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Authentically Disney, Distinctly Chinese! Shanghai Disneyland
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Authentically Disney, Distinctly Chinese! Shanghai Disneyland

Authentically Disney, Distinctly Chinese! Shanghai Disneyland (image courtesy chipandco.com)

Chinaโ€™s largest foreign invested venture in the service sector

After over a decade of technical and political negotiations, work on what will host Disneyโ€™s largest Storybook Castle has finally started.

With Disneyland coming to Shanghai, the local economy is expected to receive a massive boost through the employment generation that will accompany the establishment of this super-popular resort.

Chinese officials are already describing the Shanghai Disneyland asย China's largest foreign invested venture in the service sector, and are convinced that the park will significantly promote Shanghaiโ€™s popularity as a tourist destination.

While Robert Iger, Chief Executive of Walt Disney Co., said that the $3.7-billion Shanghai Disneyland will be "both authentically Disney and distinctly Chinese", Mayor Han Zheng expressed his excitement about the development by saying, "Shanghai Disney Resort will be a role model".

Orient meets Occident

Planned as a joint venture between Disney and the, Disneyโ€™s newest resort is set to open in 2014.

57% stake in the project is owned by the Shanghai Shendi Group which is a conglomerate of Chinese government-owned companies, while 43% stake is held by Disney. This group will also help Disney co-manage the resort once it is operational.

The joint venture company that will manage the resorts will be made up with a 70% stake held by Disney and 30% by the Shanghai Shendi Group.

With an estimated initial investment of 24.5 billion yuan ($3.7 billion), Disney's Shanghai theme park will be its first in mainland China and the third in Asia.

Robert Iger, chief executive of Walt Disney Co, said in a statement "Our Shanghai resort will be a world-class family vacation destination that combines classic Disney characters and storytelling with the uniqueness and beauty of China".

The construction of other commercial facilities in the resort โ€“ retail, hotels dining etc - requiring another 4.5 billion yuan, this resort aims to attract 7.3 million visitors annually once it opens up. With a number of wealthy cities surrounding the Yangtze Delta region where Shanghai is located, the location for Shanghai Disneyland is being deemed ideal by analysts.

Overcoming Roadblocks

Disneyโ€™s dream of launching Shanghai Disneyland as part of its endeavour of expanding its global has been met with a number of roadblocks over the years.

First there was the issue of the super-tightly regulated Chinese media industry not allowing Disney to start up its television channel in the country. Then of course, thereโ€™s the low-growth story of Hong Kong Disneyland, which suffered a net loss of $92.4 million in 2010.

According to market sentiment, one of the major reasons for Hong Kong Disneyland not doing so well was that it lacked size, especially given Chinaโ€™s obsession with wanting the โ€œbiggest of everythingโ€. Shanghai Disneyland, supposed to be considerably bigger than its Hong Kong counter-part, and with 40% of the total 2010 visitors to the Hong Kong park being from mainland China, ย is likely to score a big one-up over the Hong Kong park.

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