With a price that starts at 20 yuan/half hour (about $3), mini KTVs have all the functionalities of regular ones including singing sessions, recording, the possibility to share the “prowess” via smartphone and to compete with friends. They can be easily compared to bike-share schemes being managed by no staff and with payment automatically made through a dedicated app.
It might appear peculiar to westerners but those kind of KTV are becoming a phenomenon in China - with a market size expected to reach 3.18 billion yuan (485 millions de dollars) in 2017 - and is starting to be seen as the next big business opportunity.
First, the price is relevant in the matter. Being cheaper than traditional KTV, many users are finding it more enticing to rent the mini KTV since it is fast, flexible and good customer experience. Their location is actually pretty well thought: many can be found in “entertainment area” such as shopping malls, theaters or supermarkets. Therefore they attract customers where they gather the most and because of the low cost of equipment, the boxes can expand extremely fast.
Secondly, it is an O2O model, which is a concept that is well diffused in China. Every user needs to create their own account online and can share what they sing on social media. As they log in via social apps such as WeChat and QQ, this means Mini KTV will have huge amount of information on users and will be able to personalize the experience with the help of other companies. For instance, cooperating with music label is another way to expand their business as Mini KTV can be the offline store for online entertainment products.
Mini KTV has still a lot of things to improve, but based on what we experienced with Mobike, its growth speed might be faster than we imagine. It will be another good practice in sharing economy.
By Mu Cui, Senior Strategy Analyst