By Joe Palumbo
In today’s world, not even cafés are exempt from the advance of high-tech.
For Queens, add the Internet Café to the slate. It's a place where one could sip coffee and surf the World Wide Web. So what's the target for this market? Are these locations just seeking the basic on-line customer or should the sophisticated client be sought whose fancy is state-of-the-art software and the very latest in video games? For these and other answers I spoke with Weixi You of U.Net Internet Café at 43-02 Main St. in Flushing.
Rumors on the street say that this is a struggling business. If so, that's not the impression I got when visiting. The place was thriving with seats scarce.
Weixi said business is doing well though profit margins are tight. Those who do use the café pay $2 an hour with a special rate of 33 hours for $50. This rate includes unlimited free soft drinks. While at the café, I was quite surprised at seeing about 40 computers with all occupied except two. The atmosphere was noisy but not disorderly. The kids who were there seemed to be having fun and away from the dangers of the street.
Weixi says business is a 50/50 split of adults and kids. Weixi also said the kids come mainly for the games but adults come for printing, Internet access and writing resumes. Are these cafés here to stay? If so, they may have to offer advantages to make it worthwhile to leave home, considering the ever-growing numbers of home computers.
There has to be a real reason to leave the comfort of home for a public café. And from what I observed, the key to success is not computers but people. It could be that people come to a computer place for the same reason people go to a bar. Human contact.
Yes the home-based PC total is growing but the human desire to be with people is still very much alive. The Internet café danger is not the ever-growing number of cell phones and hand devices. The upcoming pitfall is the likes of Starbucks, for example. Starbucks is now offering Internet access that appears to be catching on.
So how's business for the local Internet cafés? Although it appears to be a well-established niche, unless its extremely tight profit margin is successfully adjusted analytically speaking, this business must be considered very high risk in the forthcoming years.
Joe Palumbo is the fund manager for The Palco Group, Inc. and can be reached at palcogroup@aol.com or 718 461 8317.
