As Shanghai's Magic Kingdom turns one, Disney pushes further into China
A woman wearing Mickey Mouse ears watches the opening ceremony at Shanghai Disney Resort in Shanghai, China, June 16, 2016. REUTERS/Aly Song/File Photo

As Shanghai’s Magic Kingdom turns one, Disney pushes further into China

SHANGHAI — Walt Disney celebrates the first anniversary of its $5.5 billion theme park in Shanghai on Friday, a key plank of the entertainment giant’s push into the world’s second-largest economy through everything from English schools to films.

China matters for Mickey Mouse’s owner: its box office takings there have tripled over the last two years and Shanghai Disneyland has seen more than 10 million guests in its first year, setting it on track for faster profits than Disney reaped from parks in Paris and Hong Kong, both loss-making for most of the years they have been open.

The company was “extraordinarily encouraged” by the number of guests who visited Shanghai Disneyland and the satisfaction scores it received, Bob Chapek, head of parks and resorts, told reporters.

“I think those are the sort of right precursors, if you will, for future development,” he said when asked about expansion plans.

“We’re very encouraged by what we’ve seen.”

Disney released 10 films in China last year, including “Zootopia” and “Star Wars: The Force Awakens” with ticket sales of about $1 billion, according to box office tracker EntGroup. That was up from four films and $313 million in 2014.

Last month, it rolled out the red carpet in Shanghai for a rare world premiere of the latest film in its “Pirates of the Caribbean” franchise. Stars Johnny Depp, Orlando Bloom and Javier Bardem made an appearance.

It has also been tying up with partners like state-backed producer Shanghai Film Group, its digital subsidiary BesTV for online content, and Shanghai Shendi, its partner for Shanghai.

Now, for the first anniversary of the Shanghai park, it will celebrate Disney-style, with lights, fireworks and visits by executives including Chapek and Chief Executive Bob Iger.

Chapek said their hotels at Shanghai Disneyland had hosted almost 750,000 people and had maintained occupancy levels significantly higher than the overall market.

Guests were also spending more time at the park than anticipated, averaging about nine hours, he said.


But along with the hotel rooms and rides, Disney is pursuing a steadier path to build brand and profit in downtown classrooms in six Chinese cities, where children study English with the help of Winnie the Pooh and Captain America.

“With the theme park, films, co-productions, Disney English and retail, they’re creating an ecosystem to bring consumers in and foster a broader buzz and awareness,” said Ben Cavender, Shanghai-based principal at China Market Research Group.

“The aim is to recreate that feeling in the U.S. where you have multiple generations who know the characters and cartoons.”

Disney said China was a strategically important market.

“Not only is it home to Shanghai Disney Resort, our largest ever foreign investment, but it has a thriving studio, consumer products and media distribution business,” it said in a statement.

Disney is hiring for schools in cities including Beijing, Shenzhen, Chengdu and Shanghai – all decorated with Disney characters and motifs.

It has not all been plain sailing. Disney was forced to launch an investigation this year after an employee was found to have set up firms which made deals with local authorities using the Disney name.

Local children are also more used to Asian cartoon heroes, while Disney faces caps on imported films, partial bans on foreign cartoons on TV and long-established domestic theme park rivals.

However, for 7-year-old Sunny Sun who has been attending classes once a week at Disney English for the past two years, Disney characters are now familiar.

Her mother, freelance writer Happy Chen, plans to take her to the Shanghai park this summer, and says her daughter goes to almost every new Disney animation at the cinema.

“Now she really yearns to go to the Disney park,” said Chen, pointing to the crossover between the classes, films, characters and the theme park.

“It’s all connected.”


(Reporting by Adam Jourdan; Additional reporting by Brenda Goh and SHANGHAI newsroom; Editing by Clara Ferreira-Marques and Chris Cushing)

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