Why Kampung @ Simpang failed

Why Kampung @ Simpang failed

Kampung @ Simpang Bedok, one of Singapore's first social enterprise hawker centres, has closed after a year of operations. The privately-run hawker centre, located at Bedok Market Place at Block 348 Bedok Road, opened in October last year. It closed on Oct 31.

The 32-stall hawker centre, which had more than 20 stalls earlier this year, opened to much fanfare. It was supposed to be an example of how new hawker centres, including the 10 new ones the Government plans to build over the next decade, could be run. Social enterprise Best Of Asia, which managed the hawker centre, is a group set up by 12 friends whose occupations include finance executives, consultants and construction industry business owners.

The official opening was in February, but vendors say business dipped drastically soon after. Many stalls closed and moved out from April. Aside from poor business, diners and former vendors say other problems included the centre's second-floor location which is accessible only via staircases.

They also complained about the cleanliness there. And diners said there was a dearth of good quality food, save for a handful of stalls.

A spokesman for Best Of Asia admitted in an interview with SundayLife! that the group's "lack of experience in running hawker centres" did not help matters.

It spent $500,000 to set up Kampung and another $500,000 to run it. It has lost a total of $1 million.

The aim was to help new business owners grow their businesses. It gave some vendors the option of being paid a salary, either with or without profit- sharing schemes, until vendors could afford to pay the rent.

Some vendors who could afford to set up stalls on their own paid full rental of about $3,000, while others enjoyed subsidised rentals, among other schemes.

Best Of Asia says it employed people such as ex-drug addicts, ex-convicts and the disabled to give them "second chances in life". It also welcomed people keen to start hawker stalls.

A Straits Times report in January found that, at the time, about half the tenants paid rental while the rest opted for support from Best Of Asia.

The landlord of Bedok Market Place, including the second-floor hawker centre, is Far East Organisation. The property company leases out its ground-floor space to tenants such as supermarket chain Giant.

Location

The hawker centre was accessible only by staircases at the four corners of the centre. This deterred diners such as the elderly, families with strollers and those with bags of groceries from eating there. They would have to climb more than 30 steps.

Shipping executive Ivan Koh, 29, says: "After doing our grocery shopping and with our two-year-old daughter in a stroller, it didn't make sense for us to climb the stairs."

The stairs would also get wet when it rained heavily.

The Best Of Asia spokesman says the group saw its potential as Simpang Bedok is a popular eating haunt, but did not see the second floor as a deterrent.

Lack of experience

Best Of Asia employed cleaners and trained them. The spokesman says because these cleaners were not professionals, they did not always do a good job. It did not help that when trained cleaners left, the group had to train a new batch of cleaners.

Diners and vendors noticed beer bottles piled up, and stacks of plates and rubbish from the night before, which often caused a stench.

Mr Daniel Surendran, 26, who ran Heavens, a stall that sold putu mayam and appam made from scratch, opened at 7am. He says: "Rubbish would pile up from the night before and it would be dirty until 9 or 10am, but I don't blame the management for this because finding cleaners is tough."

Vendors say they cleaned the tables and areas outside their stalls themselves, and also helped stalls that could not collect their own plates.

Those paying full rental for their stalls say the rent was too high as foot traffic was low, especially on weekdays.

The Best Of Asia spokesman says the group charged "market rates", and gave vendors subsidies and options to pay by instalments. He says some vendors still owe rental payments.

Mr Surendran says he started losing money steadily after the number of customers began to dwindle from April until he closed in October. He declined to say how much he lost.

Mr Michael Tan, 54, who used to work in a communications company, invested $12,000 to run a stall with his wife, a former helper at a Vietnamese hawker stall in Lau Pa Sat. He says there were days when he earned less than $100 a day and decided to close in June. He is currently looking for a job.

Vendors say it was also tough for them to predict how much food to prepare as the number of customers was often erratic. So perishables that could not be used after a few days had to be thrown away.

Lack of funding

Best Of Asia says it "did not have the financial muscle" to conduct wide-scale advertising campaigns although it sent out flyers once a month and promoted the hawker centre as a chill-out destination with band performances one weekend a month.

It attracted some crowds, especially on weekends. One stallholder says the bands attracted about 200 diners but the weekend crowd was not enough to sustain businesses there.

The spokesman says the management spent about $12,000 to $15,000 a month on hawker centre maintenance, including maintaining exhausts and cleaning grease tracks. He says: "All of us were volunteers. If we had a proper full-time management team, maybe it would have been better."

It came to a point, he says, when the group could "no longer move forward financially".

Ms Elim Chew, head of a panel set up by the Government in 2011 to rethink the way hawker centres operate, says: "Hawker centres as social enterprises require a lot of support in order for them to thrive. As it is a new model, aspects such as rental, manpower, public policies and so on, come into play.

"The team at Kampung @ Simpang Bedok worked really hard. However, high costs and many other factors led to the closure of the food centre. Regardless, it is a pioneering step they have taken in the hawker centre and social enterprise space."

Quality of food

Save for a handful of popular stalls, including Heavens, Gina's Vadai and Vietnamese House, diners described the food there as "lousy" and "sub-par".

Retiree Annie Lee, 69, says she and her husband, would frequent the hawker centre about once a week. She says: "We live in the area and my husband likes the Malay food. But not all the food was good and some of the dishes were pricey."

Mr K.F. Seetoh, 50, food consultant and founder of street food guide Makansutra, says a hawker centre should "sell food, not hype".

He says: "Whatever platform you want to use to sell food, whether it is a food court or social enterprise, you need to make sure the food is good. Singapore diners will go back for good food."

Ms Chew adds: "Social enterprise hawker businesses need to know how to be sustainable by managing their business costs. Other determining factors such as tastiness of the food and experience are also vital."

Moving forward

Ms Chew says that businesses have support from Enterprise Development Centres and the Action Community for Entrepreneurs to help them thrive and grow, and social enterprise hawker centres need equivalents to support them.

She feels that social enterprise hawker centres need "collaboration from the people, private and public sectors". She adds: "We need to help them (social enterprise hawker centres and hawkers) by advising them in operating a business in order for them to build a self-sustainable model."

While some hawkers lost money, others benefitted from Kampung @ Simpang Bedok. Mr Surendran, for one, gained a following. His mother runs a popular stall of the same name in Ghim Moh and he has been backed by investors to open new stalls at Kranji MRT and Jurong Point.

SundayLife! understands that chicken rice stall Big Bowl Chicken Rice now also has two other outlets after starting out at Bedok.

Mr Surendran says: "Kampung @ Simpang Bedok gave us a platform to start our business but it is sad that others did not fare as well."

rltan@sph.com.sg


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