As Shanghai Disney Resort ‘soft opening’ creates substantial buzz locally, one of China’s richest men, Wang Jianlin has issued a very open challenge to the global entertainment giant. This is more than a bit of cross-cultural billionaire bravado – it is a fascinating litmus test as to how China’s increasing middle class engages with Western vs. Chinese entertainment experiences.
Wang told Chinese television last week, that “Disney should not have come to China” and that “they will price themselves out of the local market”. His belief in the weaknesses of the American giant’s China plans, is behind his company’s investment in their own theme park empire to coincide with Disney’s June opening in Shanghai.
In the interview, he spelled out the rivalry as ““One tiger is no match for a pack of wolves … Shanghai has one Disney, while Wanda, across the nation, will open 15 to 20.”
The Wanda-ization of Disney, China Style
Wanda Group is no small fish – it is now the world’s largest cinema operator, after acquiring Legendary Entertainment for US$3.5 billion earlier this year. Personally, Wang is posited as China’s richest, alongside Aligroup’s founder Jack Ma.
Wanda has launched its own cultural theme-park project based on “Chinese culture”, with the first of an initial wave of parks opened last week in the capital city of Jiangxi province, Nanchang. The 20-billion-yuan “Wanda Cultural Tourism City” is located 15km outside of the city, at Jiulonghu, a new development zone. Nanchang is located South-West of Shanghai, and can be reached in fours hours via new high speed trains.
At the opening of “Wanda Cultural Tourism City” in Nanchang, Wang announced his intention in the following terms, “The mission of Wanda is to build China’s cultural brand in the world, expanding its influence and say … this Wanda City is the first step!”.
Nanchang’s Wanda City is the first of at least eight parks that Wanda Group hopes will transform it from the country’s largest private property developer and cinema chain operator into the world’s biggest entertainment and tourism company. Future sites include a number of emerging ‘second tier’ cities such as Hefei, Harbin, Wuxi, Chengdu and Guilin.
Wang has stated openly that the development is structured to fit local governments’ development plans, suggesting that numerous tax and concessions are likely to be provided to Wanda in these ventures – passing on substantial savings in terms of construction.
For example, Disney Resort in Shanghai is estimated to have cost US$5.5 billion. While Wanda City, of a similar size, only cost an estimated US$3.5 billion. In this context, Wang has ‘baited’ Disney, by saying they can only recover this cost by ‘overcharging’ locals. To reinforce this perception, tickets to Wanda-land in Nanchang are comparatively affordable at 198 RMB on normal days and 248 RMB on holidays and weekends.
So, should Disney be shaking in their Mickey boots, about their China plans becoming ‘Wanda-lized’
Having had the pleasure of completing the foundation research with the Disney team before permission was given to by the Shanghai City government, I feel that Wang ‘bravado’ may not be particularly well placed.
Disney holds a particularly special place in the hearts of Chinese consumers, as one of the first foreign media brands to feature on Chinese television – with the “Mickey and Donald” show featuring as early as the early 1980s on state broadcaster CCTV – quite simply, as the focus groups with families at the time attested, Chinese have a very special connection with the Disney brand.
Fast forward this reality to 2016, the key challenge for Disney is to create an ‘exemplar’ experience, that simply is unmatchable for competitors in China. While Wanda City boosts of cheaper prices and being more ‘local’, it feels they may be short on the ‘magic’ required to gain top dollar and that ultimate ‘family photo’ that sits ‘pride of place’ on the local ‘mantlepieces’.
They key value Wanda City might be missing is the ‘power of story telling’. The cultural conversation they are basing this ‘Disney hunt’ upon is based on privilege based on by local developers and local governments, as well as a political ‘roll of the dice’ that China’s increasingly conservative political climate, will some how mean Mickey and friends will fall out of favour.
However my own personal prediction comes from my memories of Beijing in the early 1990s where I noticed a litany of ‘abandoned’ theme park left to rust, after a prediction that this was a new buoyant behaviour of the then ‘newly rich’ in China. It seems a similar logic is being assumed in this instance as well.
Quite possibly Wanda is more reliant on Disney’s success rather than its failure.
Look out for our SMART@Resonance 2ND TIER CITY PROFILE –
NANCHANG, JIANGXI later this week