Pioneering the Chinese Self-Storage Market: Locker Locker Adopts a Western Business Model
|Copyright 2014 by Virgo Publishing.|
|Posted on: 12/25/2013|
By Dallas Dogger
While the self-storage industry is a mature asset class in North America, it’s only just emerging in China. One of the newest operators is Locker Locker, which launched this year in Shenzhen, Guangdong Province, a major city north of Hong Kong with a population of more than 7 million. The company is the brainchild of Shenzhen business duo Charlotte Sun and Lawrence Yam, whose ambition is to be part of the pioneering group of entrepreneurs spearheading the launch of self-storage in the world’s most populous nation.
Locker Locker’s plan is to become a large operator with a chain of self-storage facilities in as many of China’s major cities and industrial zones as is practical and create brand recognition through the delivery of high-standard services. The company’s philosophy is quality and education. It believes that as it expands, consumer confidence will grow, as Chinese customers prefer larger companies with a good reputation. Locker Locker’s clear ambition is to give customers peace of mind.
An Idea Takes Shape
China's population is 1.35 billion, with a burgeoning middle-class estimated at close to 500 million and growing fast. The country will benefit from self-storage perhaps more than any other, and Locker Locker is at the forefront, creating affordable and convenient solutions to the age-old problem of insufficient space.
Canadian and British team members were brought in to assist in the development of Locker Locker. The owners set forth on a major fact-finding mission, including field trips to facilities in Canada, Europe, Hong Kong and the United Kingdom. They met with existing operators and construction companies on three continents, joining self-storage associations and educating themselves wherever they could.
Locker Locker’s first venture was not without challenges. As with all construction projects, team members had to research site options, undertake difficult negotiations with local officials, educate people about the concept, and overcome the perceived industry risks.
The company identified a suitable location within a densely populated urban area, and co-owner Yam managed the construction project and provided detailed designs. The builders had never heard of or seen a self-storage facility before, so it's a testament to the diligence of the owners that they constructed a first-class project on par with more established western operators.
The extra mile paid dividends for Locker Locker, as it has built a class-leading product that demonstrates the power of self-storage to the local community and developes a clear standard for the industry in southern China. It’s important at this early stage of the industry’s development that quality facilities are built to indoctrinate the market.
Building a Heartbeat
Locker Locker wanted to stand out immediately, create major impact and set a new level of design and management. The company installed the latest closed-circuit television solution, complete with remote-viewing capability via the Internet and a remote-monitoring station that is manned around the clock. To help manage the operation, it implemented SMD Software Inc.’s SiteLink Web Edition, which has software operating in Mandarin and support from SiteLink International in Brisbane, Australia.
The owners deliberated for months about marketing strategy, knowing brand identity would play a major role in enticing a society not yet familiar with self-storage. The brand name was chosen to create instant appeal and provide an idea of the types of services offered.
Logos and signage were designed, and luminescent lights now hang from the side of the building, which was constructed in a densely populated neighborhood next to a main arterial road. The company’s Chevy SUV, driven across Shenzhen each day, is emblazoned with humorous graphics to clearly illustrate the benefits of self-storage. The Locker Locker website is also published in multiple languages to appeal to the local community and the many Westerners who reside in the city.
The Road Ahead
Locker Locker is one of the first companies to attempt making self-storage a viable industry in China. It aims to attract individuals, corporate clients, small businesses, and white-collar workers and foreigners. Its developers will continue to build a diverse range of facilities and services, ranging from the almost unacceptable to top-end, institutional providers.
Locker Locker’s ambition is to educate and create demand throughout the region, raising awareness about self-storage using a systematic business model and scaling facilities at a rapid rate. Each newly planned property will provide hundreds of units in all shapes and sizes to appeal to a wide range of customers.
Additional revenue streams are also planned. Facilities will be constructed in densely populated communities to increase ease of access, and company moving trucks will be available to customers who don’t have access to a car or other transportation. This is a strategic move considering the number of motor vehicles per 1,000 people in China is estimated at approximately 85 compared to nearly 800 in the United States.
Seeing the Bigger Picture
Many Chinese entrepreneurs are investing in self-storage facilities all over the nation. The rise of the industry is providing new lifestyle flexibility and convenience to a growing middle class, making the concept popular with all types of people. As a result, Chinese operators are reporting healthy occupancy levels, raising the hope for a bright future.
There’s little doubt that China and Southeast Asia are poised for significant self-storage growth. The market's pattern is similar to that of the early Australian and U.S. markets, and Chinese operators have an insatiable need for knowledge. They have one major advantage over their U.S. counterparts: the benefit of 30 years of self-storage development history from which they can easily learn valuable lessons. In addition, the technology available today will make their jobs much easier.
Unlike the self-storage market in Australia and the United States, where small, mom-and-pop operators established the business, the Chinese market will be dominated by commercial and corporate operators. The industry will grow quickly, with most companies laying significant expansion plans.
China is a dynamic, fast-paced society, and Locker Locker is among the first self-storage businesses to successfully adopt the western self-storage model, with services and features designed to appeal to and serve the local market. This will likely ensure the company's ongoing success.
Dallas Dogger is CEO of Centreforce Technology Group, which has been trading in Australia for more than 10 years. The company specializes in self-storage software, websites and security, and offers a third-party application called RapidStor, which has been responsible for more than 500 online self-storage move-ins. Centreforce represents SMD Software Inc.'s SiteLink Web Edition in Australasia and is the developer of AccessEzy, a digital access-control system. To reach the author, e-mail firstname.lastname@example.org .