Economic uncertainty in Asia could indicate a challenging year ahead for self-storage operators in the region, according to Helen Ng, deputy chair of Self-Storage Association Asia (SSAA) and CEO of General Storage Co. Pte. Ltd. (GSC), which operates facilities in Hong Kong, Malaysia and Singapore. Ng expects residential and business customers to “tighten their purse strings in anticipation of tougher times ahead,” she said in a press release.
Although she indicated a cautious forecast for 2016, Ng said seasonal demand and an increased reliance on self-storage from small businesses, including online companies without physical storefronts, could help offset setbacks from general consumers. “Households may try to discard their belongings instead of storing them, and businesses may reduce their inventory to reduce overstock,” she said. “However, unlike traditional warehousing where there is a lengthy lock-in period, the self-storage industry is uniquely poised to weather tough economic conditions. Our storage terms are flexible and, therefore, more appealing to households that need short-term storage and businesses that want the flexibility to adjust their inventory according to seasonal demand.”
One of the rising customer demographics is entrepreneurial women, particularly in online retailing, who use self-storage for inventory, according to Ng. “In Asia, there is a trend of women entrepreneurs leading the e-commerce revolution by setting up online stores retailing fashion and lifestyle products,” she said. “They eschew traditional brick-and-mortar stores for self-storage, and choose to operate from homes instead.”
This influx of online-business owners appreciates the convenience and services offered by self-storage operators in comparison to general warehousing and logistical companies, according to Ng. Some entrepreneurs also have invested in office space at storage facilities. “The [self-storage] industry is agile enough to respond to economic headwinds and creative enough to recognize and create new growth opportunities,” she said. “From offering bulk parcel drop-off and delivery services for our SME [small to medium-sized enterprises] storers to launching small offices on site, we have to constantly reinvent ourselves to stay relevant for customers and weather the economic downturn.”
Storing needs tied to the Chinese New Year could also assist self-storage operators endure any setbacks during the year. Demand from celebrating the Year of the Flame Monkey could come from retail businesses needing to store monkey-themed products as well as households undergoing renovations, the release stated. Chinese New Year traditions include a thorough cleaning of houses, decluttering and new purchases, which symbolizes the removal of the old to welcome the new, according to Travel China Guide. The Chinese New Year begins on Feb. 8.
GSC is owned by Singapore Post Ltd. (SingPost), the national postal-service provider in Singapore. SingPost acquired the storage company in 2013. GSC operates the self-storage brands Lock+Store in Malaysia and Singapore, Store Friendly in Singapore, and The Store House in Hong Kong.
Launched in 2014, SSAA is a trade association dedicated to assisting self-storage operators and industry suppliers working in emerging markets along the Pacific Rim.
Sources:
- Travel China Guide: Customs and Activities of Chinese New Year
