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Crowd-funded cafes struggle to survive

By Xu Junqian in Shanghai | China Daily | Updated: 2013-04-22 10:16

"Sitting in front of the computer, against the sunshine in the office, every day, I had always dreamed about serving a cup of coffee to someone in the sunshine, though I barely drink it myself, the notice said and urged like-minded individuals to to start a cafe with 2,000 yuan ($321)," Yu said.

Like a little spark, the posting has served as the ideal tonic for several such cafe start-up ventures.

"We raised 1,000,000 yuan in less than two months, much faster than we expected," said Yu, who, with another two boys, is one of the earliest initiators, and now "chief executives" of the Shanghai cafe, which they named Particle Cafe, because "the universe is made up of small but essential particles, like every shareholder of the cafe".

Covering a two-floor space of 100 square meters in a bustling neighborhood adjoining some office buildings, the cafe is share-held by 43 youngsters who vary in ages from 16 to 28 and have contributed 3,000 yuan to 100,000 yuan to "realize their dreams". Most of them have jobs, or are students, with nothing other than the "glorious cafe boss" title.

"Business has been doing well since we opened in November," said Yu. A cup of coffee is sold at 32 yuan at his dream store.

But in Beijing's Our Cafe, the first such venture, which opened a year earlier than the Shanghai cafe, in a basement, things are not as hunky dory as one would expect.

Some shareholders have exited the project, as it is yet to make a profit. Operating costs have however risen sharply, while the number of customers is constantly fluctuating, especially after the curiosity and novelty of a many people's cafe has faded.

"The best-case scenario is that we will start making money in mid 2014," says Wang Hai, one of the shareholders of the Beijing cafe.

In Xiamen, East China's Fujian province, and Zhongshan, in South China's Guangdong province, the economically most sensitive and competitive areas in the country, the cafe dream is on the brink of being shattered because of the joint efforts.

In Xiamen, the cafe that was co-funded by 80 young people, with minimum individual contributions of 2,000 yuan, the original beautiful garden villa has given way to a restaurant after a year of deficit.

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