Many SMEs, both B2B and B2C, have seen their business drop off sharply in recent months. A few niche firms, though, have turned out unexpectedly stable. People Matters spoke to one of these: Singapore-based self-storage firm StorHub Self Storage, which was formerly part of property company CapitaLand. Here's what StorHub CEO Mike Hagbeck shared.
What impact has COVID-19 had on your business in the last few months?
In our industry, what happens when income is not so good is that people become a little cautious. We're not seeing a lot of move-ins, but we're not seeing a lot of move-outs either, and that has kept us reasonably stable. We have a business in Shanghai, and they have seen the same thing—they're now bouncing back quite well. So we're quite optimistic about coming through this situation.
On the other hand, our marketing and advertising has been affected. We carry out marketing and advertising for two reasons: one is to educate people about self-storage, because most of the population of Singapore doesn't know what it is. Secondly, we try to get them to contact us for their needs. And what happens there is that they contact our call centers, get an understanding of the service and the pricing, and then they come down to visit the property and choose the space they want. And that's where the challenge has been.
In normal circumstances, you want the customer to come in; you want to build a rapport with them and show them the facilities. We've been able to continue doing that for some of our properties, but for a number we've had to build digital alternatives.
How have those alternatives been working out?
Well, you can send the customer photos of the unit, you can send them a map showing its location and how to navigate the facilities, you can send them all the information about the property's features. And yes, you can automate our business more, but I especially think that the face-to-face contact is very important. We tend to employ likeable people who enjoy talking to our customers, because this is a customer service business, after all.
This digital shift has been a big change, and there's a lot to get used to. On the one hand you have customers who are a bit shy and prefer to do everything themselves. But then some customers want to get to know the people; they want to know who to talk to if something goes wrong. So we've had to work on that.
How about remote work for yourself and your team: how has that been going?
We've been holding regular video conferences for all the teams, so that there is communication and transparency into what each department is doing. I also think it's important that everyone is able to see each other turning up for work, that there is still accountability.
I was convinced before this that productivity will be diabolical when working from home, and it is, when you add in young children. But people are also more reasonable now—when everyone's in the same boat, no one is going to be too judgemental about informality. And we have been able to continue operating well enough that I think I'm less opposed to working from home, and I'm sure there are other CEOs who have come to think the same way.
With remote work apparently here to stay, do you see the demand for self-storage going up?
I've been on a few video calls where some people were clearly having to make do with their location. Housing space (in Singapore) can be pretty small, and with the spouse and children at home, and sometimes the extended family as well, it's even more crowded. People may have been using their spare rooms for storage before this started, but I think that at some point, they will get fed up with having items occupying the space that they could be using. There's going to be a segment of the market that becomes a lot more conscious about what they have in their houses, and these are the people we can reach out to. So, optimistically, yes, the demand will go up.
It's only been a bit more than a year since StorHub was bought over. How are you keeping your investors reassured during this period?
We give them very regular updates on our performance, and since we have been quite stable and even achieved some growth, we're able to give them good news. They've also been willing to spend time with us, even though they've been very busy with the other investments in their portfolio that have been affected by this situation. The fact that we have a good management team in place, that we have the know-how to keep the business stable and growing, gives them comfort that if we want to expand in the future, we have a good platform for doing that.
Could you share any plans or projections for the eventual recovery?
We do have plans for several different scenarios. We are going to expand—quite aggressively—and add five new locations in Singapore over the next 12 months. While we can't really visit properties to view them, we have already decided on the ones that we plan to acquire. We feel there is a lot of potential in Singapore: space here is very squeezed and many people are still unaware of self-storage as an option. We're also expanding in China, more slowly, although it is a more difficult market, and we do have plans for other countries around the region. The limiting factor is obviously that we can't travel there.
We're looking to increase our head count by about 15 percent in Singapore. We need more staff now, and in fact, we had taken on some staff earlier, but were not able to onboard and train them as that had to be done face-to-face. And we will progressively be adding people in Singapore to the end of the year to support both our domestic and regional expansion.