Investment fever
The rising popularity of the mini-KTV services has made the industry attractive to investors in recent months.
In February, Changba, a Chinese app providing karaoke services through mobile devices, invested over 10 million yuan in Aimyunion Technology, which supports Minik, media reports said.
Also, M-Bar announced the same month that it had received 60 million yuan additional investment from Beijing-based Ubox, China's largest Internet-enabled vending machine system.
The short period of time to gain returns is one of the many qualities of mini-KTV favored by investors, analysts said.
The cost for a mini-KTV unit currently stands at around 30,000 yuan to 40,000 yuan in a first-tier city shopping mall. Costs include rent of a booth location, installation charges and Internet fees, the qq.com report said.
It usually takes two months for each mini-KTV unit to earn back costs, or at most six months in areas with less customer flow, according to the report.
The risks of investment in the new and emerging mini-KTV sector are comparatively low thanks to its light business pattern and low costs, Men Changhui, a senior analyst of Beijing-based Internet technology firm InnoTREE Co, told the Global Times.
Currently, start-ups in the growing mini-KTV industry are receiving angel investments. Whether this could further advance the industry to the next step to get venture capital still needs to be determined, Men noted.
At present, the rising sector, which is labeled as part of the ''sharing economy'', could acquire better financing channels and further impress Chinese Internet users, Liu said.
Effective strategies
China's offline mini-KTV markets' valuation is forecast to reach 3.18 billion yuan in 2017, an increase of 92.7 percent on a yearly basis, according to data released by Guangzhou-based market consultancy iiMedia Research on May 29.
By 2018, the market will continue to grow 120.4 percent year-on-year to 7.01 billion yuan, the data showed.
Despite the rising growth of the sector, however, mini-KTV operators are confronted with some challenges, analysts say.
For instance, operators should know how to employ big data to analyze the market situation and then strategically install mini-KTV booths in areas that attract ample customer flow, according to Liu.
Good location plays a key role in the successful operation of a mini-KTV booth. A booth placed in a dark corner of a quiet shopping mall will not make profits, analysts warn.
Share services such as mini-KTV, mobile chargers and umbrellas are managed by similar business strategies that take advantage of the ''sharing economy'' brand in order to make profits, Liu said.
The sharing economy aims to "cut capacity" for individuals, as well as business owners, in order to make full use of idle resources, Men said.
Sharing-economy sectors, like bike-sharing and home-sharing services that tapped into the market earlier, have demonstrated stable growth, and more new sharing services are expected to emerge in the Chinese markets in the coming years, Men said.
''Identifying a core business profit pattern is the key force for driving their growth,'' he said.
