Karaoke box businesses in Japan sing the blues
KARAOKE operators in Japan are struggling to secure profits as customers purchase less food and drink and more frequently go to karaoke alone. The business environment has forced major operator Shidax Corp to effectively end its management of karaoke “boxes”, highlighting the industry’s difficulties.
According to a white paper on the karaoke industry complied by the All-Japan Karaoke Industrialist Association, the number of karaoke customers fell below 50 million in the 2000s, with the number of outlets tumbling to less than 10,000.
The decline is attributed to a drop in customers following the economic slump. The industry nevertheless stabilised as karaoke became popular as an easygoing leisure activity.
In recent years, however, fewer people go out for karaoke after work or for parties or other occasions, with large groups at night purchasing food and alcohol declining.
At the same time, a growing number of students visit outlets during the daytime when rates are cheaper.
Shidax struggled to react to the changes in consumer habits. Although its main business is school lunch services, the company entered the karaoke business in 1993. It established about 300 “restaurant karaoke” outlets, mainly large ones in suburban areas that provide highly rated meals.
However, due to growing competition and declining customers, the subsidiary operating the outlets recorded net losses for three consecutive business years.