Disney sparks theme-park battle to entertain China's middle class
05/31/2016|9:08:46 AM|Bloomberg

Beijing has Shijingshan, known as “Fake Disney,” Shenzhen has a park with replica landmarks and Yunnan province has Dwarf Empire, an attraction based on little people. 

With already 300 theme parks in China, including some ranked among the world’s worst, competition to amuse the nation’s growing middle class is set to intensify. Dalian Wanda Group Co. opened a $3.2 billion project in southeastern Jiangxi province on Saturday, two weeks before the planned unveiling of Shanghai Disney Resort, Walt Disney Co.’s $5.5 billion mainland foray. Five dozen more entertainment venues are slated to start by 2020.

The new wave of attractions promises to transform China’s outdoor entertainment landscape, where even unprofitable and badly-run fun parks helped draw about 120 million visitors last year. Industry consultancy Aecom predicts China’s theme-park market will rival that of the U.S. after the new venues open, with 220 million visitors annually.

Tourism on a Tear

The government has predicted China’s $610 billion tourism industry will double by 2020, spurred by a growing middle class. DreamWorks Animation SKG Inc. plans to open its $2.4 billion DreamCenter and Haichang Ocean Park Holdings will unveil what’s slated to be China’s biggest marine park next year. Six Flags Entertainment Corp. is due to open its first park outside North America in 2019. 

Disney, which opened Disneyland in Anaheim, California, in 1955, and Six Flags, which has run themed rides in the U.S. for more than 55 years, have an advantage when it comes to experience. Chinese operators counter that with their superior understanding of local conditions and what they see as better value for money.

Price Barrier?

Tickets for the outdoor theme park at Wanda’s Jiangxi project are priced at RMB 198 on most days and RMB 248 on holidays and weekends. That’s about half the cost of admission to Shanghai Disneyland, where adults will pay RMB 370 each during the week and RMB  499 on peak days when the park opens on June 16.

Mermaid Attraction

Some are doing that. Haichang Ocean Park will use characters from the Chinese-made blockbuster movie “the Mermaid” to promote the Shanghai Haichang Polar Ocean Park, a 297,155 square meter site an hour’s drive from Shanghai Disneyland.

Still, the pull of well-known western characters is difficult to ignore. At Dalian Wanda’s Wanda City park in Jiangxi province on the weekend, performers were dressed as Snow White and Captain America, and some stuffed toys for sale resembled DreamWorks’ Kung Fu Panda character.

Disney said Monday it’s prepared to take action to address any infringement of its intellectual property rights. Non-Wanda characters were operated by individual stores within a mall at the Wanda park and didn’t represent the company, Dalian Wanda said in an e-mail over the weekend. It declined to comment on Disney’s statement.

Mass Market

It’s a huge market, and the mass market is still more attractive in terms of volume than the premium one. A park like Haichang is not expensive, and people can visit it often, but Disneyland is expensive and would be something people go to only once every few years.

The Disney venture in Shanghai is located in Pudong, the business district that Shanghai began building in 1990 across the Huangpu River from the historical city center of Puxi.

Industry Catalyst

Disney’s Shanghai park will be a catalyst for the broader amusement park industry, much like the way Hollywood films spurred movie-watching among Chinese, said Michel Brekelmans, co-head of L.E.K Consulting’s China practice.

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