Nice little earners

PUBLISHED : Tuesday, 14 August, 2007, 12:00am
UPDATED : Tuesday, 14 August, 2007, 12:00am

Alice Li Chui-ting's day job is organising polls for a finance magazine, but her heart is in designing fashion accessories. And after years of making costume jewellery on the side, she longed to open a shop selling her work. Last year, she finally realised her dream - but her 'shop' is a display locker.

Li rents a 40cm square cubbyhole to sell her hand-crafted costume jewellery. It's among 100 display boxes at Consignment, a 350 sq ft cubicle shop in Causeway Place that leases space to people who want to sell small items.

Cubicle shops began to surface in the city last year, mostly in malls in Mong Kok and Causeway Bay. The idea for the diminutive displays originated in Tokyo's Akihabara shopping district, says Consignment owner Steve Kwan Kwok-kei, whose shop was among the first cubicle outlets in Hong Kong.

In return for monthly fees, operators provide not only display space but also help with handling sales and queries from customers. Charges vary depending on the position of the display space. An eye-level compartment near the entrance may cost more than HK$1,000 a month but one in a less noticeable position just HK$500.

Unlike Akihabara, a geek's wonderland dominated by computer paraphernalia, electronic gadgets and anime merchandise, Hong Kong's shops sell a range of products that appeal mainly to teenagers and office workers.

'A cubicle shop is like a mini department store where people can find different quirky products in one place,' Kwan says. 'The diversity aims to appeal to different tastes and budgets.'

Cash-strapped customers might be content with a HK$5 Hello Kitty sticker but those with bigger wallets might pick up a Transformers figure for HK$3,000 or a luxury watch for HK$10,000.

The shops typically stock brand-name goods, knick-knacks, beauty products, accessories, and collectibles such as model cars and capsule toys, says Tsoi Ka-si, who runs a cubicle shop at the CTMA Centre in Mong Kok. Sometimes people even rent display lockers to sell such things as tropical fish.

'Customers who visit cubicle shops are on a treasure hunt,' she says. 'Collectors come looking for vintage Coca-Cola bottles and office ladies come in search of second-hand Louis Vuitton bags.'

The increasing popularity of online shopping has helped fuel the growth of cubicle shops. Many customers browse online but prefer seeing products before paying, Li says. 'Some people are still sceptical about online shopping. They don't know if we are reliable. So having a display box for potential customers to view our designs gives them greater confidence.'

Greater ease in making parallel imports is another factor. 'Nowadays people can easily buy products over the internet,' Kwan says. 'In the past they could only buy them at parallel importers in Mong Kok or Causeway Bay.'

Kwan, who used to run a shop specialising in parallel-import sneakers, could sell a pair of HK$900 shoes for HK$2,980. 'That was crazy. The sneakers were snapped within three hours after hitting the shop,' he says.

Parallel import shops such as his suffered as more collectors went into business. 'Now many people know where to source the products but lack an outlet to sell them,' says Kwan. 'Cubicle shops fulfil their need.'

But when he opened his first cubicle shop at the Sino Centre Arcade in Mong Kok a year ago, some tenants simply saw it as a way to clear their homes of unwanted items, from old calculators to Kuan Yin statues.

'People tried to sell whatever they had without thinking about what the market wants,' he says. 'We prefer tenants to sell something unique or limited edition. I don't want my shop to turn into a tacky second-hand store.'

However, most of Kwan's tenants are novices. 'They often don't know how to set prices, or aren't flexible enough to respond to fickle trends,' he says.

He cites a tenant who was stocking Hello Kitty badges: although all the rage early this year, they'd lost popularity after a couple of months. That's why he urged him to switch to Death Note merchandise instead. 'You can't sell the same thing all the time because fads keep changing,' he says.

Kwan is delighted that budding designers and artists are turning to cubicle shops as an alternative to conventional retail space, which is beyond their means; even a 100 sq ft basement shop in Mong Kok may cost HK$20,000 to rent.

Li, 29, has been making accessories for friends and family since her teens but didn't think of selling them until she saw handmade trinkets being sold in a cubicle shop in Mong Kok.

Now she sells her designs - mostly earrings and necklaces made from acrylic, glass beads and brass - in two shops in Causeway Bay. Her three display lockers net about HK$8,000 each month and she's planning to rent a fourth from next month.

This new form of consignment sales suits part-time designers such as Li, who don't have the time or money to run their own shops, she says. 'Cubicle shops can attract more crowds than a typical boutique because people are curious to see what products are available inside.'

It has also attracted craft hobbyists such as Today Li Yi-ping and Macy Chan Chi-kwan, who sell handmade clothes for the popular Blythe dolls through a Mong Kok cubicle shop. 'It's too much pressure to open our own shop,' says Li, a fashion student at Hong Kong Polytechnic University.

The shop displays have even inspired young people who weren't dabbling in crafts. Fashion store assistant Carmen Cheng Hoi-yi, who has no design training, says they encouraged her to begin making costume jewellery. 'Without cheap retail space offered by cubicle shops, I probably wouldn't have had the urge to create my own accessories.'

Cheng, 21, experimented with different styles until she developed her own. 'At first, I didn't know who my customers were. Then I started figuring out what they wanted,' she says. 'It's important to talk to the sales people because they're the ones who serve the customers.'

Despite the low cost of entry, the usual business considerations apply. Alice Li is one entrepreneur who learned the hard way how vital picking the right location was when renting her first display box in a Mong Kok shop. After one month she'd sold just one pair of earrings and after several months, was barely breaking even. Trade picked up dramatically when she switched to a shop in Causeway Bay. 'Location is very important. People tend to look for toys in Mong Kok, but accessories in Causeway Bay,' she says.

One drawback of cubicle shops is a lack of communication with customers, she says. 'We can find out what sells best, but we can't customise pieces because we're not in the shop. Service also affects sales, but it's hard for shop staff to give equal attention to every tenant.'

Competition can also be intense when several tenants are selling similar items. 'But reducing prices isn't the answer,' Li says. 'That only traps us in a vicious circle. The only thing to do is improve the quality.'