The encyclopedia · Strategy & Leadership · Operational decision · 2001–2015
Cash Box ruled Beijing KTV for a decade — one store left of four
Cash Box ran four Beijing KTV megastores at its peak; after the 2015 closure of its flagship Chaoyang store, only the Huixin Xijie location remained.
Cash Box · 钱柜 · 2015-02
What happened
钱柜 (Cash Box) entered Beijing in 2001 and defined the city's KTV era: megastores with private rooms and all-you-can-eat buffets, four Beijing locations at its peak — Chaoyang, Huixin Xijie, Shouti and Yonghegong — and eighteen across the country. In its best years the Chaoyang flagship drew 700,000 to 800,000 visits a month.
The turn came with a 2008 change of management model: the chain dropped the buffet that had been its signature. 'The buffet was removed, but business has been declining ever since,' executive general manager Wang Quan admitted. Chaoyang's footfall slid to 200,000–300,000 visits a month, while rent rose more than 30 percent in a few years and labour costs more than tripled.
Group-buying apps were meanwhile selling KTV rooms at deep discounts, and the megastore model stopped paying. The Shouti and Yonghegong stores closed within two years; on 1 February 2015 the Chaoyang flagship's lease expired and was not renewed. One store of four remained in Beijing.
Why it happened
- Cutting the buffet in 2008 removed the experience customers came for, and traffic fell from then on.
- Rent up more than 30% and labour costs more than tripled against a fixed premium-price model.
- Group-buying apps sold KTV rooms cheaply; a premium megastore could not justify its prices.
The lesson
钱柜 cut the buffet that defined it in 2008 and traffic declined ever after; when the lease expired in 2015, Beijing's defining KTV chain kept one store of four.
Aftermath
The Huixin Xijie store carried on alone, and China's KTV centre of gravity moved to app-booked rooms and mini KTV booths.
Sources
- 中国日报 (China Daily), 2015-01-30 — 朝阳门钱柜KTV将于2月1日闭店 (Chaoyangmen Cash Box closing 1 February 2015 when its lease expired; entered Beijing in 2001 and was once 'the most popular KTV in Beijing'; four Beijing stores at peak — Chaoyang, Huixin Xijie, Shouti and Yonghegong — with 18 nationwide; Shouti and Yonghegong stores closed within the last two years; only Huixin Xijie left after the closure; executive GM Wang Quan: business declined after the buffet was dropped in the 2008 management-model change; online group-buying selling cheap KTV coupons as competition)
- 第一财经 (Yicai) — 钱柜衰败调查 (Chaoyang store opened 2001; peak monthly footfall 700,000–800,000 visits, later 200,000–300,000; rent rose more than 30% in a few years and labour costs more than tripled; buffet dropped after 2008 management change; Cash Box had 18 KTV stores nationally)
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