Photo of self-storage units in Singapore.
2016 is shaping up to be a challenging year for Singapore’s self-storage industry as more households and businesses tighten their purse strings in anticipation of tougher times ahead.
Helen Ng, Deputy Chair of the Self-Storage Association Asia and Group Chief Executive Officer of General Storage Company, said: “Households may try to discard their belongings instead of storing them and businesses may reduce their inventory to reduce overstock.”
Despite the headwinds for the self-storage industry, Ng believes there are still growth opportunities.
For instance, some demand is likely to come from businesses selling Chinese New Year merchandise. Ng noted that unlike traditional warehousing where there is a lengthy lock-in period, storage terms at self-storage facilities are flexible, and thus more appealing to businesses that want the flexibility to adjust their inventory according to seasonal demand.
Ella Sherman, Founder of popular Singaporean brand Animal Merchandise, which specialises in animal-themed homeware, gifts and cushions, chooses to store her stock at Lock+Store’s Serangoon North branch.
“We expand and reduce our storage space according to the retail season, with Christmas and Chinese New Year being our busiest periods. Storing our inventory at a self-storage facility allows us to scale up to meet seasonal peaks and troughs while managing our operating budget throughout the year. It works out to be far more cost effective and efficient than using a logistics company.”
The rise of Ecommerce storers across the region has also created a new revenue stream for the self-storage industry.
“In Asia, there is a trend of women entrepreneurs leading the Ecommerce revolution by setting up online stores retailing fashion and lifestyle products. They eschew traditional brick and mortar stores for self-storage and choose to operate from homes instead,” said Ng.
Ecommerce storer and owner of Rainbow Lab, Ervinna Neo, who sells lifestyle products such as Hello Kitties, opted to use a self-storage facility because she had run out of space at home.
“I have been using the self-storage space since January 2015. I love the flexibility of going to the facility whenever I wish. There is also an onsite bulk parcel drop-off service. I can access the goods in my storage unit and mail them to my buyers straightaway.”