Business | YEN FOR LIVING

Japan's laundromat bubble shows no sign of bursting

by Philip Brasor and Masako Tsubuku

Special To The Japan Times

According to the Ministry of Internal Affairs and Communications, as of 2013, 34.6 percent of all Japanese households owned washing machines with some sort of drying function. For the most part, these were drum-type (i.e., front-loading) appliances that both washed and dried, and thus the statistic did not take into account households with separate stand-alone clothes dryers. The ministry estimates that, counting these independent dryers, about half the country has the means to dry clothes by machine at home.

However, a different survey conducted by Tokyo Gas in 2013 concluded that 60 percent of Japanese households that own clothes dryers in any form never use them, the main reason being that people believe open-air drying is better, since sunlight supposedly acts as a kind of disinfectant. Seventy percent of all respondents, regardless of whether or not they have dryers, say they prefer drying clothes in the sun. Some also say they prefer the way sun-dried fabrics smell.

So if the majority of people who own dryers and washing machines with drying functions don’t use them, why do they buy them in the first place? The answer is not forthcoming in any of these surveys, but the sun is free, and drying clothes at home mechanically is very expensive.

According to various household appliance-related websites, the average cost of electricity usage for washing laundry at home is about ¥1.6 per load, while the cost for drying the same load is 28 times as much, or about ¥45 per load. Given that the average Japanese household with children does at least one load of laundry a day, that can add up to quite an expense. (If the dryer uses gas, the cost is likely to be even higher.)

Most people may not know about this expense when they buy their first dryer, and even if the consumer holds the belief that sun-drying is still preferable, sometimes it rains and you can’t hang your laundry outdoors. But — as in our case — once that first electricity bill shows up, they are likely to seek other options on days of bad weather, such as hanging the laundry in the bathroom. (Many new apartment bathrooms now come equipped with dehumidifying functions for just this reason, though those too can add to the monthly electric bill.)

Another reason people buy dryers is that they are too busy to hang laundry. In most cases, these people belong to households where the married partners both work full time, a situation that has been on the rise for three decades. An increasing number of these households are now using laundromats, aka coin laundries.

According to a recent feature in the Asahi Shimbun, almost every Japanese household has a washing machine, so why are so many of them using laundromats that cost them extra money? The newspaper’s reporter went to a laundromat in Fuchu, Tokyo, and talked to a 30-year-old homemaker and mother who says she has to do “two or three loads of laundry a day,” and when it rains there is no room in her home to hang laundry, so she comes to the laundromat just to dry clothes. The laundromat she patronizes has nine dryers, which cost ¥100 for every six to nine minutes, with the duration depending on the size of the load.

The laundromat also has four large-capacity washing machines, which cost ¥600 to ¥800 for 30 minutes, with the size of the load determining the cost. While the homemaker interviewed only uses the dryers, many patrons use both types of machines, and most of the customers are either single or married-and-working. They come on the weekend with a week’s worth of laundry and do it all at once, which may sound inconvenient compared to doing it at home, but a representative of appliance maker Electrolux tells Asahi that it is cheaper to use coin laundries for large items like winter coats and futons than it is to have them cleaned at dry cleaners and laundry services.

According to its own survey, 10 percent of Japanese households use coin laundries. The reporter also notes that the Fuchu laundromat is large, bright and attractively appointed, with wood floors and walls. It even has a small coffee shop in the back with couches. One woman told the reporter that she likes to come there “to relax.”

The health ministry reports that in 2015 there were 16,693 laundromats in Japan, and every year the number grows by “a few hundred.” Specifically, since 1996 their number has grown by 60 percent. Traditionally, coin laundries were built in or next to public bathhouses (sento), because most early urban apartments did not have private bathing or clothes-washing facilities, so when tenants went to take a bath, they could wash their clothes as they bathed.

This image has changed considerably. These days laundromats are more likely to be located in shopping centers and the middle of suburban residential areas. Moreover, they are typically large and multifunctional, offering a variety of choices with regard to load sizes and prices. One we visited in Sakura, Chiba Prefecture, even had a special machine for washing sneakers.

But the rise of the laundromat is not being driven only by demand. Many are franchise operations. One of the biggest chains is Mammaciao, based in Yokohama, which pioneered the laundromat franchise business and is responsible for more than 240 outlets throughout Japan. The president of the company told Asahi that over the past year, 90 new outlets have opened. Franchise owners rent vacant storefronts and install the machines provided by Mammaciao. The main advantage of the operation is that there is no need to keep personnel on the premises, because the company has a call center that handles all problems, including quick maintenance and refunds. Consequently, franchise owners save a great deal of overhead, though they pay a fee for the call center’s services. “It’s a perfect side-business,” the president says.

This “ease of use” is important, because many franchise owners in Japan are full-time salaried workers who want a second income but don’t have the time to run a business. Usually such people become landlords, but in today’s real estate market, what with the shrinking population and the increasing possibility of long-term vacancies for rental properties, being a landlord is not as secure and hassle-free as it used to be. Laundromats are much easier to run, and while profits aren’t huge, they are at least guaranteed and steady.

One 47-year-old salaryman told Asahi that he opened his first franchise three years ago in Tokyo with an initial investment of ¥30 million to cover equipment and renovations. His monthly expenditure is ¥150,000 for rent, ¥150,000 for utilities, ¥30,000 for part-time cleaning help and ¥40,000 for maintenance. Sales average about ¥750,000 a month. He now has two stores and made ¥8 million in profit last year. As one financial planner told Asahi, “It’s actually difficult to lose money” with a coin laundry franchise, especially now with interest rates so low.

One potential problem is that as laundromats become more popular and more are opened, competition is bound to cut into these profits, because once two or more outlets are available in the same general vicinity, someone is going to lower prices.

Yen for Living covers issues related to making, spending and saving money in Japan on the second and fourth Sundays of the month.