Retail kiosks low-risk option for entrepreneurs Posted by Kiosk System India | at 5:08 AM

Dhiraj Kumar Singh always dreamt of setting up his own retail venture but was constrained due to lack of capital. He finally started selling chocolate brownies in a mall and without much by way of investment.

“I saw kiosks in various malls in Delhi and this attracted my attention. After a bit of research I realised this could be the least risky bet with low investment to start my dream store,” says Singh who runs DK Chocolate Fountain through a kiosk in Delhi’s V3S mall.

For many new entrants in retail, a kiosk is a great opportunity to experiment with their idea before taking it to a larger scale. And with the downturn, it has made even more sense for a number of new retail brands. “It gives a new retailer live feedback without having to spend too much money initially,” says Asitava Sen, director, business-consulting services at The Nielsen Company.

Kiosks usually take up the most premium space in a mall—the atrium—and therefore rental rates are nearly double that of larger stores in the mall. “A kiosk is usually in the 60-100 sq ft range and even with a higher rental the entrepreneur does not need very high startup capital. This apart, unlike a retail store, a kiosk saves on the cost of doing up the interiors of the store,” says Jaideep Wahi, director, retail services at Cushman & Wakefield.

After starting with a standalone retail store in Goa, Happily Unmarried, a firm that’s sells whacky gift products, decided to experiment with the kiosk model as it proved more viable. “It is better to have a small kiosk in a very high footfall zone in a mall than a large retail store,” says Rajat Tuli, co-founder, Happily Unmarried.

“The kind of rentals prevailing in malls was not viable for our business. We have a small inventory and a kiosk suits us best.” Tuli explains that the rent should not be more than 15% of sales and this can only be achieved using a kiosk. In a mall store the rentals could be around 33% of sales, which is unviable for a small operator.

The advantage of a kiosk in a mall is that if it doesn’t work, the owner can pull out in a month, unlike a store which is leased for a minimum duration. Happily Unmarried launched kiosks in Delhi, Ludhiana, Gurgaon, Mumbai and, recently, in Bangalore but the Ludhiana and Mumbai ones had to be shut down. The company renews its kiosk contracts every three months. Its kiosks are in the 60-100 sq ft range and cost between Rs 1-1.5 lakh to set up, in addition to the rentals it pays.

The retail industry in India is worth $410 billion currently of which about $20 billion is modern retail, which includes malls and chain stores. Kiosks make about 2-3% of modern retail at present according to industry estimates.

“In many cases, a kiosk is a temporary space for promotion depending on the season. It usually occupies an eye-catching space in a mall which is accessible to most customers,” says Deepak Zutshi, marketing manager at City Select Walk in New Delhi’s Saket area. When Anju Srivastava contacted Select City Walk to setup a potted plants kiosk called Win Greens, the mall management was very excited about the prospect of having an interesting store in the atrium. “The mall showed interest in my kiosk as it could beautify the mall as well,” says Srivastava.
Source: indiatimes.com