Chinese billionaire Wang Jianlin says his company is aiming the crush Disney’s profit ambitions in China over the next 10 to 20 years.
Walt Disney Co.’s forthcoming Shanghai resort will represent a huge investment for the multinational entertainment and media conglomerate, and its first resort on the Chinese mainland. Now, it seems Wang’s Dalian Wanda Group plans to open a theme park as a direct challenge to Disney’s shiny new $5.5 billion Shanghai Disney resort, which is set to open June 16.
“Disney really shouldn’t have come to China,” Wang said on Chinese state television on Sunday, according to CNN Money. “It’s financial prospects don’t look so good to me.”
Wang is currently China’s largest real estate mogul and movie theater operator. In 2016, he was the richest person in Asia, with an estimated net worth of $28.7 billion. The Wanda Group has its own line of theme parks across China, and Wang unveiled ambitions not only to make Disney’s ventures unprofitable in the next few decades but also to eventually surpass the entertainment giant as the world’s biggest tourism empire by the year 2020.
“One tiger is no match for a pack of wolves — Shanghai has one Disney, while Wanda, across the nation, will open 15 to 20 [theme parks] across China,” the 61-year-old chairman said on a China Central Television show, according to Bloomberg.
Wang suggested that Shanghai’s climate, where summers are rainy and winters are bitterly cold, is not ideal for an outdoor theme park resort, and because of the high cost of the resort’s construction, Disney will have to charge high ticket prices and lose customers. Wanda Group, also called Dalian Wanda, is China’s largest private property developer and the world’s biggest cinema chain operator. Just recently, the company announced plans to open several Wanda City leisure resorts outside of China by the end of the year on Tuesday, investing a reported $3.1 billion and $4.6 billion each. It also plans to open a Wanda City near London and partner with France’s Immochan for a €3 billion project outside of Paris.
Bloomberg noted that Wang’s comment represents an escalation of the rivalry between the biggest entertainment company in the world. and the largest in China.
“Though Wang has jeered at Disney before, his latest salvo signals an escalation in the rivalry between the world’s biggest entertainment company and China’s largest. At stake is dominance of China’s $610 billion tourism industry, which the government predicts will double by 2020 amid a growing middle class.”
Disney and Wanda are clashing over the massive Chinese tourist industry, which is set to expand because of more middle-class consumers, new high-speed public transportation through rail, a planned increase of national holidays, and a government eager to support the growth of the tourist sector as part of a rising Chinese service economy. Bloomberg notes that it will be a clash of the tourist titans, with both companies already raking in tens of billions of dollars.
“Wanda, founded in 1988, has businesses ranging from commercial properties to films and finance, and the conglomerate had assets of 634 billion yuan ($97 billion) and revenue of 290 billion yuan in 2015. By comparison, Disney’s revenue for the 12 months ended Oct. 3, 2015 grew 8.1 percent to $52.5 billion.”
Wang said his company already has the business clout in China to make life difficult for Disney’s latest market. Shanghai Disney has been an enormous gamble for the company, which was in talks to open a Chinese mainland resort as far back as the mid-2000s. It was originally due to be opened in 2015, but issues with construction and changes to design forced them to push the date back to summer of this year.
A spokeswoman for Disney declined to comment in an email to Bloomberg, saying that Wang’s comment “was not worthy of a response.” Disney CEO Bob Iger met with Chinese President Xi Jinping two weeks ago in Beijing.
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