Nairobi’s Growing Luggage and Parcel Storage Market
For many Nairobi residents, moving around the city with bags is a common challenge. Finding a secure place to leave luggage, even for a short while, remains a struggle. However, a growing number of small businesses are stepping in to meet this need, turning everyday inconvenience into a commercial opportunity.
One such business is ParcelPoint, founded by Daniel Gakwaya, CEO and founder. The idea for his storage venture came from observing similar systems abroad. “I saw it working in China. Smart lockers are everywhere. When I came back to Kenya, the gap was obvious,” he says.
ParcelPoint has rolled out smart parcel lockers that allow users to drop off and pick up items at any time without human interaction. These lockers are currently available at Garden City Mall and on Ronald Ngala Street in Nairobi CBD, targeting both individuals and businesses. So far, the company has installed 28 lockers at its CBD location and 48 at Garden City, bringing the total network to 76 across the two sites.
Daniel says the rollout has been gradual, shaped by both access to space and lessons learned on the ground. “It took about two months to secure the CBD space and get everything in place,” he says. “Once we had that figured out, the second location was faster.”
The business, started in 2024, was set up with an estimated initial capital of around Sh200,000. Rather than building a large operation upfront, Daniel says the focus has been on starting lean and scaling based on demand. Today, ParcelPoint runs with a team of seven across engineering, marketing and sales, handling both the technical and operational sides of the business.
Beyond convenience, the lockers address a broader logistical issue in the city: the lack of reliable addressing. “Many people don’t have a valid delivery address, so this gives them a fixed point where they can receive and pick up items using a code,” he explains.
The model taps into growing e-commerce activity, where missed deliveries and coordination challenges between buyers and sellers are common. By providing a centralised, secure drop-off point, the lockers act as an intermediary in last-mile delivery. “Our typical customers are everyday Nairobi residents, people moving around the city or exchanging items when their schedules don’t align. We see the most traffic between noon and 5pm, and also on weekends,” says Daniel.
Pricing and Commercial Viability
Getting pricing right has been a key focus for ParcelPoint. The company has kept pricing deliberately low to encourage adoption, with users charged Sh50 for the first hour and Sh10 for each additional hour. While still in its early stages, the model is beginning to show signs of commercial viability.
According to the founder, a fully utilised locker unit with 28 compartments can generate between Sh50,000 and Sh70,000 per month, depending on usage levels and location. The business model itself is relatively simple: ParcelPoint rents out small spaces in high-traffic areas and installs the locker units.
At Garden City, the company pays about Sh20,000 per month for a space measuring roughly two to three square metres, while the CBD location costs around Sh30,000 monthly. Choosing where to set up is largely driven by foot traffic and user behaviour. “We analyse how many people pass through an area, talk to people around, and then try it out,” Daniel says. “We are basically learning as we go.”
Security remains a key consideration, particularly given that the lockers are automated with limited human interactions. The company has installed surveillance systems and monitors the units around the clock. Daniel says these costs are treated as part of the upfront investment. So far, he notes, the company has not recorded any cases of theft or loss, a factor he attributes to both location choice and constant monitoring.
Expanding the Model
Building partnerships with logistics firms is the next phase of growth, though it comes with its own challenges. As a new entrant, gaining the trust of established delivery companies has not been easy, which is why, he adds, they are working to strengthen the brand. The long-term goal is to position ParcelPoint as a key player in last-mile delivery.
“We want to be the last-mile delivery point for online shops and logistics companies,” Daniel says. He describes the business as moderately capital intensive at the start, largely due to the hardware and location requirements. The initial investment is front-loaded, after which the model becomes more efficient.
“Once a location is set up, the ongoing costs are low because the system is automated. You don’t need staff at each site,” he says. “The model becomes more efficient as you scale.”
Challenges and Lessons Learned
However, challenges remain, particularly around awareness and trust. “Kenyans haven’t grown up with smart lockers, so there’s a first-encounter barrier,” he says. “But once they try it, they understand it immediately and come back.”
The experience has also shaped how he approaches growth. “The biggest lesson is that the idea is only 10 percent of it. Execution is everything,” he says. He advises starting small and learning from real use. “We launched on two locations, not 20, and that was the right call,” he says. Location, he emphasizes, remains the most critical factor. “A locker in the wrong spot will sit idle. The product only works when it’s where people actually are.”
Other Players in the Market
Away from the automated lockers, Esther Theru, founder of Inky Shelves, is also tapping into the booming business. She offers staffed services to online vendors and walk-in customers seeking short-term storage for their luggage. “We usually charge Sh100 for 24 hours,” she says, noting that bulky items are priced differently, depending on the space they occupy.
For security, customers are required to present identification when dropping off items, and the shop may conduct checks where necessary. The service complements her core “rent-a-shelf” model, which allows online vendors to store and sell goods without taking up an entire retail space.
Another similar model is employed by Pick and Drop Shelf, founded by Yvonne Gitonga, which operates two branches in Nairobi’s CBD at Kimathi House and Simara Mall. The business provides storage space for online sellers, allowing customers to pick up orders from a central location.
While this upcoming business sector remains largely unregulated, compliance issues occasionally arise at the vendor level, particularly with restricted products. “The only time we’ve faced challenges is when a vendor was selling vapes, which have restrictions. In such cases, the issue is handled with the vendor rather than the shelf business itself,” Yvonne says.
