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Basic economics should be supply down, demand up, price will definitely go up and should apply to China also.
How do we know the demand is down now in CP?
Think the demand is still there and due to inflation if the price is not up how the KTV attract more MMs to work or recruit more new MMs to work in this line?
Cheers
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Demand in general is down in CP this year - PZL is hard business now, KTV not always full except some KTVs on weekends, you also see Canton Fair also not full house like last year.
Supply hard to say up, I think over the last year, because of decreasing demand, and the poor business analysis of the KTV managers, the gals are actually earning less than they did over the last few years - at least this is feedback I got, maybe they lie to me. So the gals who are good quality might have found sugar daddies, or moved to Shanghai and BJ, I know some gals who were 5-15-20 now become catwalk models in other cities. In general if they are good quality they can find other jobs.
What is left is the poorer quality ones, whose other alternative is working in factory or massage place or flowershop earning 2000-4000 RMB/month. Working in a KTV earning between 10,000 and 15,000 is a much better option.
The price increase in KTV is not caused by inflation. What is occurring is that KTV owners are unwilling to cut their own profit to sustain a business and want to milk and kill their cash cow. So what they do is raise the prices across the bar because it doesn't hurt them to do so and attract gals.
Chinese business practices a bit strange. For example if business fall, what Chinese business try to do is to raise the prices to recoup the loss in revenue. Of course this chases off their loyal customers but it's never very far-sighted.