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Adapting for the Hong Kong Self-Storage Customer: MiniCo Asia Ltd. Finds Success

MiniCo Asia Ltd. has found success in the Hong Kong self-storage market by adapting the U.S. business model. The company focuses on unique amenities, cultural tradition, consistent pricing and personal relationships.

June 1, 2014

5 Min Read
Adapting for the Hong Kong Self-Storage Customer: MiniCo Asia Ltd. Finds Success

By Marilyn Leslie

Thirteen years ago, self-storage was in its infancy in Hong Kong. At MiniCo Asia Ltd., we found it exciting and challenging to develop facilities in the region. Today we enjoy a thriving business and good reputation. Our experience has been eye-opening, and we’ve learned a lot about our customers’ buying habits. While we've benefitted from the many similarities between the Hong Kong and Asia markets, we've also had to adapt the established business model to find success.

Location and Amenities

MiniCo Asia operates four facilities in Hong Kong under the MiniCo Self-storage brand.The American concept of location as the most important factor in a successful self-storage operation is also true in Hong Kong. Initially, when there were fewer than 20 facilities in the region, location was not as critical. As more stores have opened, location has become a huge deciding factor for customers.

When we opened our first two facilities, we drew customers from all over Hong Kong and even from nearby areas of mainland China. Now our customer base has narrowed somewhat, as people have storage facilities closer to their businesses and residences. However, if you can create an atmosphere of service and ease of use, customers will come long distances to rent space at your store.

We discovered that the amenities our customers want most vary from those offered in the United States. We provide work areas and conference rooms for tenants at no charge. Customers use this space daily and schedule their time to use it. We’ve even had to referee arguments between customers! In one situation, we had to add another work area to meet the demand. Customers use this space to sort inventory, work on a computer, listen to music and even practice the violin. We also offer free Wi-Fi and tea and coffee at our facilities. This differentiates our services and gives customers a value-added reason to select us over a competitor.

The sky garden at a MiniCo Asia facility in Chai Wan.Due to the lack of space of in Hong Kong, there aren’t many green lawns or inviting gardens. We created a "sky garden" on the roof of our Chai Wan store with lots of green and flowering plants. We provide tables and chairs for customers to use as a respite from the congestion of the region.

Ventilation is also a crucial factor to our tenants. In an area with high humidity, dense populations and little space, fresh air is an important health concern. We have fans mounted on the ceiling to keep the air moving and operate large dehumidifiers around the clock in areas that lack air-conditioning.

The Decision-Making Process

Compared to the U.S. market, the decision-making process is generally longer for Hong Kong self-storage customers. It usually starts with a phone call and then as many as three visits. Often the customer brings a family member to the facility to confirm his decision. Patience and follow-up are required to make a sale. It seems to be a very important decision, not to be taken lightly.

Hong Kong customers also stay for long periods of time. The average length of stay at our two oldest locations is more than three years.

Most Chinese place a high importance on numbers. Certain numbers are associated with negative aspects of life, while others are positive and associated with good luck. In performing the lock check at one facility, we discovered the units were not in numerical order as originally planned. In checking with the facility manager, we learned a customer had liked a certain unit location but not the number. We accommodated him by moving a “preferred” number from a vacant unit, thus creating a happy customer with a vested interest in his storage space.

When numbering the units on the fourth floor of one of our buildings, we avoided starting each unit number with a four because in the local culture, four represents death. The number three means life, so we used two threes in place of the four to identify the units.

Work area at a MiniCo facility in Kwun Tong.
Pricing

Pricing methods are also different in Hong Kong. We’ve found our clients communicate with one another, and our largest source of business is referrals. For this reason, we could not change the rates every week without upsetting current customers. New clients often want the same pricing as an existing tenant. If we offer any promotions to new customers, the established tenants complain and request the same discount. Our rate structure has to be consistent with frequent upward rate adjustments for all units.

Personal Relationships

Because renting storage space is such a big decision to people, we really get to know them. We work to create a personal relationship with every customer. Each time they visit their units, they’ll stop at the office to visit before accessing their goods. Our customers become our friends. When they go on holiday, they bring us gifts and photos. We receive personal e-mails from them. We give away movie tickets, trips and small gifts throughout the year to promote these relationships.

Most important, our customers accept the occurrence of accidents. Water in the units is a big problem in Hong Kong, particularly with older factories modified for self-storage. There have been several occasions where there has been damage due to water leakage. We apologize and offer some small gift. Most will accept the fact that “it was an accident,” and that’s the end of it. These issues are a way of life in Hong Kong.

It has been a rewarding endeavor to bring American-style self-storage to Hong Kong. We have learned to avoid the obvious while embracing the ambiguities.

Marilyn Leslie has been involved in the self-storage industry since 1998 when she began in the financial arena as chief financial officer for U.S.-based MiniCo Inc., then as president of Asian operations. She’s currently president of MiniCo Asia Ltd. During the last 10 years, she has worked in all areas of MiniCo’s self-storage business in Hong Kong. Her experience includes contract negotiations, facility planning and development, business modeling and budgeting, market assessment, finance structuring, reporting-systems implementation, and promotional planning. She manages four locations in Hong Kong and is responsible for developing and maintaining all critical business relationships with attorneys, bankers, vendors and others. For more information, www.minicoselfstorage.com.

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