Market Trends of Hong Kong Self-Storage Industry
Personal Segment is Expected to Drive the Market
- Self-storage is commonly associated with personal use because some people require temporary space to house some important items. Furniture, appliances, electronics, dishes, kitchenware, and personal items are among the most common items that people store.
- Mostly, people in Hong Kong use self-storage during house-shifting. At the same time, in-home remodeling or even painting the house, short- to medium-term storage necessities may develop; storing items in short-term self-storage is a suitable option for moving objects. Also, self-storage can relieve stress by protecting personal belongings from damage during repairs.
- The living space per person in Hong Kong is much less compared to developed economies like the United States. To provide more context, according to the Census and Statistics Department of Hong Kong, in 2023, the average living space of public rental housing tenants in Hong Kong was 13.8 sq. m per person, and it has historically remained between 13 sq. m and 13.5 sq. m from 2017 to 2023.
- When people travel for work or pleasure, leaving their belongings unattended can be highly dangerous, mainly if they contain assets like valuable jewelry and vehicles. Instead of immediately selling belongings to the highest bidder and incurring a loss overall, customers consider a practical alternative like self-storage when moving abroad on secondment for employment. Larger objects like furniture, television, artwork, book collections, bicycles, and cars can be stored in moderately cost storage containers to be in better condition when consumers return from their trip.
- Self-storage businesses have expanded all over Asia, remodeling aging facilities and preparing brand-new construction. Numerous businesses doubled the floor space of their current locations in Hong Kong. For instance, companies such as Storefriendly, Storage One, and others opened new facilities in 2022 to meet consumer demand. With growing urbanization and lifestyle changes, the self-storage market is expected to grow significantly during the forecast period.
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Increasing Population Density and Rising Consumerism Driving the Market
- Hong Kong has experienced high residential prices and smaller unit sizes. This, combined with high-income levels for a specific section of the population and a consumption-driven society, generates considerable demand for self-storage. According to a report by the New York Times, a home in Hong Kong costs more than 20 times the median salary of the people.
- The market studied is also characterized by consumers' aversion to paying a significant amount as a security deposit to rent a storage unit. Although most players in the market are operational to procure the deposit, the user preference of not being willing to pay upfront can profoundly influence the current payment structure of the market in the long term.
- According to a survey conducted by Greenpeace, Hong Kong ranked at the top or second in 10 out of 12 indicators that confirmed a tendency to overspend on material goods due to an unhealthy reliance on shopping.
- As consumers expect next-day deliveries, companies have come to value logistics even more and have resorted to self-storage. Multiple market vendors have acted positively on a similar note. Along with the rising growth of the e-commerce sector in Hong Kong, niche service demands, like climate-controlled environments and specialized spaces, are expected to provide growth opportunities to the self-storage market in the near term.
- The expansion of e-commerce and the opening of smaller e-shops is also expected to act as a significant growth driver for the market. Larger e-commerce firms increasingly use third-party logistic services due to a need for more space. According to the Office of the Communications Authority, e-commerce is expected to account for 5.6% of total retail sales by Oct 2023.
