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As Disney’s Magic Kingdom prepares to enter the Middle Kingdom, China’s richest man has geared up to do battle with Mickey Mouse for the hearts of the country’s children — and their parents’ wallets.

Wang Jianlin, billionaire real estate tycoon and chairman of the property and entertainment conglomerate Dalian Wanda Group, is wagering that his $3bn investment in a new children’s theme park will draw a newly flush middle class through its gates in big numbers.

Wanda City, a leisure resort that opened late last month in Nanchang, southern China, is banking on its ability to satisfy local tastes. It opened to a ceremony of dancing lions and obligatory speeches from local party chiefs. Attractions include China’s tallest and longest rollercoasters, and a mall designed to evoke a Chinese tea-set.

Disney, the world’s largest entertainment company, meanwhile is also betting on the new thirst in China for leisure activities. The US company’s first Disneyland resort in mainland China opens in Shanghai on June 16 — a Rmb55bn ($8bn) joint venture with three government-owned companies.

The US media conglomerate is banking on its international movie hits to attract impressionable youngsters and obliging parents. Its new park features attractions based on Pirates of the Caribbean and superhero pictures such as Iron Man and Avengers Assemble.

The US company is deploying its globally recognised characters, including Elsa and Anna from the 2013 hit Frozen, to draw visitors from across China, where per capita income has grown 20-fold in a generation.

But Mr Wang — with a fortune estimated by Forbes of $34bn — says he does not fear Disney’s formidable advantage in name-recognition and cartoon icons. His company plans to create a plethora of cheaper venues across the country to woo urban white-collar workers looking for a quick weekend day out rather than a blowout holiday.

“The days of Mickey Mouse and Donald Duck creating a frenzy are over,” he told China Central Television last month. “One tiger is no match for a pack of wolves — Shanghai has one Disney, while Wanda, across the nation, will open 15 to 20 Wanda Cities.”

Tiger Hou, a partner at Ent Group, the Chinese entertainment consulting firm, says Disney has “a real edge” against local theme parks because of its famous characters.

“Disney parks are special enough for Chinese consumers to be willing to pay a premium price to see their and their children's favourite characters. Local theme parks can provide only a lesser experience, and many are homogeneous,” he adds

Historically theme-park chains have been the reserve of companies with the deep coffers needed to pour billions into upkeep of existing attractions, as well as regularly opening new rides to draw customers back year after year.

In the US, Disney and Comcast, the US cable company that owns the Universal chain of theme parks, are among the big players. But Disney has been raising overall ticket prices above the rate of inflation for several years running, a pattern that could become unsustainable if it pushes the parks out of the reach of middle-class parents. The company is now considering offering cheaper “off-peak” prices at slower times of the year to increase overall attendance and counteract seasonal crowding.

In China, Disney’s ticket prices are double those of Mr Wang’s Wanda Park: a weekend day admission is a steep Rmb499, compared with Rmb248 for Wanda Park.

As well as being more affordable, Mr Wang’s parks rely on their ability to adapt to the local culture and climate — although a recent walk through a Wanda City park showed revellers taking photos next to storm trooper characters from the Star Wars movies. Disney said it would take legal action after a woman in a Snow White costume was spotted in the Wanda Mall recently.

But Wanda City is also seeking to create a uniquely Chinese experience. Revellers can fly over Jiangxi province in a flight simulator in the Wanda Mall, dragon-boat across the water park, or follow a path through a 10m-high bamboo forest to reach China's longest rollercoaster, made of wood.

On a recent visit, resort attendants, always in groups of threes, beamed around every corner, staffing small cafés and buffet restaurants. “Wanda reflects my principles — to bring happiness to families across China,” said a young tour guide, Zou Jiali, with a steady smile.

Analysts say the competition between the two entertainment giants should be positive for both companies if it energises the country’s cash-starved theme-park industry. Up to now, Chinese consumers have been reluctant to splash out on attractions. They spend a mere $3 per person annually on theme parks, compared with $58 in the US, according to Richard Huang, who analyses China’s entertainment industry for Nomura investment bank in Hong Kong.

Both Disney and Wanda should also benefit from the government’s plans to create more national holidays and high-speed rail lines, says Reto Wilhelm, general manager for the Chinese arm of the Thomas Cook tourism company.

Liu Zhaohui, who does consulting for theme parks in China, estimates that 70 per cent of China’s theme parks lose money, mainly because of poor management. “Disney’s advantage is that it would bring proper management to the sector,” he says.

“It’s going to be a whole different landscape when you have quality theme parks, because the supply will create the demand,” says Mr Huang. He noted that when Disney opened a Hong Kong theme park, the nearby attraction Ocean Park feared losing customers but actually gained attendance.

That could happen again on the mainland, if one Nanchang family visiting Wanda City is representative. The mother said their day out at the new theme park was just the beginning. “We’ll try to see all the major parks,” she said.

Additional reporting by Ma Fangjing


The international battle over theme parks

In the US, Disney’s main challenger in the theme park industry is also a company in the entertainment business: Comcast, the cable company.

Comcast acquired NBCUniversal in 2010 and has surprised analysts by pouring billions in capital expenditure at its Universal theme parks in Florida and California.

Much of the spending has focused on building Harry Potter-themed locations within its Universal resorts, include a Hogwarts Castle within its Los Angeles resort. In 2007, Universal gained a theme-park licence for the wizard franchise from Warner Brothers, makers of the Harry Potter movies, and J.K. Rowling, author of the books. Between 2009 and 2015, attendance at Universal’s parks doubled to 43m, with the growth credited to the fascination with the boy wizard.

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Other thematic tie-ups between movies and theme parks are on their way. US film studio Lionsgate is working with property developers to create resorts in Atlanta and Macau based on The Hunger Games books and movies.

British attractions operator Merlin has benefited from having the worldwide licensing rights to the Legoland brand and attractions based on the plastic toy bricks. Kirkbi, the Danish holding company for the family of billionaire Kjeld Kirk Kristiansen, are the majority shareholders in the Lego group and also own 30 per cent of Merlin.

The partnership may prove crucial, with three Lego animated films scheduled before 2018. Following the release of The Lego Movie in 2014, a feature that grossed an estimated $460m worldwide, Merlin saw operating profits from its Legoland parks grow by 21.1 per cent once currency movements were stripped out.

The company plans to add to its six Legoland parks worldwide, with work under way in Dubai, Japan and South Korea, by 2018. The company is also in talks to open more Legoland resorts in China and the US. Merlin has said its growth will be pinned on the “rapid growth of the middle classes, notably China, who have an appetite to consume high-quality, branded entertainment options and to travel”.

Copyright The Financial Times Limited 2017. All rights reserved.
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