China’s richest man, Wang Jianlin, is predicting tough times ahead for Shanghai Disney Resort, the $5.5 billion entertainment project due to open next month in the city’s Pudong district.
Speaking in an interview on CCTV over the weekend, Wang, who last year vowed to make his Wanda Group the world’s biggest tourism enterprise, predicted that Shanghai Disney would not be able to make a profit for at least twenty years, due to the high cost of the project and what he termed the fading appeal of the entertainment empire’s stable of characters.
Wang, who rose to fortune by building China’s largest chain of malls, has since been building his own set of theme parks across China, with the goal of opening 15-20 culturally themed tourism destinations on the mainland.
China Not “Crazy for Cartoon Characters”
Speaking on the well-known “Dialogue” business program on May 22nd, Wang acknowledged that Disney’s array of branded characters and products were an advantage, but predicted that Mickey and Donald would not carry the US company to success in China. “We have passed the phase when we would go crazy for cartoon characters,” the tycoon opined, adding that the Shanghai park is “a clone of their old products and the attraction won’t last.”
In Wanda’s parks the billionaire has tried to incorporate elements of local culture, rather than relying on branded characters. The company’s Wuhan destination, which was its first to open in December 2014, leveraged an elaborate movie theatre to create an entirely indoor park based around cinema, and Wanda’s Xishuangbanna park in Yunnan province highlights the culture of the local “Dai” minority group.
Wang, who has recently diversified his business from property into online finance, ecommerce, movie production and other areas, also criticised Disney for “only expanding based their existing catalog of characters, but rarely investing into new business models or products.” By contrast, the former army officer noted that his Wanda Group is “constantly studying new ideas.”
Will Costs Kill Shanghai Disney?
In setting his goal last year of building Wanda into the world’s biggest entertainment company, Wang targetted surpassing Disney by 2020 through building annual entertainment revenues of RMB 100 billion within a five year span, according to an account in mainland business portal Caixin Online.
For Disney on the mainland, Wang predicted that the cost of the 390 hectares (963 acres) resort project would be its downfall. “One more important problem is their high cost,” Wang pointed out. “The Disney land itself has cost them $5.5 billion, which can only be balanced with high prices. But high prices will cause loss of customers.”
Shanghai Disney Resort is invested as a joint venture with Disney holding 43 percent and the government-owned Shanghai Shendi consortium taking a 57 percent share in return, at least in part, for “undertaking the development of the land, infrastructure facilities and other associated industries” of the park, according to documents released by Disney.
Shanghai Disney Resort, which incorporates elements of traditional Chinese culture as well as Disney films and is due to open on June 16th, is currently in a pre-opening test phase. The second day of the park’s test run this month saw 30,000 visitors tour its collection of rides, hotels and particularly its Enchanted Storybook Castle, a 196-foot-tall home to the company’s large collection of princesses.