Boxed co-founder and CEO Chieh Huang is focusing on millennials who want bulk-size deals on items like toilet paper and peanut butter — but who can’t or won’t drive to warehouse stores. His strategy: Most customers order through an app and get two-day delivery, and there’s no membership fee.
The company’s sales hit nine figures in its third full year of business, and Huang sees an opportunity for significant growth. Only 2 percent of the approximately $200 billion U.S. warehouse club business is now done online. About 80 percent of Boxed customers are age 25-44, whereas he says 60 percent of traditional warehouse store shoppers are boomers.
The average order is $100 total or 10 items, Huang says, meaning virtually all shoppers meet the $49 needed for free shipping. Items are shipped throughout the country from distribution centers in Las Vegas, Atlanta, Dallas, and Union, New Jersey, where the company is based.
Huang [pictured above], 35, the son of Taiwanese immigrants, is a former corporate lawyer who also founded Astro Ape, one of the first mobile game studios, which was later acquired by Zynga. He has pledged to pay for college tuition to his employees’ children.
Huang talks with The Associated Press about the inspiration for Boxed and why he sees big potential.
Q. How did your experience with starting a mobile game studio affect your move to start Boxed?
A. Even as forward-looking of a game studio as Zynga was, they were swept away when mobile came and ate all their share. And so we thought that actually might happen in many other industries. And the biggest industry where we thought we could make an impact on was retail.
Q. What inspired you to start Boxed?
A. I grew up in the ‘burbs and went to Price Club every other weekend with my family, and then I…