'Malls with kiosks sell better'

India should go for malls with kiosks as these would eventually score over malls with large departmental stores, Harman Meerzorg, director of Hari Darmawan Corporation of Indonesia, said yesterday.

"Malls with big departmental stores will die. India need not look at the US or Europe for example," he said, while speaking at the 6th KSA Technopak Retail Summit here yesterday.

Meerzorg had to stand in for Hari Darmawan -- the honorary chairman of Indonesia's largest retail chain Matahari Corporation -- who could not make it to the summit.

Such a model, Meerzorg added, was being experimented in Indonesia for the first time. "This retail format is different from whatever the world has seen till now," he said.

Meerzorg argued that since kiosks were owned and operated by small entrepreneurs, who were better motivated than employees of large departmental stores, they were in a position to offer superior service.

"An employee just cannot compete with an entrepreneur," he said. Such an arrangement, Meerzorg added, also resulted in cost-savings, since a kiosk is largely managed by the entrepreneur himself with minimal help.

When asked if it would become difficult to sustain the ambiance of a mall with a large number of small kiosks, Meerzorg reiterated that kiosk-owners had a vested interest in offering a high quality of service, unlike employees. "When it comes to service, nobody stands a chance against them," he said.

Most of the big malls offer competitive rates on the basis of their huge purchasing power. Meerzorg said small entrepreneurs could match these rates.

"Many of them have their own sweatshops," he added. However, he said malls which were not cost-competitive and didn't have the technology to handle their back-of-the-house work could not hope to survive in the long run. Meerzorg also exhorted Indian businessmen to look at smaller cities and towns to set up malls.

"There is a bigger opportunity in secondary and tertiary cities. Don't look at only those cities with a population of over 20 million because the competition is fierce. Also the multinational corporations will not go to the smaller cities," he said.