Core Viewpoint - The KTV industry in China is facing significant challenges, with a closure rate exceeding 70% and total revenue shrinking by 62.5% from 2014 to 2023, while Star Party KTV is expanding and entering the Japanese market, viewing overseas expansion as essential for growth [6][7][8]. Industry Overview - The number of KTV outlets in China has decreased from 120,000 in 2014 to less than 40,000 by 2024, with total industry revenue dropping to 15 billion yuan [6]. - The demographic shift in KTV consumers shows a decline in the 18-35 age group from 78% in 2015 to 28% in 2023, while the 60+ age group increased from 5% to 35% [6]. - Japan's KTV market is valued at approximately 214 billion yuan in 2023, with about 110,000 dedicated KTV venues [7]. Market Dynamics in Japan - The offline economy in Japan remains robust, with minimal impact from online alternatives, and KTV brands continue to open new locations [8][9]. - Socializing after work is crucial for Japanese professionals, contributing to the sustained popularity of KTV venues [9][10]. - The high incidence of depression and suicide in Japan has created a demand for stress relief, positioning KTV as a preferred outlet [10]. Star Party KTV's Strategy - Star Party KTV aims to differentiate itself in Japan by not merely replicating local brands but by creating a "new species" of KTV that targets higher-end consumers [14][17]. - The company plans to offer unique experiences such as birthday packages, business meeting venues, and a blend of singing and dancing to attract higher spending customers [18][19][20]. Operational Adjustments - Star Party KTV is enhancing its service model by providing modern facilities, improved customer service, and a more engaging atmosphere compared to traditional Japanese KTVs [21][22]. - The marketing strategy will leverage online platforms like Instagram and Facebook, moving away from traditional offline methods [22][23]. Localization Efforts - The company has localized its team structure, with 80% of employees being Japanese, to reduce cross-cultural communication barriers [26]. - Star Party KTV has adapted its pricing strategy to accommodate both Chinese and Japanese consumer preferences, implementing a per-person pricing model [29]. Cost Considerations - Entering the Japanese market involves high costs, with renovation expenses being five times higher than in China and significant initial rental deposits required [34][35]. - The company is addressing the challenges of securing property in Japan by partnering with established local firms to enhance credibility in negotiations [35]. Future Expansion Plans - Star Party KTV aims to open 300 overseas locations within three years, with plans to expand into markets like Malaysia and Indonesia, and potentially into Europe and the U.S. [35].

Core Insights - The KTV industry in China is facing significant challenges, with a closure rate exceeding 70% and total revenue shrinking by 62.5% from 2014 to 2023, dropping to 15 billion yuan [1] - Star Party KTV stands out as a successful player, with nearly 1,000 locations and no closures due to losses, projecting total revenue of 3 billion yuan by 2025 [1] - The demographic shift in KTV consumers shows a decline in the 18-35 age group from 78% in 2015 to 28% in 2023, while the 60+ age group increased from 5% to 35% [1] Industry Overview - The KTV market in Japan is robust, with a total market size of 443 billion yen (approximately 21.4 billion yuan) in 2023, including around 110,000 dedicated KTV venues [2] - Post-pandemic, the Japanese KTV industry is experiencing a rebound, entering a phase of double-digit growth [2][3] - The traditional KTV brands in Japan continue to open new locations, indicating a healthy competitive environment [3] Market Entry Strategy - Star Party KTV has entered the Japanese market, recognizing the necessity for Chinese companies to expand overseas as the domestic market matures [2] - The company aims to differentiate itself by not merely imitating local brands but creating a "new species" of KTV that caters to higher-end consumers [6][7] - Star Party KTV plans to create three key consumption scenarios: birthday parties, business meetings, and a combination of singing and dancing [8][9] Operational Adjustments - The company is focusing on modernizing the KTV experience in Japan, offering better facilities and service compared to traditional models [10][11] - Star Party KTV is implementing a localized pricing strategy to accommodate both Chinese and Japanese consumer preferences [17] - The company is also investing heavily in its first store in Japan, with an initial investment of 20 million yuan for a 400 square meter location, reflecting the high costs of entry [19][20] Future Expansion Plans - Star Party KTV aims to open 300 overseas locations within three years, with plans for expansion into markets like Malaysia and Indonesia, and potential interest in the European and American markets [21]

Core Viewpoint - The article discusses the expansion of Chinese KTV brands into international markets, particularly Japan, highlighting the unique challenges and opportunities they face in adapting their business models to local consumer preferences and market conditions [3][4][6]. Group 1: Market Expansion - Chinese KTV brand "Xingjuhui" opened its first overseas store in Shibuya, Tokyo, with an investment of over 20 million RMB and a goal to create a significant brand presence [4]. - The KTV industry in China has seen a decline from around 200,000 establishments in 2010 to approximately 30,000 by 2022, largely due to the rise of online entertainment and the impact of the pandemic [7][8]. - The strategy for international expansion includes targeting markets like Japan, Southeast Asia, and Australia, with a focus on smaller store formats in urban areas [5][12]. Group 2: Competitive Landscape - The new generation of KTV brands has shifted from large venues to smaller, more efficient store formats, allowing for quicker expansion and lower investment risks [9][13]. - The competitive edge for these brands lies in their ability to innovate with technology, such as AI sound systems, and to offer diverse entertainment options beyond traditional KTV [13][14]. - The Japanese KTV market, valued at approximately 214 billion RMB in 2023, presents a viable opportunity for Chinese brands due to the existing consumer habits around KTV [15][18]. Group 3: Local Adaptation - The Japanese KTV market is characterized by a lack of innovation, which presents an opportunity for Chinese brands to introduce modernized services and decor [18][22]. - Xingjuhui aims to attract both local Japanese consumers and overseas Chinese, offering tailored services such as a dual-language song selection system [29][30]. - The pricing strategy for Xingjuhui is positioned slightly above local competitors, aiming to provide a higher quality experience while maintaining affordability [21][22]. Group 4: Future Prospects - The company plans to open more stores in Japan, focusing on securing prime locations, which involves navigating the complexities of local real estate practices [33]. - The success of Xingjuhui in Japan will depend on its ability to build brand recognition and adapt to local consumer behaviors, particularly among business professionals and local students [27][28].