Rebirth 04: Starting from Taking an Unconventional Approach

At 2:55 p.m., the sun began to travel along the lower half of its parabola, and its shadow slowly extended toward an abandoned school campus in the Z North District. The only sound in the school was the monotonous sound of a soccer ball being kicked against the wall.

Han Fei and Zhang Ruiyi stood in front of the publishing house, watching a black Audi minivan slowly drive up and stop beside them. The black windows rolled down silently, and cigarette smoke drifted out from the upper edge of the window frame, rising gently in the sunlight.

Han Fei heard the last syllable of laughter, followed by a calm voice.

"President Han," Ma Yongxing turned around, flicking his cigarette ash out of the car, "would you like to take this pretty lady with you? Get in the car."

Han Fei and Zhang Ruiyi got into the back seat. The car was so spacious it was like a small conference room, and the leather seats gave off a faint leather smell. Han Fei, sitting behind the driver, could see the elephant's bald head perfectly.

"Where shall we begin, President Han?" Ma Yongxing handed Han Fei a cigarette from the passenger seat without turning his head.

"Let's go to the nearest karaoke bar," Han Fei said, taking the cigarette.

The elephant stepped on the gas, and the car drove forward.

Han Fei lowered the car window slightly, lit a cigarette, and a faint whistling sound filled the car.

The car drove away from the bustling city center, heading further and further out, until it arrived at an industrial park converted from old factory buildings. The sign at the entrance of the park read "Golden Splendor KTV," and the neon lights looked dim in the afternoon sun.

Ma Yongxing stayed in the car. Han Fei and Zhang Ruiyi followed the elephant into the KTV.

The lobby's decor lived up to its name, and just as Han Fei had predicted, it was opulent to the point of being gaudy. Crystal chandeliers, gold wallpaper, red carpets—everywhere exuded an overzealous sense of wealth. A woman in uniform at the front desk was eating sunflower seeds when she saw Elephant enter and hurriedly stood up.

"Where's the manager?" the elephant asked.

"In...in the office," the woman stammered.

They arrived at the office door, where a thin man in an inexpensive suit ran out to greet them with a fawning smile: "Brother Elephant, you've arrived! And these two are...?"

"Mr. Horse's guests," said the elephant. "Let's show them around."

The manager immediately turned to Han Fei and Zhang Ruiyi, and said in an unusually enthusiastic tone, "Distinguished guests, this way please! We have thirty-eight private rooms here, the largest of which can seat twenty people. The sound system is imported, and the drinks..."

"Let's look at the data first," Han Fei interrupted him.

The manager's smile froze on his face, and he looked at the elephant with a bewildered expression, as if asking for help. The elephant nodded.

The manager and the elephant walked ahead, leading them into the office. It looked like a small circus parade, with a burly man and a dwarf as the main characters.

The manager pulled an account book from a drawer and then opened the computer to display a spreadsheet. Han Fei sat down, and Zhang Ruiyi stood behind him as they looked at the documents together.

"That's pretty much what I guessed," Han Fei said. "The occupancy rate is okay on weekends, but it's abysmal on weekdays. Alcohol sales account for too high a percentage, and the fees for private rooms are almost negligible. Our customer base is heavily reliant on business banquets; we basically have no young people."

The manager blinked, his mouth slightly agape, stunned as he listened: "VIP, you...?"

"Let's go to the bathhouse."

Han Fei and Zhang Ruiyi quickly walked past the two astonished circus members, left the room, and disappeared down the corridor with firm steps.

"So fast?" Ma Yongxing looked at the two people who had returned to the car with a suspicious expression.

"I understand the situation here; the problem is quite typical," Han Fei said. "Let's go, I'll tell you everything after we've seen the bathhouse."

"uh-huh?"

The Audi drove onto the elevated highway, traversed a large part of Shanghai, and finally stopped on an inconspicuous roadside in the Hongqiao area.

Han Fei looked out the window and saw swallows flying in flocks in search of food, dividing the pale blue sky. Below was an antique-style building with upturned eaves and corners. Large red lanterns hung on both sides of the gate, and three gilded characters were written on the plaque above the gate: Biyue.

"Is this Mr. Ma's bathhouse?" Han Fei asked.

"Yes, it's been open for three years," Ma Yongxing said. "This is the worst-performing business."

Han Fei nodded: "Then we'll go in and experience it as ordinary guests first. You guys find a place to wait."

"Oh?" Ma Yongxing looked at him meaningfully. "Why do you need to experience it this time?"

Zhang Ruiyi glanced at Ma Yongxing with sharp eyes.

Han Fei chuckled lightly: "Don't worry, I'm not looking to have some fun. The problem with KTVs mainly lies in their business strategy. Whether business is good or bad can be determined by looking at the number of private rooms, the drink menu, and the table turnover rate. Once you look at these numbers, the problems will basically come to light. But the problem with bathhouses is more about the user experience. To cure it, I have to personally experience it from beginning to end to find out where the root of the problem really lies."

Ma Yongxing raised his eyebrows in surprise, then smiled and said, "Alright, President Han. I'll be waiting for you in the tea room on the second floor of the bathhouse."

Han Fei and Zhang Ruiyi opened the car door and got out, walking towards the bathhouse.

"This doesn't look like a bathhouse at all!" Zhang Ruiyi covered her eyebrows with her hand and looked towards the entrance. "It's clearly a retirement home for senior citizens."

Han Fei laughed heartily: "You really hit the nail on the head. This shows that the positioning here is vague. They want to take a high-end and elegant route, but they can't bear to give up that magnificent feeling. As a result, they end up not getting anywhere."

The security guards were a bit lax. Two men in uniforms were chatting by the entrance of the bathhouse. They glanced up and saw a well-dressed young couple walking towards the entrance. Seemingly thinking they were harmless, they turned back to their conversation.

Han Fei and Zhang Ruiyi stepped through the spring door, and a pungent smell of disinfectant and cheap air freshener hit them.

Han Fei frowned: "Can you smell it? This smell immediately lowers the class of the place as soon as you walk in. A truly good bathhouse should have no scent, or just a faint essential oil fragrance. This kind of aromatherapy seems to be deliberately used to cover something up."

Zhang Ruiyi wrinkled her nose: "It really is. How do you know everything?"

As they entered the lobby, Han Fei looked around and suspected that the renovations here were done by the same construction team as the previous KTV.

Two women in cheongsams processed their paperwork at the counter.

They received their name tags and then went their separate ways.

"Don't wander off, see you in the rest area later," Zhang Ruiyi said.

"OK," Han Fei said, striding into the locker room.

The changing room wasn't large, with two rows of metal lockers on either side. Some locker doors were crooked, and some locks were clearly broken, held together by a wire. A non-slip mat was laid on the floor, but dark, grimy water had accumulated in the gaps. Han Fei pushed the mat with his foot, and a sour, rotten smell wafted out. He looked at the exhaust fan on the ceiling, which was whirring hysterically, but it didn't seem to be removing much air.

Han Fei changed into slippers and continued walking into the bathing area without taking off his clothes.

There weren't many people inside. Less than half of the twenty-odd showerheads were on. At the far end of the room were three soaking tubs with different water temperatures. There was puddles on the ground around the tubs, and no anti-slip mats were provided.

His gaze swept across the hot tub area, where several guests were soaking in the water, some with their eyes closed in rest, others chatting quietly. In Han Fei's opinion, none of them seemed to be enjoying themselves.

Han Fei quickly circled around and then turned to leave.

The lounge is a huge space, at least 300 square meters, with dozens of deck chairs, but two-thirds of them are empty.

Before entering, Han Fei heard various noises coming from inside, and thought he had come to a vegetable market.

Upon entering, he discovered that part of the noise was coming from a television playing martial arts films; it was the only television in the living room.

Another group came from a waitress who was moving between rows of lounge chairs, calling out, "Foot massage, massage, pedicure, anyone need one?" She walked towards Han Fei, who immediately smiled and raised one hand in a gesture of refusal.

Han Fei sat down in an empty seat directly opposite the women's section and glanced at his watch. An elderly man lay beside him, tossing and turning in his recliner. A woman carrying a child passed by him, hurrying towards the corridor. The child was making a ruckus, screaming, which drew reproachful glances from two men talking in the corridor.

Two minutes later, Zhang Ruiyi came out of the small door in the women's area and sat down next to Han Fei.

"How is it?" Han Fei asked.

Zhang Ruiyi shook her head, a look of disgust on her face, and counted on her fingers, saying, "There's no hairdryer on the vanity, the skincare products are off-brand, the comb isn't clean, and the dressing room smells musty. I came out without doing anything. What about yours?"

"Yeah, it's similar to your situation," Han Fei said, standing up. "Let's go, we need to get his diagnosis."

They went up to the second floor and found the tea room.

There were three people in the tea room. Elephant sat motionless on a chair by the door. Ma Yongxing was brewing tea behind the tea table, while a man in a suit stood beside him with his head down.

"How about it, you two? What's so special about my Biyue Tea House?" Ma Yongxing placed two teacups on the opposite side of the tea table and poured tea.

Han Fei and Zhang Ruiyi sat down opposite each other at the tea table and accepted the tea offered by Ma Yongxing.

"We need to take another look at the ledgers," Han Fei said.

Ma Yongxing waved to the man next to him: "Go and get the account books."

The man nodded and left, glancing quickly at Han Fei before turning away.

In less than a minute, the man brought over a thick folder and placed it on the table.

Ma Yongxing pushed the data in front of Han Fei: "These are the operating data for the first half of this year. President Han, please take a look."

Han Fei opened the account book and quickly browsed through it.

Average daily visitor count: around 350 people, reaching 600 on weekends.

Average spending per person: 82 yuan.

Revenue structure: Tickets account for 60%, massage and foot therapy 25%, food and beverage 10%, and others 5%.

Membership prepaid cards: 2300 cards issued, with an activity rate of 28%.

Repeat visit rate: 35%.

Han Fei closed the ledger, pondered for a moment, and then said, "Mr. Ma, the biggest problem with your Biyueyao is not its hardware, but its positioning."

"position?"

"You've crammed everyone into the same space," Han Fei said. "The same service, the same price. The result is nobody's satisfied. I observed for less than ten minutes and saw three typical examples. A mother with a child was given the cold shoulder and left because her child was noisy; two business travelers who wanted to talk had to stand and chat in the corridor; an elderly person who wanted to sleep was woken up and sighed. Will these people come back after they leave?"

Ma Yongxing put a finger to his lips, seemingly deep in thought: "Go on."

"Your facilities also have many problems. The changing rooms are damp, the exhaust fans are too old, the hot tub floor is wet and there are no anti-slip mats, and there is noise pollution in the lounge... Taken individually, each of these are minor issues, but together they are reasons why guests don't come."

"Yes, and another thing," Zhang Ruiyi added, "the women's dressing table doesn't have a hairdryer, the skincare products are off-brand, and the combs aren't clean. These are details, but female guests will care a lot about them."

Ma Yongxing was silent for a moment, then looked at the man beside him: "Are you aware of what those two are saying?"

The man twisted his hands together and swallowed hard. "I...I know a little."

"Do you know why you don't change it?"

A moment of silence.

Ma Yongxing sighed and looked at Han Fei: "President Han, since you can see the problem, you must have a solution. Tell me."

Han Fei took a sip of tea and said, "First, let's divide the rest area into functional zones. We don't need to make any major changes; simple partitions with screens or greenery will suffice. Divide it into three areas: a quiet zone, a movie/TV zone, and a social zone. Each zone will be independent and can serve its own needs."

Ma Yongxing nodded: "That's easy."

"Next, replace those outdated facilities. Also, improve the catering. Right now, your own catering business is costly and expensive. My suggestion is to cooperate with well-known restaurants in the area. Since you don't have to bear the costs, even if you only take a 20% cut, it will still increase your income."

"Hmm, that's a good idea."

"Then we'll revamp the system, changing the pricing to different times of day. From 9 am to 5 pm, tickets will be 40% off to attract retirees or freelancers. They have flexible hours and are price-sensitive; they're free during the day anyway, so they're willing to come when there's a discount. During prime evening hours, the prices will be normal, ensuring we make the same amount of money. Regarding the membership system, your current prepaid cards are a bit rigid. We can change it to a points system: 1 point for every 1 yuan spent, 500 points for a free ticket, and 1000 points for a massage service. We'll also set up a members-only rest area—it doesn't need to be large, but the environment should be nice, and only members can enter, giving them a sense of exclusivity."

Ma Yongxing leaned forward, slowly nodded, and intently licked his lips. The man in the suit just stared at Han Fei in disbelief.

"Then there are value-added service packages, such as business packages, which include private lounges, tea, and light meals, specifically for guests who want to conduct business. We can also offer a family package, which includes a children's play area, family bathrobes, and children's meals. This will give different people different options. I remember Mr. Ma owns more than one bathhouse, right?"

"That's right!" Ma Yongxing said immediately, "There are three KTVs, three bathhouses, and two nightclubs."

"Then differentiate your business," Han Fei said. "Choose one shop as a high-end business bathhouse, with sophisticated decor and impeccable service, suitable for business meetings. Then choose another to be a family-friendly water park, adding children's facilities and targeting families. Differentiate your offerings and attract different customers, instead of all shops being the same. Uh, it would be best to introduce some themed events, such as a Ladies' Night every Wednesday with half-price tickets for women to attract female customers. Or, on the last week of each month, have a retro disco night with 80s songs to evoke memories for middle-aged and elderly customers. These are all low-cost, high-engagement strategies."

Then Han Fei went on to explain the scene segmentation method for KTVs.

After listening, Ma Yongxing remained silent for a long time, then leaned back in his chair and let out a long breath, as if he had suddenly realized something. Then he stood up and paced around the room, nodding slowly.

The man in the suit frowned deeply, his expression a mixture of surprise and discouragement.

Zhang Ruiyi nudged Han Fei's arm and gave him a big smile.

Finally, Ma Yongxing walked to the window, turned his back to Han Fei, and said, "President Han, I, Ma Yongxing, have been in this business for over thirty years and have met many people. Some are smart, some are capable, and some are daring, but I have never seen anyone like you who can think things through so thoroughly."

He turned around, gazed at Han Fei, and smiled sincerely: "President Han, you've really opened my eyes this afternoon. Don't rush off tonight, I'll treat you to dinner, and then I'll take you to see my nightclub."

Han Fei looked at Zhang Ruiyi with a questioning gaze. Zhang Ruiyi smiled and nodded.

"Then I shall respectfully comply," Han Fei said.