How Boxful's Norman Cheung saw new opportunity in Hong Kong's traditional storage market
Self-storage firms are re-inventing the way Hongkongers keep their excess belongings, and saving them money in the process.
With more than 6,300 people per square kilometre and a median housing price 17 times the median household income, space in Hong Kong is anything but cheap.
A 2014 report by real-estate firm Colliers found that around 820,000 households in the city had no storage room.
"Self-storage is a niche sector in the property market, and till now has been largely overlooked," said Arthur Yim, manager of research and advisory services at Colliers Hong Kong.
"With Hong Kong people becoming more accustomed to using self-storage, plus the benefits of stable rental income and premium yields, it's a sector that looks set for significant growth."
In recent months several local and international companies, both start-ups and established firms, have entered the market. One of the best funded and most visible is Boxful, which raised US$1.5 million in a seed funding round late last year, some of which it used to launch an aggressive advertising campaign.
"Traditional storage has been around for many, many years but it hasn't really taken off," Boxful co-founder and chief executive Norman Cheung Sheung-ho told the South China Morning Post.
He explained that most traditional storage companies require customers to rent out a fixed space on a mid- to long-term contract, pricing out customers who may only want to store items while they're moving house or for the winter.
Boxful charges HK$49 a month for a 60x40x36cm plastic crate capable of holding objects up to 25 kilograms in weight, or HK$89 per month for a larger, "wardrobe" box.
"We charge by the month and only charge customers for what they use," Cheung said.
The company also offers a free box delivery and collection service.
The company's business model is heavily influenced by similar companies in the US, such as Boxbee, which operates in San Francisco and New York. These companies target young professionals and couples who might not think to use traditional storage methods.
Since launching in January, Boxful has stored more than 2,000 boxes in its two warehouses on Hong Kong Island, it announced this week.
Cheung, a graduate of the London School of Economics, started out working in finance. He left that career to move to Shanghai and join fashion e-commerce start-up Zooq.
"That's where I really learned a lot about starting a company," he said.
Working with warehousing and storage in a business context, as well as talking to friends about their storage problems, gave Cheung the inspiration for Boxful.
"Even in Shanghai, where you wouldn't expect people to need storage, that ignited the thought of looking into the idea," he said.
Cheung moved back to Hong Kong in October, and with co-founder Carl Wu quickly began developing Boxful and seeking funding.
"The execution by itself was a very short timeframe," Cheung said, something he put down both to his previous start-up experience and strong finance links, giving him an advantage other founders lack.
"Being in finance and investment banking for eight years helped me develop a pretty wide network of potential investors," he said.
While other companies, such as Singapore-based Vault Dragon, are expanding into Hong Kong, Cheung said he doubts Boxful will go overseas anytime soon.
"We do have the ambition to be in more than one market," he said. "[But] it's really important to get this market right before being overly ambitious."