Mini warehouses becoming popular in HCMC as small online sellers thrive

Thu, owner of AOB store, an importer of South Korean cosmetics for online sales, rents 12 cubic meters of space at a mini warehouse on Vo Nguyen Giap Street in Thu Duc City for VND5 million (US$208) a month.

She chose to rent there for one year due to the flexibility and good price it offered.

She said: "Cosmetics products do not take up space, and when packed in boxes can be stacked on top of each other. I can sit in the warehouse or a shared office and prepare the goods."

The facility has cheap shared storage and more expensive private space with drawers of 1-23 cubic meters size. Lessees can keep the warehouse key and go in and out by themselves around the clock.

Tuan Anh has rented two cubic meters at a mini warehouse for the last three years to store golf equipment and some household items.

He said: "I chose the mini warehouse because I am familiar with this model."

He knew about this model while living in the U.S., he said.

Leasing storage space by cubic meters is common in the U.S. and western Europe but relatively new in Vietnam after making an appearance only five years ago.

According to Indian market research company Mordor Intelligence, the industry is likely to grow at 4.1% a year in 2021-26.

Aric Austin, founder and CEO of MyStorage, which has four storage facilities in HCMC and the southern Dong Nai Province with a total area of 2,000 square meters and 3,000 customers, said his company’s revenues are growing at 55-80% a year.

"In the last two years the market has had 4-5 more competitors, and so we have upgraded online booking services, operating software, security, and temperature control."

The competition includes Saigon Storage, TITAN Containers, Extra Space Asia Corporate, and KingKho Mini Storage.

Analysts and industry insiders expect the mini warehouse lease model to grow strongly.

Mordor Intelligence expected more individuals to rent space by the cubic meter due to the growing urbanization in Vietnam.

Denser urban populations mean living space is shrinking and becoming more expensive.

HCMC and Hanoi have an average area of 74 square meters per housing unit compared with 92 in the U.K. and 185 in the U.S.

The livestream room in a mini self-storage rental facility for tenants involved in online selling. Photo courtesy of MyStorage

Another driving force behind the mini warehouse boom is the mushrooming of small and micro enterprises that need to save on warehouse rentals.

Many of them are in e-commerce like Thu, the cosmetics seller.

Austin said e-commerce has contributed to his company’s success.

MyStorage has opened livestream rooms in its self-storage facility in HCMC. It is now preparing to expand to Hanoi and Da Nang.

John Campbell, associate director and head of industrial services at Savills Vietnam, said: "We see that land availability for logistics in HCMC is becoming increasingly scarce. As the area becomes smaller, logistics operators will tend to build taller warehouses, and leasing by the cubic meter will further develop."