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Disney to break ground on Shanghai theme park

The Walt Disney Company will begin construction on Shanghai Disneyland tomorrow. And the park is expected to capitalize on existing demand for Disney products in China.

JEREMY HOBSON: To China now — it’s hard for any global company to resist doing business in a market with 1.3 billion people. So tomorrow Disney will break ground on its first theme park in mainland China. The company will spend nearly $4 billion on the park.

Marketplace China Bureau Chief Rob Schmitz reports.


ROB SCHMITZ: In China, anyone can steal the image of Mickey Mouse, put it on a t-shirt, and sell it. It’s even easier to steal ‘Toy Story 3’ and sell it as a pirated DVD.

PATRICK CHOVANEK: But the theme park experience, and the high quality of both the customer service and the rides and the attractions is something that Disney, probably correctly, thinks is something only it can do.

Patrick Chovanek is a business professor at Tsinghua University. He says rampant piracy is the big reason why Disney characters are household names in China. A Disneyland in Shanghai means the company can finally capitalize on this brand recognition. Consider it revenge of the mouse. Analysts estimate the theme park will net up to $70 million annually after it opens in five years. But Disney’s revenge may never be complete: Like many foreign companies who want access to China’s middle class, Disney’s agreed to fork over a 57 percent stake in the park’s profits to a state-owned developer.

In Shanghai, I’m Rob Schmitz for Marketplace.

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