teo heng ktv jackson jean teo
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Back in March 2020, the Singapore government released an advisory, stating that karaoke outlets and other entertainment venues such as nightclubs and bars have to be closed as part of Covid-19 safety management measures.

This ‘drought’ period stretched for slightly over two years, before all nightlife businesses in Singapore, including karaoke outlets, were allowed to resume business from April 19.

In an interview with Vulcan Post then, Jean Teo — the director of Teo Heng KTV, who is also the sister of founder Jackson Teo — shared that it had been a financial struggle due to the past two years of closure. With zero income and many bills to pay, they became “heavily in debt”.

Outlets fully booked since April 2022

Over the years of closure, Teo Heng KTV has had to make the painful decision to close 10 out of its 14 outlets. They were left with only four outlets to its name: Suntec City, Causeway Point, JCube and The Star Vista.

Despite their financial woes, Jean notes that many other karaoke businesses in Singapore weren’t as lucky and had to close down their business for good.

“About 60 per cent [of KTV businesses in Singapore] have already closed because they cannot hold on for so long, [leaving behind] a handful of operators,” she shared in a recent phone interview with Vulcan Post.

While this is unfortunate news for such businesses, it also meant decreased competition for Teo Heng KTV, giving them a better fighting chance to thrive.

In fact, when they reopened for business in April, all of its outlets were often fully booked, especially on weekends. Particularly for its Suntec City outlet, it saw many customers placing advanced bookings that stretch until September, since day one of reopening.

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Teo Heng’s current rental rates / Image Credit: Teo Heng KTV

Ahead of its reopening, Teo Heng had also increased their rental rates by a mere dollar. But did this actually make a sizeable impact in boosting their revenue?

It actually helped us because all the while, we have been absorbing the GST. [Furthermore], GST will also increase by another per cent next year. [In addition], the electrical rates are also increasing. So this [increase] helps us to keep up with our operating costs. Without this [extra revenue], it would be very tough for us to operate.

– Jean Teo, director of Teo Heng KTV

She further assured that they will not further increase the rates. In fact, Teo Heng KTV is resistant towards such changes, because they have been charging such low rates for the past few decades.

“So when we make changes, [it means] we really cannot handle it anymore. We hope our customers can really empathise and understand,” she added.

They still have a long way to go in clearing its debt

Although they have been witnessing such strong demand from customers, the revenue they earned hasn’t been enough to repay all its debt. So far, they have only managed to clear “about 50 per cent” of the eight-figure sum.

Fortunately, we have some backup funds. Our founder Jackson Teo even mortgaged his house to save the business. We also loaned [money] from friends and partners, and also dug out some of our own money, so that at least the major debts are cleared.

– Jean Teo, director of Teo Heng KTV
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Founder Jackson Teo with Teo Heng workers / Image Credit: Teo Heng KTV

“We made sure that we paid all our workers and gave them better incentives to drive them [to do] better,” she said, adding that they offer their workers a small percentage of their total sales turnover, which is something that bigger companies tend to do.

“So the better they perform, then of course they will get more rewards,” explained Jean. Teo Heng currently has a total strength of over 50 employees, up from the initial pool of 32 employees for the past two years, which they had downsized from 120 employees.

Majority of their workers, especially those from Malaysia and China, have since returned to Singapore to continue working for them once the reopening plans have been finalised.

During the business closure, Teo Heng also had to resort to cutting half of their workers’ salaries to keep themselves afloat. They had promised then that they would pay them back the 50 per cent ‘owed’ to their staff once they reopen.

This was a gesture that showed their appreciation towards their staff who have stuck with them through the tough times. In fact, Jean revealed that they have actually increased their salaries by “more than” 50 per cent.

We put our workers first, and also cleared our rental and whatever overheads. Then the rest [of the revenue], we will try to reserve a portion and start to search for new places [to open as a form of] investment.

The market is definitely there, but the only thing is that too few actually want to be a [family-friendly] KTV like us, so we find that the supply is definitely insufficient [to meet the demand]. We hope that we can slowly recover and open up more [outlets] in residential, heartland areas that are nearer to the community.

– Jean Teo, director of Teo Heng KTV

Teo Heng will at least have 10 outlets by next year

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Teo Heng’s Kallang Wave Mall opening / Image Credit: Jackson Teo

Earlier this month, Teo Heng KTV had opened a new outlet at Kallang Wave Mall.

Following this, they will be opening another outlet at White Sands mall by December, and another at The Centrepoint after next year’s Chinese New Year period.

With the closure of its outlets at Tampines Hub, Tampines West CC and E!hub Downtown East, Teo Heng wants to rebuild its presence in the East side of Singapore. Separately, the upcoming The Centrepoint outlet will serve as the company’s new Orchard outlet after the closure of its Rendezvous Hotel outlet.

Another contributing factor as to why they chose these locations also boil down to the landlords.

Frasers has been very helpful to us during the [difficult COVID] period — when we were unable to pay the rentals — and we are very grateful to them. When we told them that we are looking into expansion, they are the ones who suggested White Sands. CapitaLand has helped us a lot too, and [gave us a lot of support for our] JCube outlet.

– Jean Teo, director of Teo Heng KTV

“Hopefully next year, we can open open three or four more [new] outlets,” added Jean. With at least 10 outlets under their belt then, she expects Teo Heng to double their current headcount to at least 100 employees.

In a previous interview with Vulcan Post, Jean revealed that they typically spend half a million dollars when opening one outlet. For one, renovation and application of licenses are not cheap. However, Jean sees this as a “necessary” expense as part of business investment.

What’s next for Teo Heng?

During the recent National Day Rally speech, Prime Minister Lee Hsien Loong first announced the further relaxation of mask requirements in Singapore. As of today (August 29), masks are no longer required in most indoor settings, except for healthcare and public transport spaces.

With this latest adjustment, Teo Heng is now making mask-wearing optional for their customers and will prepare masks at its counters for anyone who wishes to put it on.

Furthermore, Teo Heng has already invested in anti-virus fogging machines, which they imported from Korea for a hefty S$4,500 per unit.

This machine has been placed in every outlet. After a customer leaves a room, Teo Heng employees will continue to use the machine to sanitise the surface areas, which will keep it virus-free for at least four hours.

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Sanitisation is still a key priority at Teo Heng’s outlets / Image Credit: Teo Heng KTV

With the goal to keep the environment safe for its customers, Jean stressed that they will still continue their safe management measures and upkeep sanitisation rounds.

We are all in very high spirits now, especially with the success of our outlet opening at Kallang Wave Mall. It’s like a booster to us because we initially couldn’t see any roads in front of us — we didn’t know when we can reopen, or if we have to further close down our outlets. The COVID period has been really uncertain for us; we didn’t know what’s in store.

But thankfully, with the relaxed COVID measures this year, we can also afford to relax. Customers have been very supportive, and the response has been so good. We will continue to [uphold our positioning] as a beloved, family-friendly karaoke studio in Singapore, and come up with new creative ideas to allow more to have fun.

– Jean Teo, director of Teo Heng KTV

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Vulcan Post aims to be the knowledge hub of Singapore and Malaysia.

© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)