Internet-powered niche

If karaoke booths have yet to fully convince consumers and industry professionals, they have been quick to attract venture capitals.

In early 2017, M-bar received an investment of 60 million yuan ($8.7 million) from Ubox, China’s largest manufacturer of vending machines. Around the same time, Beijing Kuzhi Technology Co. Ltd., developer of China’s most popular mobile karaoke app, announced a strategic partnership with Aimyunion Technology, manufacturer of Meda minik mini karaoke booths.

Lei Hongzhen, Professor of Business with Shaanxi Normal University, noted that karaoke booths cater to the needs of a certain niche market and therefore enjoy promising prospects. “Whether a given business model is successful or not depends on whose demands it meets and how it does so. Clearly, mini karaoke parlors are meeting young people’s demand for entertainment,” he said.

But Lu Zhenwang, an Internet industry analyst, questioned whether the booths could be sustainable. Traditional KTV clubs can generate revenue from multiple sources, not the least of which is beverage consumption. Karaoke booths, for their part, can only rely on direct user fees. “In terms of environment, KTV clubs win hands down. When the heat fades away, how many consumers will the KTV booths keep?” asked Lu.

As an emerging business powered by the Internet, the only way for KTV booths to survive and thrive is through constant innovation, experts argue.

“Admittedly, as they lose edge as a fashionable and chic entertainment option, they will be abandoned by consumers. But as a product of innovation, karaoke booths can find a future through innovation,” Wei said. Comments to houweili@chinafrica.cn