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World / Reporter's Journal

Disney in China: Patience is its virtue

By Zhang Yuwei (China Daily USA) Updated: 2014-10-13 11:53

China's current economic growth - even with a slower rate than the past few years - never seems to put off multinational companies' big plans for that market. Every foreign firm wants a China story nowadays, either to tap into the market or to expand their presence in the world's No 2 economy.

While the market is big, promising and, to many, a land of opportunity, the key question for these companies is how to maintain sustainable growth once they set up shop there.

Andy Bird, chairman of Walt Disney International, shared a few of the company's tailored strategies for the Chinese market in a recent business forum in New York.

Bird said one of the important strategies the company has formed for the Chinese market is "relevance to the consumers" there.

This perhaps echoes the strategy of many other firms. American multinationals, ranging from food to clothing brands, make China-themed products just to win customers in there.

But Disney has a more detailed strategy of deciding where in China to go and what to do for that place in particular.

Shanghai will have Disney's first store on the Chinese mainland early next year. The 53,000-square-foot venue - with retail space and a Disney-themed outdoor plaza - will be the largest of the company's 340 stores around the world.

Disney in China: Patience is its virtue

Also in Shanghai, the first Disney theme park - worth $4.4 billion - on the Chinese mainland will open by the end of next year, about 10 years after it opened its Hong Kong theme park.

"If you go to a Disney theme park, it is going to be different from any other theme park in the world," said Bird. "It gives you a different experience."

But Disney's Shanghai focus clearly is to target the growing middle class. By 2022, more than 75 percent of China's urban consumers will earn 60,000 to 229,000 yuan ($9,000 to $34,000) a year, according to consulting firm McKinsey & Company.

High-end aspirational designer stores in cities like Beijing and Shanghai will help tell the Disney story through retail representation, said Bird.

"A decade ago if a mother and daughter went to a Disney store, they were more likely to choose a dress by its color rather than the story behind it," said Bird, adding the story-telling is through focused retail representation in a market.

Another China element that Disney is betting on is the "one child's six pairs of pockets" reality, said Bird. And in China the one child policy would make this "six pairs of pockets" - of the parents and grandparents from both sides - element more unique, and perhaps more in favor of Disney's business.

If the one child with six pairs of pockets is not unique enough for China, Disney certainly has found another element. "You have a lot of grandparents and parents (in China) who want their child to learn the English language," said Bird.

By 2012, Disney had 44 English learning centers in 10 Chinese cities since its first one opened in Shanghai in 2008. The classes, targeting children aged two to 10 with costs between $400 and $1,800 for annual tuition, are taught by native speakers.

With all the big plans set up by Disney in China, Bird said the Chinese market is not without challenges. But for Disney in China, he added, "patience is a great virtue" to be successful there.

Contact the writer at yuweizhang@chinadailyusa.com

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