Cleaning out Problems

Successful business ideas spring from common problems and challenges confronted by people. Arunabh Sinha and Gunjan Taneja, founders, UClean, India’s first organized chain of laundry and home cleaning stores, sensed the absence of the laundromat culture in India following a thorough study, and soon created opportunity out of a problem. In 2019, they became the newsmakers when UClean created history by becoming the fastest brand to reach 200 franchises and creating unprecedented employment opportunities. Since then, there has been no looking back for the married-turned-business couple that is leaving their imprints on tier 2, tier 3 and tier 4 cities.

Corporate Citizen: UClean is a rather novel and new concept. What inspired you to bring it to India and how did the first idea come up?

(L-R) Arunabh Sinha and Gunjan Taneja

Arunabh Sinha: Multiple factors contributed to building UClean. This is not my first entrepreneurial venture. I started a company by the name of FranGlobal in 2010, where we would help Indian brands expand internationally and help international brands come to India. So, while I was building FranGlobal, I used to travel a lot to Southeast Asia, in particular, Malaysia, Indonesia, and the Philippines. In these countries, it was hard to not notice the explosion of the laundromat culture. So, in 2010, if you went to a city like Jakarta or Kuala Lumpur, you would realize that it was all about dhobi-culture, very similar to that in India, wherein you have these men or women, who would come on a bicycle to your place, pick up your dirty clothes, deliver them back a few days later. Internationally, they are also referred to as a dhobi. Between 2010 to 2015, however, there was suddenly a revolution of sorts where you had them popping up in every corner of the city, coming up even in the large housing societies. That idea stayed with me.

When I exited FranGlobal in 2015, I became the North India CEO for the hotel chain called Treebo Hotels and it was there I realized that when you look at the plethora of problems that the guests face with budget hotels, laundry is literally the number one problem. So, when you enter, either the bedsheets are dirty, the towels are dirty, or the curtains are dirty. Out of ten complaints, six were related to laundry. This observation was true for both India and other countries, which was beginning to inspire me for a new venture. My wife, Gunjan and I were already discussing it, we had just been married and I thought she’d be the right person to talk about it. But these two factors contributed to the eureka moment or towards the fact that we need to build something to address this problem in India.

Gunjan Taneja: I’m very particular about my clothes, the little nips, and cuts or whatever it is. My mom used to take care of them, but when I got married, I felt lost about what to do with them. My domestic help would wash them, and the colour bleeding or one problem or another with them was getting to me. I always wondered if there was professional cleaning for clothes, which was not dry cleaning. The cost of per piece dry-cleaning used to be very expensive and it continued to be. This discussion between us began to take shape as a business idea as we went to Japan for our honeymoon and then a trip to Indonesia and Malaysia. These trips helped us to do a thorough research about the problem at hand.

As observant travellers, we like to study the new brands coming up in a city and the birth of new cultures in them.

"Laundry is something that women know. Why not make money out of it? This is another success story-we have one of our top stores run by a woman entrepreneur. In fact, all our top stores are run by women."

-Gunjan Taneja

CC: How does UClean function, especially when you say ‘tech-enabled’?

Gunjan: By ‘tech-enabled’, we mean that everything will happen on your phone.

So, you just need to download our app, or even if you don’t want to download the app, you can just open the website, choose your location and you can go ahead pretty much in three simple steps - choose your location, chose your pick-up date and time and you are good to go. You just confirm from your end and someone will come and collect it accordingly.

Another part of technology is what we do at the store itself. A lot of our detergents, solutions, solvents and chemicals that we use are highly researched by our partners and we also make custom solvents and custom solutions for most of our locations. If you look at washing, there are three important aspects of washing. First is, which washing powder or washing solvent or washing chemical you are using. Then, how much time you are washing it for or what’s the wash cycle like-how rigorous or how delicate the cycle is, depends on the load. And the third aspect is the temperature of the water. The water itself is very important because it is the carrier or medium in which we wash. Water quality varies in our country. If you go towards the East, towards Ranchi, for example, there is a lot of mineral density in the water and iron content in the water is very high. Clothes were turning yellow in colour because of the iron content in the water. In other parts of India, such as Gurugram, the water is extremely hard in nature.

These factors inspired a lot of research and development on the chemicals to combat these problems. These challenges are addressed through our detergent. So, our solvent or our detergent has to work through those conditions. That’s another aspect of technology.

machines that we use or the training that we provide to our staff. The machines we use are the best in the world. We source all our machines from Alliance Laundromats, USA. This is one of the largest washing machine manufacturing companies in the world. However, tech-enabled does not mean purely technology- oriented, there is a lot of manual intervention as well.

To sum it up, a tech product is our app and then in terms of the production there is a lot of technology in use, which replaces the manual error and manual labour effort.

CC: How did people accept the idea of the DIY culture when it came to laundry?

Gunjan: DIY was mostly our baby and we felt that these laundromats, made in a way that the machine was right at the starting point of the store, was very inviting. We wanted to lure people to see the wonderful machines for themselves.

Arunabh: It’s very similar to what happens in the US or Europe, where you don’t have assistant laundromats, you can literally go in there yourself, put your clothes inside the washer and the dryer and then you laze around and read a book or do whatever, but it’s you who is responsible for cleaning your own clothes and taking them away. ‘Do It Yourself’ laundromats was inspired from this. Truth be told, that is the reason we called it UClean. We experimented with this idea for a couple of months in Delhi- NCR, which is where we launched our pilot stores. But within two months we realized that India is not cut out for Do-It-Yourself. Even for groceries, you are using a Big Basket or a Blink It or for milk you are using a Country Delight. In a country like India, firstly the manpower is cheap-it is significantly cheaper as compared to other parts of the world. With DIY, we were not able to drive customers. So, that’s when we decided to pivot to a model, where we would be offering you doorstep based pick-up and drop. This started picking up very quickly. So, instead of Do-It-Yourself, it shifted to, ‘We do it for you’.

"We created franchising in a space where franchising never existed. Laundry industry, is as old as the food industry or any other industry. But unfortunately, it is very disorganized, nobody even thought of a laundry franchise. So, that was also a reason, it was a novel concept."

-Arunabh Sinha

CC: What are your biggest partnerships? What are your aspirations in terms of partnerships?

Arunabh- There are many affiliations-we also own the master franchise rights for a company called Chem-Dry, which is the world’s largest surface cleaning company and one of the top ten most franchised brands in the world. So, we have the exclusive development rights for the entire SAARC region with them.

So, the moment you think about cleaning, our vision is that your mind travels to UClean. We also focus a lot on how to maximize the revenue and the profits of our franchise, because we are a franchise model. The entire business is franchise invested, franchise-operated, where our franchises run the show on the ground. We are in fact the first company in India that does co-franchising exercise with FEDEX, where if you are a UClean franchise, you automatically get upgraded to a FEDEX franchise without any additional investment. As a franchisee, you don’t need to rent out any extra space, you don’t have to hire any additional people, they will train the existing UClean staff on how to manage FEDEX operations and they give us a commission on every delivery we handle. Thus, from the same premises, you are able to increase your revenue.

The idea is that we want to get into businesses that help us maximize real estate. Because, in India the biggest killer for any business is real estate; the rentals in India are abnormally high. So, what we want to do is that if a franchise has access to 300 - 350 sq. ft of space, we try to figure out where we can help maximize this real estate, drive bigger throughput, and make sure that from the same real estate, we are able to sweat it out and maximize the revenue per square feet.

"North-East India, we are the biggest brand. I am not talking about the laundry industry-the second biggest is Javed Habib Salons and the third biggest is Domino’s Pizza. Overtaking a brand like Dominos Pizza in any territory is a big feat."

-Arunabh Sinha

CC: In 2019, your scripted history by becoming the fastest brand to reach 200 franchises. Where did that begin?

Arunabh: It was partially a domino effect once we started franchising. People are used to restaurant franchises, gym franchises or preschool franchises, but we will take the credit, not as individuals but as a brand-we created franchising in a space where franchising never existed. When you talk about the laundry industry, it is probably as old as the food industry or any other industry. But unfortunately, it is very disorganized, nobody even thought of a laundry franchise. So, that was also a reason, it was a novel concept. Suddenly people started seeing that there are these very small cute looking 250-300 sq. ft stores, where clothes are getting washed in gigantic machines.

Suddenly, the number of people coming in began to rise exponentially. They started to touch the machines, trying to get a feel of them, trying to understand how it works. Some customers also started asking, if they wanted to set up something of this type, how could we help them. That’s when we started franchising and fortunately, because this is a low rental, low opex, low capex kind of a business, the franchise started becoming profitable. As a result of this, the franchise started recommending their friends, families and acquaintances.

Soon, UClean actually had to shift its office. We were in a much smaller office earlier and then we started realizing that we were getting a lot of visitors every day who wanted to invest, who had a bag of money and were very certain that they wanted to partner with UClean, but had no idea how to do it. So, we moved to the new offices. A majority of this happened through word-of-mouth publicity and the customers or existing franchises recommended more franchises. At the same time, thanks to Gunjan’s efforts, since she heads the digital marketing, we did a lot of very interesting campaigns. We focussed on women entrepreneurs and on how laundry is something that you are already doing or you are already controlling-so why not make a business out of it.

Gunjan: Women are working in their houses, they manage their kitchens, they make pickles, they are doing sewing and crochet, and a lot of other things. So, laundry is something that they know. Why not make money out of it? This is another success story-we have one of our top stores run by a woman entrepreneur. In fact, all our top stores are run by women. If we talk about our stores in Itanagar in Arunachal Pradesh or Dwarka in Delhi, it’s all women-run or women-operated.

CC: Tier 1 cities have been very accepting of this idea. But, what has been the response of tier 2 and 3 cities; the smaller cities and towns? Tell us about your presence in them.

Gunjan: I can say with conviction that tier 2s and 3s are our bigger success stories than Tier 1s.

Arunabh: I come from a tier 3 city, Jamshedpur and I am talking about Jamshedpur from thirty years back and it was much smaller than what it is today. So, you could realize that people living in these tier 3 cities, towns and small villages of India, are very aspirational. Although they have not been exposed to the brand, they travel a lot. When they come to Delhi or Mumbai, they see all these brands that are very novel in nature, offering services like laundry, dry cleaning or other services. They also want to bring it to their hometown. You don’t have jobs in Jamshedpur. The only job that is available in Jamshedpur is Tata Steel. Not everybody can get into Tata Steel. So, the majority of the crowd who are staying in Jamshedpur would have to either figure out a business or they would migrate to big cities like Mumbai or Delhi. And India is a nation of shopkeepers. If you look at the per square feet density, India has the second-highest density in the world after UK. So, we are shopkeepers by nature. We are entrepreneurs by nature and especially in smaller towns because you don’t have job opportunities available there, a lot of people are looking for interesting micro-entrepreneurship opportunities.

CC: Share with us that one moment when you felt that you had arrived in the smaller towns and cities.

Arunabh: We had a store in Ranchi and it was the second launch which was to happen. At dinner time, the franchisee took me out to a very famous restaurant in the city. While we were having dinner, I noticed that on the next table, there was a group of women who were having a kitty party and two of them were actually carrying UClean bags. You will never see that happen in Delhi. In Delhi, you will see it being used for carrying vegetables or groceries but in tier 2, they actually want to flaunt it- “We don’t get our laundry done at home by the maid, we outsource it to UClean.” That was a big moment for me, it was a moment of pride. It was also a very insightful moment on how aspirational we have become for a city like Ranchi. So, I think aspiration, lack of suitable job opportunities and the fact that by nature we are a micro-entrepreneurial country, all these factors have contributed to the growth of UClean.

CC: Needless to say, UClean has also created many jobs and employment opportunities for people in tier 2 as well as tier 3 cities in 2019…

Gunjan: Absolutely! At that point in time, not only were we the fastest to do 200 stores-nobody has done 200 stores in such a short period of time. Going by the multiplier effect also, in tier 2 cities, we were directly responsible for creating work opportunities.

North - East is really big. You can find our stores in tier 3 or tier 4 towns as well and a town as small as having a population of about 60,000 people.

We have recently launched in a place called Nirjuli in Arunachal Pradesh which has a population of 24,000 as per 2020 statistics. And then there is Kokrajhar, Naharlagun, Ghoramara, all these small towns are our big success stories.

Nirjuli, for example, there average daily sale is for about 7000/- rupees and the rental is 3000/- rupees. You can never imagine this happening for any brand in a city like Delhi or Mumbai.

Gunjan: Imagine they take out their rent as well as some of their monthly consumables in a single-day sale.

CC: How is it working together as business partners? What are the conflicts or the areas you both agree or disagree on? What are the discords? How is it translating from partners into business partners?

Arunabh: We started working together when we were in FranGlobal. But I think what has worked for us, and I will not say it was absolutely smooth, we do have a lot of conflicts. At the same time, we have also decided that who is the decision-maker when it comes to different areas. For example, if it comes to anything related to marketing or anything creative, while I might have very strong inputs, but at the end of the day, Gunjan’s decision would prevail. Even when you talk about Product and Technology because she has been leading this area from day one. So, while I give my inputs which might even sometimes be contradictory to what she is thinking and she would be prepared to listen to it but at the end of the day, I am also very clear about whose decision would prevail. Similarly, when it comes to franchise management, venue, franchise sales or accounts, my decision prevails.

We are very clear about where or which lines we don’t have to cross.

Gunjan: For budgeting, for instance, he releases the money, but I oversee how it is spent. When it comes to Marketing or the Customer Delight Team or when it comes to Product and Tech, all these are my areas. I am the decision-maker and I run it, he doesn’t interfere. When it comes to Sales, Franchising and Business Development, Fund Raise, all these are his areas and I don’t get into it. Initially, we used to fight a lot as there were a lot of overlapping areas. But we quickly realized that it’s not going to work like that. We need to do something about it.

CC: Do you also have discords while parenting or are those areas demarcated just as well?

Gunjan: I am the disciplinarian and I am the villain or the bad cop of the house. Having said that I think that our daughter doesn’t have that or at least she never shows us that disparity. She equally loves us both and she really doesn’t care.