Will laundromats become the next big thing in Vietnam?

Discovering the Blue Ocean: Lessons from regional success

In 2024, Ho Chi Minh City's food and beverages (F&B) industry has faced significant challenges, with a record number of businesses closing their doors. According to data from iPOS, a platform that provides management solutions for over 100,000 restaurant and café businesses, more than 30,000 F&B establishments across Vietnam shut down in the first half of the year. This trend was especially pronounced in District 1, where rising rents and intense competition have created an unsustainable environment for many operators.

In this context, the laundromat business model emerges as a compelling alternative. With a proven track record of success in markets like Singapore, Taiwan, and more recently, Thailand, laundromats offer a reliable and profitable investment opportunity that is now poised to take Vietnam by storm. During the Wealth Investment 2024 panel discussion in Bangkok on August 17, two industry veterans shared their insights into the potential of laundromat investments.

The founder of Taiwan’s Queen Laundry, with over 40 years of experience in the laundromat industry, stressed that many early entrants into the business gave up prematurely. However, his persistence allowed him to build a multimillion-dollar enterprise, showcasing the industry's potential for long-term success. This underscores the importance of resilience and strategic planning in the laundromat business, which can lead to substantial financial rewards for those who remain committed and make calculated decisions.

Similarly, Shawn Chow, founder of Instawash Laundry Services in Singapore, emphasised the importance of creating a co-developing environment where customer benefits are prioritised.

“Don’t compete on prices; make sure a co-developing environment where customer benefits come first (clean, neat, and of value).”

His approach underscores the value of customer-centric services, which not only ensure loyalty but also drive long-term profitability.

Panel discussion at Wealth Investment 2024

A deep dive into profitability

Laundromats are not only stable but also highly profitable. The operation costs per wash and dry cycle are significantly lower than the revenue generated, leading to margins as high as 60-80 per cent in crowded areas. For instance, a laundromat on Nguyen Van Dau Street demonstrates this with its pricing schemes that ensure a steady cash flow while maintaining a healthy profit margin.

Approximately 70 per cent of the investment in a laundromat is spent on tangible assets – high-quality washers and dryers that not only secure value over the years but also ensure operational efficiency. Alliance Laundry System (ALS), the world’s biggest commercial laundry manufacture and a premium vended laundry solution, recently launched new combo machines that wash and dry in a single unit, available in 13 kg and 24 kg sizes. These machines feature a touchscreen with an updated aesthetic design, offering both functionality and customer appeal.

The ALS Washer & Dryer offers an even more convenient solution for busy urban customers

Closing the break-even window with strategic support

Recognising the growing demand in Vietnam, Alliance Laundry Systems (ALS) introduces adaptable laundromat models tailored for diverse urban settings. After securing a 65 per cent market share in Thailand, ALS is now expanding into Vietnam, offering investors a globally supported, proven business model. With ALS, investors benefit from comprehensive support, including expert guidance on selecting strategic, high-traffic locations, ensuring a quicker path to profitability.

Moreover, ALS’s dedicated sales and marketing teams work to attract customers quickly, boosting income streams and accelerating the journey to profitability. This combination of strategic location, cutting-edge technology, and robust marketing support makes laundromats a prime investment opportunity in Vietnam’s dynamic economy.

ALS’ investors are supported with a well-trained global team with years of experience in conquering emerging markets

With proven success in other Southeast Asian markets and backed by ALS’s global expertise, laundromats offer a stable, high-margin investment that aligns with the evolving needs of Vietnam’s urban population. For investors seeking a reliable and profitable venture, laundromats represent a blue ocean of opportunity – one that is ready to be explored.

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