The market of mobile karaoke apps that combine characteristics of live streaming and music sharing has been maturing. In a reversal of O2O, they are expanding into the “new retail” offline market. The mobile karaoke apps have been capitalizing on the popularity of live streaming in China as well as the decline of conventional karaoke venues, many of which have been forced out of business by rising rent and increased competition from online entertainment.
First coined by Jack Ma, “new retail” refers to a new format where internet technology connects and optimizes offline outlets, online stores, and the supply chain. Some of the goals for “new retail” include intelligent self-service, anytime anywhere access, and high efficiency. Following Jack Ma’s vision, Alibaba has started to collaborate with Lianhua supermarket chain owner Bailian Group on optimizing offline stores, online payments and supply chain logistics. Intelligent vending machines and small on-demand karaoke kiosks are examples of this “new retail” model.
The online karaoke space is currently dominated by two players, Chang Ba (唱吧 or “just sing” in English) and Tencent’s Quanminkge (全民k歌 or “national karaoke” in English). Both apps offer users a catalog of songs to sing along and a social function that shares your singing with others. Similar to other live streaming apps, what brings in the cash is a payments system rewarding user generated content that attracts viewership and user engagement.
As the online market is becoming saturated, Chang Ba decided to try the “new retail” offline market. They have partnered up with Guangzhou company Aimyunion Technology, who launched a mini karaoke kiosk called Minik. 10,000 of these have already been placed in shopping malls, public transit stations, and other high foot-traffic spots. The RMB 28,000 cost of each kiosk can be recuperated within three to six months.
“Offline stores can still make a lot of money,” Chang Ba CEO Hua Chen said in an interview (in Chinese). “But they haven’t reached a large enough scale of economy to deliver any returns yet, because we’re still in a fast expansion phase and dedicating a lot of investment.”
Another karaoke app expanding into the offline market is UCM-Bar (友唱M-Bar), which has already installed around 5,000 self-service entertainment units in around 140 Chinese cities. Each unit is estimated to bring in RMB400 per day. It was just announced that UCM-Bar has received an RMB B60 million investment from Ubox, China’s largest internet-enabled vending machine system.