Boxed: The Wholesale Shopping App for Millennials
Boxed Inc. gives shoppers the best bang for their buck by allowing them to buy everyday items in bulk from an app on their smartphone.
Almost every city suburb in the United States has a warehouse or wholesale club. Typically spread over 16 to 20 acres of land, these mega-stores offer members heavily discounted prices for bulk quantities of merchandise. But what if you work and live in the heart of a big city, far away from a wholesale club, and don't have a car?
Unfortunately, due to high land prices and a shortage of vacant land space, it's not feasible for such warehouse corporations to establish their stores in the heart of a major city. As a result, city center residents had been missing out on bulk buying from membership-only retail and wholesale clubs like Costco or Sam's Club. Until, of course, the advent of the Boxed app.
Boxed Inc's founder and CEO Chieh Huang came up with the idea of the Boxed app— a warehouse-club delivery service— in 2013 while living in New York City. Huang's idea emerged in Manhattan, where he missed shopping at wholesale clubs like he did growing up in New Jersey.
Huang and his three techie friends, Jared Yaman, Christopher Cheung, and William Fong, founded Boxed in Huang's parents' garage in Edison, New Jersey. From there on, there was no looking back. In just over eight years, the company grew leaps and bounds, reached close to a billion-dollar valuation, and went public.
Stick around to unravel Chieh Huang's inspiring entrepreneurial journey.
Taking the Hard Road
Huang’s entrepreneurial spirit stems from his upbringing in Edison, New Jersey. He was born to low-income Taiwanese immigrant parents who struggled to make ends meet while raising him and his older sister. His mother worked the register of a takeout restaurant in Baltimore, and his dad sold small items at flea markets.
Huang graduated from Johns Hopkins University in 2003 with a degree in economics. The Johns Hopkins admission committee saw scope in Huang’s abilities and granted him a huge scholarship. The scholarship took care of a large part of his tuition. For the rest, he worked and borrowed his way through college. He also received a considerable amount from his mom’s generous employer.
Going Against the Grain
Huang was never shy about going against the grain. For example, after graduating, he taught English in a rural Japanese town called Niigata. Then, in 2007, Huang graduated with a law degree from Fordham University. Fast forward a few years, he quit his corporate attorney job and explored entrepreneurship instead.
Huang's entrepreneurial journey began in 2009 when he co-founded the mobile game studio 'Astro Ape' with two of his high school friends in a friend's basement in New York. After two years of running the company, it was eventually acquired by gaming giant Zynga.
Huang's next big idea took off from his parents' New Jersey garage, where Boxed was conceived in August 2013.
Boxed in a Garage
The idea behind Boxed started to develop in Manhattan in April 2013, when Chieh Huang and his three techie friends, Jared Yaman, Christopher Cheung, and William Fong, met to brainstorm their next big venture.
At the time, Huang was a new dad living in Manhattan. He didn't own a car and couldn't shop at wholesale clubs since they were far from Manhattan. However, he recalled going to wholesale clubs with his parents while growing up in New Jersey. Back then, his parents had borrowed a Sam's Club membership card from a friend as they couldn't afford their own.
During the brainstorming, Huang and his team were struck by the huge popularity of warehouse bargains and the challenge of transporting bulk purchases in your vehicle's trunk. To address that pain, the team leveraged their mobile gaming background to develop the concept of Boxed— an intuitive app for iPhone and Android that permits users to purchase goods in box club store quantities via online delivery.
When Boxed.com was launched in August 2013, the co-founders' stored goods in a garage. And they would pack and ship them from their living rooms in New Jersey.
At that point, Boxed was the first mobile app to allow customers to shop for wholesale products on the go. Moreover, you could skip paying membership fees associated with wholesale clubs.
The app's popularity and growth snowballed in just the first three months due to positive word of mouth. In the next three months, Boxed progressed from shipping to two states to delivering nationwide across the contiguous United States.
The famous American business magazine 'fastcompany.com' aptly referred to Chieh Huang of Boxed.com as "Costco's Worst Nightmare." Costco, at the time, was the second-largest global retailer.
Till now, Boxed has raised $365.9M over six funding rounds (including the Post-IPO Equity round in December 2021). With beginnings in Edison, New Jersey, Boxed has grown to be a $900+ million company, with its latest headquarters in Broadway, New York City, since 2016.
Boxed, Inc. - “The Costco for Millennials”
Boxed experienced robust growth due to its simple approach. The app offers price savings and the convenience of buying bulk, high-repeat consumables on a smartphone. On top of that, there's no membership fee associated.
The company's sales grew from $40,000 to more than $100 million in just three years, earning it the reputation as "the Costco for Millennials."
Their simple approach addresses the needs of every demographic, especially the millennials, because millennials typically don't have the time or transportation to shop at a massive warehouse club in the suburbs.
You can buy wholesale products through the Boxed app, including groceries, snacks, beverages, and household products. Moreover, the company serves two segments: Boxed Retail and Boxed Software & Services.
In May 2014, Boxed launched Express— an on-demand grocery delivery service for most parts of New York City, parts of Boston, and New Jersey. Through the service, customers could buy bulk sizes of fresh and frozen groceries and get the delivery at a delivery date and time they prefer.
Huang realized he was only as good as the people he led. He knew his organization would fall flat if all his employees were to walk out one day. Aligned with that realization, Huang focused on attracting and retaining the best talent. So, in 2015, Huang started funding major life events for his employees, which also garnered Boxed its share of media attention.
In January 2017, the Today Show highlighted the company's benefits and profiled the app as the wholesale shopping app for millennials. In 2018, Business Insider compared Boxed to the retail giant Costco. And in August 2019, Boxed partnered with New York-based retailer, Century 21 to create a line of beauty and clothing items.
Boxed Inc.’s Different Way of Doing Business
Boxed made headlines in 2015 when Huang committed to personally covering the college tuition costs of employees' children.
He planned to pay upfront in cash with "no strings attached" to solve the problem of social mobility.
To fund the project, Huang created a non-profit foundation in which a portion of his interest in the company would be used to pay for tuition.
Huang is a dream boss who even pays for workers' weddings. In 2016, he proposed to pay up to $20,000 for any employee's wedding. Huang thought of this when an employee in a Boxed fulfillment center was working a second job to pay his mom's medical bills and his own wedding. When Huang found out the employee wasn't going to be able to save enough to achieve both in time, he knew he had to help. Being the leader of a frugal company, he used his money to fund what he felt was impactful and meaningful. So he paid for his employee's wedding.
But does so much generosity hurt the bottom line? The opposite has held for Boxed. The cost of replacing and retraining workers is much higher than paying college tuition.
Huang prioritizes workers as part of a mission that differentiates his company in a crowded space. As a result, employee turnover has been extremely low, and the company has been attracting the best talent.
Leveraging Pandemic Growth
The demand for online shopping exploded during the pandemic. Boxed, too, witnessed tremendous growth. Huang knew e-commerce was here to stay.
Furthermore, the pandemic carved the path to expanding beyond grocery sales. Thus, a new Boxed offering was digital advertising. Another was an online marketplace for third-party sellers.
Boxed currently has three U.S. fulfillment centers (one each in New Jersey, Texas, and Nevada), which deliver bulk-sized groceries to customers within two days for an annual fee of $49.
Before the Covid-19 pandemic, Boxed did not sell its technology to other retailers. Yet, after Covid struck, Huang decided to license the company's software to diversify its revenue.
His first customer was the $83 billion Malaysian grocer— the Aeon Group. Many other retailers later, now software licensing makes up 5%-10% of the company's overall business.
The Road Ahead for Boxed Inc.
With humble beginnings in his parents' garage, in just eight years, Chieh Huang took his $900 million+ e-commerce company public on Dec. 9, 2021. By prioritizing his workers along the way, he's fulfilling his dream of showing a "different way of doing business" to future generations.
Boxed Inc's public market debut happened soon after its merger with special purpose acquisition company (SPAC) Seven Oaks Acquisition Corp. The IPO also followed Huang's announcement to license its end-to-end e-commerce platform as a software-as-a-service (SaaS). The company's technology includes customer-facing front-end and back-end operational software. It also features fulfillment through homegrown automation robotics.
Today, Boxed is a bulk-products e-tailer with a world-class team, well-aligned with Huang's focus on driving the company's B2B and B2C growth.
Post going public, Boxed is focused on B2B and B2C growth (including small and midsize businesses to Fortune 100 enterprises), enhancing its loyalty program,' Boxed Up,' and investing in the high-margin software and services business.
Huang is a caring human being devoted to making the world a better place. In a recent Forbes "the take away" show interview, Huang stated that going public and ringing that bell was "a beginning." "One that hopefully inspires students and children in underprivileged communities to think if that person can do it, then I have a chance at doing it."