Hong Kong is known for its cramped and extremely expensive living space. So it comes as no surprise that the on-demand storage business has blossomed in the city in recent years.
There are now dozens of relatively large storage companies in the city.
SC Storage and Store Friendly are among the traditional players with which locals are familiar.
There is typically a minimum charge, say about HK$1,000, for a closet-sized room for a minimum period of three months.
It is up to the customers how to fully utilize the rented space. But in most cases, such a room can’t be filled up, and some space goes to waste.
Boxful, a four-month-old startup, came up with a new business model, which allows customers to rent as little as one storage box.
The monthly rent is as low as HK$49, and the service has become a hit.
The firm, founded by two young Hongkongers, Norman Cheung and Carl Wu, has scored US$1.5 million of funding from angel investors. Antony Leung Kam-chung, a former financial secretary of Hong Kong, is reportedly one of them.
Boxful differentiates itself from its peers in two main ways.
It provides standardized and stackable boxes, each measuring 22 x 15 x 12.7 inches. You can store 20 pairs of shoes, 75 T-shirts or 150 DVDs in a box, the firm says.
The main advantage of using such boxes is that there need be no wastage of space.
Another thing special about Boxful is that it runs its own pick-up and drop-off service.
Most storage firms provide such services, which can cost up to HK$500 per trip, depending on the size of the items. Because maintaining a fleet of vehicles is costly, other storage companies usually outsource the transport service to logistics firms.
Derek Kwik, managing partner of Brave Soldier Ventures, told the Hong Kong Economic Journal’s StartupBeat that there are risks involved when outsourcing the logistics service.
If a customer buys a pair of shoes through Amazon.com and the parcel was unfortunately lost in the post, Amazon could easily send another pair to the customer.
But if the customer puts valuable items or memorabilia in a storage company’s warehouse, and they got lost during transport, it would seriously tarnish the company’s reputation, Kwik said.
That’s why Boxful insists on operating its own fleet and logistics team, even that means higher expenses.
The founders said this would give their customers more confidence in their storage service.
Wu told Tech in Asia that logistics is the largest fixed cost for the firm. But he hopes that as the first mover and market leader in the segment, Boxful will be able to enjoy economies of scale in the future.
Some rivals are beginning to copy Boxful’s approach, including Airbox, Spacebox and StuffGenie.
Though the industry is thriving, it is also quickly attracting new competition. To survive and thrive, industry players have to constantly come up with new tricks.
Kwik suggests they be more creative about their marketing campaigns.
Storage operators could think of a theme to promote their services each month, such as “Big clean-up before Lunar New Year” or “Time to make room for special Christmas gifts”.
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