A quiet place to enhance knowledge

Lou Qingxiao, founder of Xinliuzaowu, one of Beijing's earliest study lounge brands that opened in 2018, said their first study lounge near Renmin University of China has already made ends meet even made some profits before the pandemic. But their second franchised study lounge in Beijing was opened just before the outbreak.

And its franchise lounge in Dalian, Liaoning province, was caught in another wave of infection in July, when a majority of Chinese provinces and regions had basically controlled the virus and were on road to economic recovery.

Li Hang and Zhang Yang, co-founders of Sishiloushi, a Beijing-based independent study lounge, say their business is gradually returning to normal, but they still have to "play by ear". Yet, even before the COVID-19 epidemic broke out, the industry's profit model was neither promising nor clear. Li and Zhang say the investor they talked with is unwilling to invest in the industry because, they assume, it's a low-profit sector without many "peripheral profit-making aspects".

"Rentals are a major 'rigid' cost for study lounges, especially in first-tier cities with high housing rentals," Lou says. As such, the fees for using study lounges should be relatively high, not low in the hope of attracting more users, Lou says. Because, as Li says, in a first-tier city such as Beijing, rentals comprise more than a half of a study lounge's monthly operation cost.

According to Lou, the study lounge industry is a result of consumption upgrading that "provides better time and space experience, and helps users to enhance their knowledge and efficiency while saving time". He sounds optimistic about the industry's commercial prospect, though, "because it's a blue ocean with less competition".

Better serving people

Yet Li and Zhang don't consider study lounges to be simple substitutes for public libraries, as the former provide better learning experience that people cannot get in free public libraries. But instead of exploring its commercial aspects, they are looking for opportunities to cooperate with the government. "Privately operated study lounges like ours actually make up for the shortage of public infrastructure and public services, and we are willing to cooperate with the government to better serve the public," Li says.

An increasing number of study lounge operators have realized the significance of differential operations. For example, Qudianliang, a study lounge opened in Wuxi, Jiangsu province, in June which claims to be the first 24-hour study lounge in the city, aims to ride the wave of "night economy" being promoted by the local authorities. "As for the night economy, people's demand is not restricted to leisure and entertainment but also includes the quest for knowledge and spiritual solace", according to Linlang, the study lounge's operator.

Since there is no established profit-making model besides selling time and space, Lou insists it is necessary to explore other "profit-making aspects" after "laying a solid foundation" for the study lounge business. "As long as you have a good reputation and a considerable number of users, profit will come naturally."