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

Visitors watching fireworks exploding over the castle at an event to mark the first anniversary of the opening of Shanghai Disneyland, in Shanghai on June 16, 2017.
Visitors watching fireworks exploding over the castle at an event to mark the first anniversary of the opening of Shanghai Disneyland, in Shanghai on June 16, 2017. PHOTO: AFP
Shanghai Disney celebrates its first anniversary.VIDEO: REUTERS

SHANGHAI (REUTERS) – Walt Disney celebrates the one-year 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 over 10 million guests in its first year, setting it on track for faster profits than Disney reaped from parks like Paris or Hong Kong, both loss-making for most of the years they have been open.  Disney released 10 films in China last year, including Zootopia and Star Wars: The Force Awakens with ticket sales around $1 billion, according to box office tracker EntGroup. That was up from four films and $313 million in 2014.  

This May, it rolled out the red carpet in Shanghai for a rare world premiere of the latest film in its popular 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 top executives including Chief Executive Bob Iger and chairman of Disney’s parks and resorts, Bob Chapek. They are likely to face questions on whether the group is planning a second park in China.  

But along with the rides, Disney is pursuing a steadier path to build brand and profit in downtown classrooms in six major 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 US 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 hasn’t all been plain sailing. Disney was forced to launch an investigation earlier this year after a rogue employee was found to have set up firms which made deals with local authorities using the Disney name.  

Local kids 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 local 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 very 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.”