After tempering in the United States, Europe and Japan, Disney has formed its own strategy: use the theme park to establish brand awareness, and then sell other products - movies, TV shows, toys and clothing. This strategy will face challenges unimaginable elsewhere in China. â— China: Disney Challenge In October 2004, the NBA basketball game first entered Shanghai, China. NBA president David Stern and Houston Rockets center Yao Ming came to Yao Ming’s alma mater, Shanghai Gao'an Road Primary School, along with some cameramen from the US ESPN television station. I saw a group of children wearing red scarves recitation of English nursery rhymes, each holding a cartoon English book with Winnie the Pooh. What's the link between a popular cartoon bear, one of the best basketball stars in the world, one of the largest media and entertainment television stations in the world, and one of the fastest-growing countries in the world? The answer is that we are familiar with the United States Disney Corporation. Disney is the copyright holder of the Winnie the Pooh series of cartoons; Disney is the parent company of ESPN; ESPN has the right to spread the NBA China game. The Disney company is investing in a large-scale global charity event - "to encourage children to read." Among those people, there is also a middle-aged American whose eyes are full of interest in Chinese children. This person is Disney's CEO - Robert Iger. At present, there are 300 million children under the age of 14 in China, which is more than the national population of the United States! This is a very exciting market for Iger. Iger is often seen in China recently. He will inspect the progress of Disneyland in Hong Kong, participate in the NBA China Games in Shanghai, and meet with Chinese government officials in Beijing. When you talk about China with Aeger, he will be on the lookout: per capita income, Internet penetration, mobile phone and cable TV penetration. He told all of Disney's global executives: "If I learned something from a business trip in China, more than your headquarter who manages the Chinese business, then you are in trouble." Although Disney has the most popular cartoon characters in the world, financial data tells us that this is not a truly global company. Disney's overseas business sales accounted for only 20% of their total sales last year. But truly global giants, such as Coca Cola, account for at least 60% of overseas sales. Therefore, Disney's development focus in the next few years is definitely to expand in overseas markets. Seventy percent of Disney’s current overseas business comes from the slow-growing European market, while 20% comes from the Japanese market, and other places add up to only 10%. Disney will rapidly develop the Asian market in the future. Among these, China and India are the real two pieces of fat. In India, Disney has opened a sports channel and two animation channels because of loose media regulations. There is no doubt that Iger is more eager to bring the magic kingdom of Disney to the ancient kingdom -- China. When Disney, Coca-Cola, KFC, McDonald's and other international companies developed rapidly in China, Disney was obviously a step too late. But China is a bigger challenge, because here, Disney cannot easily launch media communications business. As a result, Disney focused China's earnings on theme parks and consumer goods. â—Disappointment of Disney in Japan and Europe Disney has a very unique business model. Disney has four major business systems, including entertainment, media, theme parks, and consumer goods licensing. Disney is a company that began as a movie entertainment business. This part is Disney's core competitiveness. With content, it is necessary for the media to spread, so it has successively acquired radio and television networks such as ABC and ESPN in the United States, becoming a media giant in the United States. Disney has created a movie theme park in the United States. This new entertainment method has been successful in the United States and has expanded overseas. Finally, Disney launched a consumer goods licensing business, allowing Disney cartoon characters to appear on clothes, bags, beds, cups, toys, etc. So, essentially speaking, Disney represents a unique kind of entertainment experience that comes from the screen, then appears in the park, and finally into the life of millions of households. Among the various businesses mentioned above, Disneyland is the most widely known one. Disneyland business is also one of the most important profit sources of Disney in the United States. In the 1980s, the Japanese proposed the idea of ​​opening Tokyo Disneyland. However, Americans did not invest decisively in operations but adopted conservative practices. They authorize the Japanese themselves to operate. The licensing fee is 10% of ticket sales and 5% of other income. This is a huge mistake: Japanese families are far more crazy about Disneyland than Americans have imagined. This caused them to suffer a huge loss of profits in Japan. But then they made a bigger mistake and opened Euro Disneyland in the suburbs of Paris, France, and held 40% of the shares. However, the flow of people never reached their goal. After two lessons, Disney has not been discouraged. They are determined to succeed at the third overseas Disneyland - this is Hong Kong Disneyland. â—Disneyland debuts in China With the first two lessons learned, Disney and the Hong Kong government launched arduous negotiations. In the end, they paid a smaller price and gained more shares. Due to the large number of employment opportunities and numerous tourists provided by Disneyland, the Hong Kong government not only agreed to take out a $2.9 billion investment park, but also provided free land, built special supporting roads and subways, and bought 57% of the shares. Disney, on the other hand, only invested US$300 million in 43% of its shares. In addition, Disney also uses the 5% license fee for revenue as its management and operating expenses. To some extent, Hong Kong Disneyland is more like a dress rehearsal before a formal performance. What is a formal performance? There is no doubt that it is mainland Disneyland. Iger revealed that Disney is currently negotiating with the relevant parties on this issue. Although no formal negotiations have yet begun, the goal is about six years later. This negotiation will be even harder. In other countries, Disney's movies, television and publications have successfully nurtured consumers. But in China, Disney will try for the first time to put Disneyland in a place that has not been influenced by Disney culture. Although Disney’s brand awareness is very high in China, consumers do not know much about Disney's cultural content. This is precisely the most critical factor, because the number of consumers who come to Disneyland, the length of stay, and the amount of money spent depends on their spiritual enjoyment. This spiritual enjoyment comes from their emotional connection to Disney cartoon characters. In order to make up for this lesson, Disney is carrying out marketing activities in China. The "Encourage children to read" activity is one of them. Last year, Disney teamed up with children's palaces across the country to organize children to read Disney's stories, learn about Disney cartoon characters, and use the imagination to paint the image of Mickey Mouse. â— Facing a strong opponent In 1986, Disney and China Central Television signed a licensing agreement to play Disney's cartoons on Sunday nights. In the 1990s, ESPN television programs began broadcasting in the country, and Disney was also approved to publish Animation Weekly. In 1994, Disney and Beijing TV set up the "Little Dragon Club" animation program. According to statistics, all Disney programs add up to cover nearly 400 million households in China and are the number one Western entertainment production company in China. However, Disney's media communication business is far behind another opponent, the "American News Communication Company." They hold 38% of Phoenix Satellite's shares. In addition, the United States "Time Warner" company is also actively planning to enter the Chinese market plan. Each year, Disney or Time Warner movies are approved for entry into Chinese theaters. This year China can allow 50 foreign films to enter the Chinese market, compared with only 10 per year. However, the box office revenue of these movies is not very high, because Hollywood movies in the United States are very popular in China. In addition, pirated optical discs are also one of the factors blocking the box office. Despite these strong opponents, Disney's complete entertainment industry chain is not available to other companies. For example, Disney's "Ice on Ice" performed more than 30 games in three cities in China last year, and is ready to continue to expand to the whole country; in addition, Disney is also partnering with Sohu to provide online entertainment content. Disney's current revenue in China is derived from the consumer goods licensing business. The main task is to expand the range of cities covered by retail networks and develop a variety of retail channels. In this regard, Disney is clearly not an expert. Currently, they only cover provincial capital cities in developed coastal areas in the southeast. Disney has no experience with local distributors and retail channels in China. What's more, they have to face countless pirated products... All of this will undoubtedly make Iger's burden even heavier, but it is certain that the king from the American magical kingdom will certainly come to China - this ancient and mysterious country. As he said: "I will often perform, but don't expect me to become a superstar right here."
With the official appearance of Hong Kong Disneyland on September 12, the United States Walt Disney Company has successfully landed in China. At the same time, its Asia Pacific consumer goods headquarters moved from Shanghai to Shanghai.
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How big is Disney's "Chinese Dream"