Clash of the theme parks in China

SHANGHAI • Chinese billionaire Wang Jianlin, whose Dalian Wanda Group is in the midst of launching a chain of theme parks and entertainment complexes around China, has taken aim at rival Walt Disney Co, ahead of the Magic Kingdom's opening next month in Shanghai.

In an appearance on a China Central Television show, which aired on Sunday, Mr Wang said Disney "should not have come to China" and Wanda aims to surpass the rival entertainment company as the world's largest tourism company by 2020. 

The chairman and founder will preside over the opening this weekend of a Wanda City featuring its own theme park, movie complex and hotels, in the south-eastern Jiangxi province that neighbours Shanghai.

Although he has jeered at Disney before, his latest comments signal an escalation in the rivalry between the world's biggest entertainment company and China's biggest, as both prepare to open multi-billion- dollar parks. At stake is dominance of China's burgeoning entertainment industry, as the number of middle-class Chinese consumers is expected to swell.

"One tiger is no match for a pack of wolves," he said on the talk show. "Shanghai has one Disney, while Wanda, across the nation, will open 15 to 20." 

The Beijing-based conglomerate said last Friday it will open the 200ha Guilin Wanda Cultural Tourism City in 2020, the 11th large-scale tourism project of its kind for the company.

Wanda is investing 16 billion yuan (S$3.4 billion) in the project in the south-western Guangxi region. It will include an amusement park, a film park and an ocean park, with Wanda targeting to draw 20 million visitors in its opening year.

Mr Wang, who often vies with Alibaba Group Holding chairman Jack Ma for the title of China's richest person, forecasts the conglomerate will reach US$100 billion (S$138.2 billion) in revenue and US$10 billion in net profit by 2020.

The conglomerate, which acquired Hollywood film company Legendary Entertainment for US$3.5 billion this year, is poised to become the world's largest cinema operator after it completes the purchase of Carmike Cinemas Inc.

Wanda and Disney's rivalry is not limited to China. Wanda said last February it plans to invest in a retail and leisure development project in France that is aimed at taking on Disneyland Paris. 

Mr Wang said Disney lacked innovation in its business model and he could not comprehend how Disney spent US$5.5 billion on a park similar in scale to Wanda's Jiangxi park.

By comparison, the Wanda City complex in Nanchang is a 21 billion yuan project, according to the company's website.

"Over the next 10 to 20 years, Wanda must make Disney unprofitable," he said. "Every park of ours has its own business model. There is constant innovation and we combine indoor and outdoor activities. So, I think that Disney's prospects in China, at least financially, don't look good to me."

For Disney to plan its 390ha park outdoors in a city such as Shanghai, where summers are rainy and winters are cold, revealed the company's lack of innovative thinking, Mr Wang said.

"To balance the books, Disney has to charge high prices, which will put off some customers," he added. "On top of this China already has Wanda. They really should not have come to China at all."

The Disney project is the Burbank, California-based company's first theme park in China.

While he acknowledged that Disney, as the world's largest tourism business, is a good company, he added: "As far as the opening of the Disney Shanghai park goes, I'm sure we will win."

Disney's vast intellectual property rights have become a burden and it seldom researches new business models, he said.

"The days of Mickey Mouse and Donald Duck being able to create a frenzy are over," said Mr Wang. "They are entirely cloning previous intellectual property, cloning previous products with no innovation."

Wanda does not have any hugely well-known characters, but several newer Chinese animations such as Boonie Bears and Pleasant Goat And Big Big Wolf, developed by domestic companies, are popular in China.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on May 25, 2016, with the headline 'Clash of the theme parks in China'. Print Edition | Subscribe