bengaluru soon,” says Nishant.
Dhobilite has two verticals: one consumer facing and the other a solution for vendors. There are two type of models: pay-as-you-use model and the other is subscription-based.
“Vendors have a managed services model for which they will pay for services they have signed on,” says Nishant.
But, in order to ensure success, opting for a sustainable model will work out in favour of laundry companies. Balachandar R, founder, Wassup says,
“Online laundry services have tried to take the same path of discounting and forced customer acquisition through cash burn followed by e-commerce companies. But companies that will sustain are the ones doing justice over the long term for all stakeholders, and have a vision to build sustainable businesses.”
The space and future
Currently, the laundry market is largely dominated by offline players who cater to premium categories. However, the price points set by these companies are not the best fit for a massive consumer base. Startups in the online laundry space are trying to fill the gap by offering comprehensive solutions at an affordable price, while challenging themselves to build sustainable business models.
Nishant claims Dhobilite is creating an ecosystem for laundry services.
“We started with a vision to solve the hassle of doing laundry in a simple and effective manner. In order to be effective we need to provide a great customer experience, and we plan to keep providing it no matter what,” he adds.
The team is looking to raise funds and aiming to increase its revenue growth, improve its customer services ecosystem, and go pan-India by end of FY18-19.