Chapter 207 Internet Cafe Competitors
On Monday, Li Quanwang came to school with a cheerful look on his face, and the smile never stopped.
During the break, Lu Yiming laughed and scolded, "Fuck you, what are you doing in the middle of summer?"
Li Quanwang smiled foolishly and boasted proudly, "Gu Zhiruo promised to go to the movies with me on Saturday night, Titanic!"
"Titanic" was released in North America on December 19, 1997 and was introduced to mainland China on April 3, 1998.
Because there are not many Hollywood blockbusters introduced into the mainland, this movie has had a high attendance rate until now and has not been withdrawn, making many young people who have fallen in love with it rush to contribute box office revenue to Cameron.
Li Quanwang declared confidently at this moment: "I will soon be no longer single!"
Lu Yiming was disgusted by this: "You haven't even taken off your pants, how can you be single? Besides, what's the point of going to the cinema?"
Li Quanwang, who was originally quite excited, was immediately confused when he heard this: "What do you mean? Where else can we watch movies if not in the cinema?"
Lu Yiming raised his eyebrows at him, his expression rippling: "Watch it at home, otherwise what are you using that 32-inch Sony wall-mounted TV for? Think about it, the movie theater is messy, crowded, and pitch black, how can it be as comfortable as at home? If it were me, I would buy a VCD player, prepare some red wine and snacks, and the two of us would be in the same room, wouldn't that be nice?"
Li Quanwang's eyes lit up when he heard this, and his heart was moved. However, he was still too shy to do so, and was quite hesitant: "Isn't this a bad idea? I'm afraid Gu Zhiruo won't agree."
Lu Yiming encouraged her, "How do you know if you don't try? Maybe she would love it."
Li Quanwang thought about it and finally made up his mind: "Yes, I will tell her about it next time I meet her."
After school at noon, Lu Yiming went home, while Li Quanwang went to Tongxin Internet Cafe for inspection.
Since Li Quanwang confessed that he was the boss of Tongxin Internet Cafe, the attitudes of Li Changjian and Huang Jijiao have changed a lot. They said in an open-minded manner: We must study hard and not relax in the management of the Internet cafe. We must do both well and do both well.
However, under Lu Yiming's influence, although Li Quanwang worked harder, he no longer had the anxiety of not being able to get into college, and his mentality began to become calmer. But strangely enough, since he stopped paying attention to his grades, his scores in various small tests have actually improved significantly, and he has begun to get out of the bottom of the class.
Therefore, Li Quanwang can devote more time to the management of Tongxin Internet Cafe. Now he rides his newly bought bicycle to visit various Tongxin Internet cafes every noon.
Lu Yiming had just returned home and hadn't even sat down when Li Quanwang called him.
During the call, Li Quanwang sounded very anxious: "Daming, something happened. It's a big deal."
Lu Yiming frowned slightly when he heard this and asked casually, "What happened? Were you kidnapped?"
Li Quanwang shouted exaggeratedly: "It's much more serious than that. Just now, several Internet cafe managers told me that the number of customers has dropped significantly recently. When I asked, I found out that it was because a lot of Internet cafes had sprung up around us, and they directly took away all our customers."
In the early years, there was basically no threshold to opening an Internet cafe model; as long as you had money to buy a computer, you could open one.
Many people see that Tongxin Internet Cafe is doing so well and naturally want to get a piece of the pie.
The key point is that in order to attract customers from Tongxin Internet Cafe, and the fact that computer hardware prices have also dropped in recent months, the Internet fees of these Internet cafes are generally one or two yuan cheaper per hour than those of Tongxin Internet Cafe.
As a result, many people went to these Internet cafes to surf the Internet.
After listening to Li Quanwang's story, Lu Yiming was not panicked, and his tone remained calm: "Our Tongxin Internet Cafe has expanded so high-profile and others are not blind, so they can naturally see the popularity of this industry."
Li Quanwang was unprepared for the emergence of a competitor, but Lu Yiming had anticipated it.
Before 1995, the domestic Internet cafe industry was mainly based on the 3C+T model of China Overseas, which mainly imitated the forms of Taiwan and foreign countries. The price was very expensive, costing about 20 yuan per hour.
The period from 1995 to 1998 was the first peak of the development of Internet cafes. From then on, the Internet was not only used for surfing the Internet, but also began to become a place for gaming.
For example, Tongxin Internet Cafe mainly offers single-player games such as StarCraft, Red Alert and Diablo. The prices are a little cheaper than before, but not much lower, ranging from ten to fifteen yuan per hour.
This stage is basically the period of huge profits for Internet cafes, and they are literally making money by running a money printing machine.
But people all like to follow the powerful. When they see an industry making money, naturally countless people will become jealous and flock to it.
Therefore, during the period from 1998 to the millennium, the number of Internet cafes began to expand rapidly, and large-scale competition within the industry was inevitable.
"So what do we do now?"
Li Quanwang is making a lot of money from the 1% dividend of the Internet cafe's shares. Now that so many competitors have suddenly appeared, he feels very panicked.
Lu Yiming, the major shareholder, was not in a hurry at all. Instead, he said calmly, "What can we do? We can start a price war. If they can lower the price, so can we. Anyway, we have already earned back the money for renting the house and equipment. As long as someone comes online we will make money."
When he heard about the price cut, Li Quanwang was a little unhappy : "Are they really going to cut the price?"
After all, the charge was 15 yuan per hour before . Although members can get discounts, they can also get a free deposit to accelerate the expansion of the Internet cafe, which is really a good profit.
Now they have to lower prices to attract customers, which means they lose money from their own pockets, and no one would be happy about that.
Lu Yiming explained: "This is the case with Internet cafes, which have low barriers to entry. Anyone can do it, so the competition is naturally great. If you don't lower your prices, you'll end up dead."
Hearing that he would die if he didn't lower the price, Li Quanwang compromised and agreed gloomily: "Okay, then how much do you think we should lower the price by?"
Lu Yiming thought about it and came up with an idea: "Let's reduce it to ten yuan per hour first. I estimate that other places are only twelve or thirteen."
"A five-dollar drop all at once? That's too much!"
Li Quanwang calculated in his mind and became even more unhappy.
They gave a 34% discount right away. If they give further discounts later, wouldn’t it be a huge discount?
Lu Yiming recalled the days in 2006 and 2007 when he paid 5 yuan for an all-night internet access and 50 cents an hour in the morning. He smiled bitterly and said, "We are just getting started. I estimate that within a year or two, the internet fee will drop to less than 4 yuan an hour. In some places, even 1 or 2 yuan an hour is not uncommon."
When Li Quanwang heard this, he was shocked: "One or two dollars an hour? How can I make money with this?"
Lu Yiming sighed calmly, "Internet cafes are a sunset industry. Do you still want to make a living from it? While I can still make money now, I will continue to increase the subsequent recharge discounts. I will make as much as I can during this period. There will basically be no such good thing as lying down and counting money in the future."
