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Mini KTV operators facing off

Release time:2017-06-28    To share:  

A GROWING number of mini KTVs are popping up in shopping malls across the city, as operators are trying to tap the market as soon as possible to gain a firm foothold, the Shenzhen Evening News reported yesterday.

Two mini KTVs called miniK, which look like telephone booths from the outside but have karaoke equipment inside, have been installed in Coco Park by the Guangzhou-based company Aimyunion.

According to Zhang Yun, head of the company’s Shenzhen office, there are nearly 600 mini KTVs in the city, more than 200 of which are operated by the company.

Zhang said the market for mini KTVs in Shenzhen is still unsaturated and the company is soliciting franchisees to expand its business in the Pearl River Delta region.

Data from iiMedia Research shows that the market for mini KTVs in China is expected to generate an output value of 3.18 billion yuan (US$466 million) this year, up by 92.7 percent compared with last year. Besides, the output value will continue to soar by 120 percent to 7 billion yuan next year.

As the market appears promising and tempting, many mini KTV operators have geared up to confront competitors.

In February this year, Aimyunion obtained an investment of over 10 million yuan from Changba, the operator of a popular karaoke app. Soon after that, another mini KTV operator called M-bar announced that it had received 60 million yuan in angel investment.

On April 10, Aimyunion sued three other mini KTV operators, including M-bar, for patent infringement and demanded 160 million yuan in compensation. The case is still being heard. In the meantime, several other mini KTV operators have entered the market one after another.

Chen Jiahao, a business manager at M-bar, said the “flames of war” have spread to northwestern China as the company is expanding its business from Xiamen to Ningxia and Gansu. He said whether a mini KTV operator occupies the vantage-point locations in a city would determine the sustainability of its competitiveness.

Lu Xun, an Aimyunion franchisee, said he regrets having hesitated to invest in the mini KTV market last year, because after this Spring Festival, he found, to his disappointment, that many big shopping malls in Guangzhou and Shenzhen had already been occupied by other mini KTV operators. Now, he has to turn to second and third-tier cities.

Two miniK KTVs franchised to Lu were put into use in a shopping mall in Foshan on April 12. Each KTV cost him 18,800 yuan, while the monthly rent for the space in the shopping mall is 3,000 yuan and the utilities and maintenance fees cost him 3,500 yuan per month. The miniK producer will also take a 15-percent share of each month’s revenue.

According to Lu, the KTVs can earn 200 yuan on workdays and around 500 yuan a day on weekends and during holidays. He put another M-bar mini KTV into operation in Zhaoqing last month and launched two M-bar KTVs in his hometown, Shiyan in Hubei Province, on Friday.

Currently, Lu is working with his brother and looking for good locations in Wuhan to install more mini KTVs.

(Zhang Yang)