Business | Shanghai Disneyland

Lord of the jungle

Disney takes a big gamble with a new theme park in China

The magic middle kingdom
|SHANGHAI

A BOLD reimagining of the tale of Tarzan is one of the principal attractions at Shanghai Disneyland, a theme park twice the size of California’s original Disneyland, that opened on June 16th. Even more impressive than the acrobatic stunts on display are the gyrations performed behind the scenes by Robert Iger, chairman of the Walt Disney Company, to ensure that his firm’s vast investment in China brings equally huge rewards.

In pursuit of bumper returns Mr Iger boasted this week that the new park is “by far the most creatively ambitious and technically advanced” his firm has ever built. As evidence, he pointed out that it has the world’s tallest Storybook Castle; puts on more live shows than any new Disney park, all in Chinese; and that its heart-stopping “Tron” and “Pirates of the Caribbean” rides (based on blockbuster films) feature advanced technologies that Disney is launching in China. Disney has certainly had long enough to conjure this up; over 15 years has passed from inception to opening day.

After such a long wait, will it make money? Disney already runs four of the world’s five biggest theme parks. But despite its expertise, it has occasionally misfired outside America. Disneyland Paris was initially snubbed for being too American and Hong Kong Disneyland has suffered from being too small. With $5.5 billion invested by Disney and its Chinese partners (state entities that hold a controlling stake), much hangs in the balance.

Disney faces several hurdles. The first is China’s economy, which has slowed since the project was conceived. Household incomes are still rising, however, and interest is healthy. Even before the official opening, 1m punters had turned up for a look. Over 300m people live within three hours by car or train, a huge catchment area for a park that hopes to attract 10m to 12m people in its first year.

A second challenge is politics. China has turned the screws on foreign firms of late and is squeezing all media companies through tighter control of content. This led to regulators scuppering Disney’s joint effort with Alibaba, a local e-commerce giant, to promote its content online in China. Clearly, the firm is not untouchable.

Still, Mr Iger deserves credit for his deft dealings with government. No other firm has persuaded Chinese officials to shut down over 150 factories, clear nearly 1,000 acres of prime land, build a new metro link and paint its mascots on commercial jets. In November, regulators launched a year-long campaign to stamp out counterfeiting of Disney merchandise. President Xi Jinping even revealed last year that in party meetings, “I voted for Disney.”

Not everyone is as welcoming. Disney “shouldn’t have entered China,” declares Wang Jianlin, a well-connected property and entertainment magnate. Dalian Wanda, his firm, has just opened a $3 billion theme park in Nanchang in south-eastern China, and recently started work on its 11th park. Dozens of other theme parks are now under construction across the country.

The formidable Mr Wang believes that Disney cannot succeed in China as a “lone tiger” against a pack of local wolves that understand Chinese consumers far better. But Carl Yin, general manager at Spring Tour, one of the country’s biggest travel agencies, argues that many Chinese consumers will favour Disney over Wanda because it offers them an “authentic experience of a lifestyle” and not “just rides”.

That points to the third and thorniest problem: balancing cultures. Having learned from its earlier fumbles (Euro Disney initially refused to serve wine, a cardinal offence in France), Mr Iger has bent over backwards to respect local culture in the Shanghai resort. The food on sale is 90% Asian. The park is stuffed with traditional gardens and tea houses. The peony, China’s national flower, and other local totems are found everywhere.

Ask park-goers why they have come, however, and none mentions savouring local culture. They want more burgers and pizzas. At the premiere in the park of the Mandarin version of “The Lion King”, a glamorous celebrity couple glided by on the red carpet until the lady suddenly broke free of her beau and her bouncers, muttering something about cake. She had just spotted the Cheesecake Factory, an American dessert chain with a cult following whose first outlet in the country is in the resort.

The risk is that Disney goes too far in localising the park as it grows—Mr Iger confirmed this week it will expand soon—and strays from its winning formula. Wolfgang Puck, an Austrian-born celebrity restaurateur, was inspecting his massive new eatery inside the resort this week. Asked if Chinese culture will influence his offerings, the dapper chef said no: “You must be true to who you are, that is what people expect.” Disney might do well to take note.

This article appeared in the Business section of the print edition under the headline "Lord of the jungle"

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