On February 6th, according to Pencil News, the mini karaoke booth label Mida MiniK’s parent company Aimyunion Technology recently changed its commerce content with 4 new company stockholders — CITIC Capital, DT Capital Partners, Fun City Capital and Wanlian shunze Investment Fund. It means that Mida MiniK has raised finance from all four companies very recently. The registered capital of the company also rose from 12.97 million RMB to 14.73 million RMB. After this round of finance, Chang Ba will own 9.12% of the stock, ranking as the third significant stockholder of Aimyunion Technology.
Aimyunion was officially registered in November 2013 as a technology company that focuses on mobile music device development, including digital music services, music and entertainment device, digital music product HIFI, etc. Besides Mida MiniK, Aimyunion also owns Mida K Show (it’s viewed as the premium version of Mida MiniK which is now attracting investment nationwide), E Dance DDR, etc.
Mida K Show, another product of Aimyunion
As one of the earlier entrepreneurs in the mini karaoke market, Aimyunion started to test the water in 2013. 5 years ago Aimyunion launched the first mini karaoke machine “Sing Word”. However, because the profit did not balance the cost input as expected, the product of “Sing Word” has to be put on hold. In 2014, Aimyunion test launched Mida MiniK on a small scale and put it on the market officially in 2015.
Starting from late 2016, mini karaoke has become a popular area of investment and Mida MiniK has raised a lot of attention from all capitals. On February 22nd, 2017, Chang Ba officially announced a strategic investment to Aimyunion. After raising the finance, Mida MiniK further increased the amount of launched karaoke booth, and further integrated its function with a connection between online and offline scene showing in the karaoke booth. Over this past year, Mida MiniK has taken the lead in the market in terms of market share, brand awareness, and user engagement. According to iimedia’s “White Paper on Mini Karaoke Booth in China 2017”, Mida Mini K was ranked number one compared with all other mini karaoke booth startups with a 38.8% market share, a 7.4/10 user engagement score and a high percent (45%) of active users.
△Data from iiMedia Research
M-Bar and Wow KTV are ranked second and third in the white paper with 33.2% and 12.1% market share. Although there have been many similar brands such as Tangxing mini KTV, EK-Zone, Changlifang KTV, etc., they haven’t been able to replace the high-ranking brands in the mini karaoke booth market.
It is a really remarkable performance of Aimyunion as a mini KTV startup. On one hand, as the flame of the mini KTV industry subsides, the market will normalize like what happened in the bike-share industry. At that point, the mini KTV industry will have a reshuffle between all the mini KTV companies. According to statistics, although there have been a dozen newly launched mini KTV projects, only 5 of them actually raised funds of finance. The reason behind the low ratio of companies receiving finance may due to the fact that most of the mini KTV booths have relatively high price mark, low usage rate and uneven users’ experience between different brands. However, it takes time for the projects to break through its product technology, profit model and to enrich product function. Those projects with finance funding also need to explore and improve their business models and related product functions.
Due to all the factors, most of the competition between the mini karaoke booth labels are and will continue to be focused on their product layouts. But once the market has shifted from first or second-tier cities to third or fourth-tier cities, mini KTV booth may face the problem of high scrap rate. And users may lower their expectation of the industry once they have consumed the novelty they found on these similarly designed mini KTV booths.
On the other hand, as the market for mini KTV growing rapidly, the government is gradually increasing the force of supervision and regulation on mini KTV booths. On July 8th, 2017, the Ministry of Culture in China issued the “Notice of the Ministry of Culture on Healthy Guidance of Mini Karaoke Booth Development”. It emphasized that all the booths need to be filed into a system and be supervised and regulated by a local administrative department of culture and law enforcement. The issue of the notice implicated that the development of the industry will be limited to a certain extent while the government supervises it.
Other than the limiting supervision from the government, piracy is another big problem that the industry needs to face. On April 2nd, 2017, Mida MiniK pressed a charge against 3 other similar companies including M-Bar for these business competitors’ plagiarism of the exterior design. Mide MiniK also made a claim of 160 million RMB. However, this infringement claim was determined as an invalid case by the court due to “failure of completing the application before publishing patent technology”. On January 7th, 2018, Mida MiniK sued another 4 companies including Weigo for copyright infringement and illegal business competition, claiming compensation of over 10 million RMB. Mida MiniK claimed that Weigo’s Lingta MiniK plagiarized the product design of Mida MiniK. Right now the lawsuit is still pending.
△Lingta MiniK Practice Room
With all possible problems and issues, the industry still has high hope on the mini karaoke booth market. According to the white paper, the market size of mini karaoke has reached 3.52 billion RMB in 2017. It predicted that the market will continue to develop rapidly and may reach 14 billion RMB in 2019. Sootoo Research also published similar data to indicate great potential in the mini karaoke market. It predicted that the industry will continue to have high development rate in 2018 and may reach 10 thousand launched mini karaoke booths in China by 2020. In mid-January, Mida MiniK officially announced its brand new slogan “For singing better”, replacing the old slogan “A glass castle for singing”. The new slogan emphasized on the quality of the product rather than on the function. This new action of Mida MiniK may have just pointed out a new direction for all the other mini karaoke startups on how to stand out among all the similar products. Mida MiniK has given an answer. The only way to win a spot in this competitive industry is to continue optimizing the products to bring the customers a better experience and their trust.
Translated by Paris Wu
Copyright © 2015 China Music Business News