Disney will expand its market in China's third-tier cities in the near future

Mr. Han Gang, vice president of Disney Consumer Products Greater China, said in an exclusive interview with reporters recently that Disney will expand its market in China's third-tier cities, open 500 stores in third-tier cities, and authorize the authorization of four core product lines: Mickey and Winnie the Pooh. Disney Princess and Car Story."

Han Gang stated that in China's third-tier cities, different operating rules are needed for first and second-tier cities. Disney started exploring the possibility of entering a third-tier city with Disney's largest authorized dealer, Zhongwei, about a year ago. After discussion, Disney decided to open 500 stores in the third-tier cities, named this model "Toonsland", and authorized four core product lines "Mickey, Winnie the Pooh, Disney Princess and Car Generals." Product categories include apparel, stationery and toys.

Han Gang also said that Disney will continue to focus on the first-tier and second-tier markets, there is still considerable market space.

The following is an interview with Mr. Han Gang's interview with reporters:

Reporter: Good morning, Disney Consumer Goods (DCP) has enabled Chinese consumers to bring the magic of Disney to millions of households through a large number of innovative, locally-based products. Disney's consumer products have a history of 17 years in China, and they are among the best in all entertainment companies. Now we have the opportunity to have a dialogue with Mr. Han Gang, senior vice president of Disney Consumer Goods Greater China, to find out how he built and developed the Disney brand in China. Hello, Mr. Han Gang.

With the implementation of the reform and opening-up policy in China in the late 1970s, Walt Disney Company came to China. How will Disney adopt the development strategies and plans for the coming years?

Han Gang: Disney is rooted in the Chinese market for a long time. More importantly, Walt Disney Company is committed to long-term development in China. For the Disney Consumer Products Department, our goal with our licensees is to hope that China will become the world’s largest Disney consumer goods market in the near future.

Reporter: Disney's product line covers a wide range of consumer products. In the next five years of development of consumer products channels, what will be significantly different for Disney?

Gang Han: The goal of Disney's consumer products is to penetrate the brand into as wide a geographical area as possible, use a variety of different distribution channels, and at the same time ensure the high quality of our products.

Reporter: There is a large number of authorized consumer goods in the Chinese market, and competition is fierce. In addition, Disney also has a series of cartoon characters. How does the Disney Consumer Products Division manage the licensing business?

Han Gang: In China, the Disney brand is already ranked among the top 10 brands, so we have a very good starting point. Within this framework, we will continue to ensure that we use the most professional approach to content, marketing, and The core character product line "Mickey, Winnie the Pooh, Disney Princess and Car Story" is managed by retail display.

Reporter: China has a large number of authorized products, especially in first-tier and second-tier cities. How does Disney compete?

Gang Gang: When I inspected the retail centers in China's first-tier and second-tier cities, I discovered a phenomenon in which China’s market conditions have been similar to London, Paris, or other first-tier cities around the world. Therefore, it can be said that competition is becoming increasingly fierce, and every business wants to become the market leader. We and our licensees are working together to ensure that Disney is competitive enough to maintain or even expand its business. Therefore, we will continue to focus on the first-tier and second-tier markets. At the same time, we also hope to expand and enter the Chinese market more extensively.

Reporter: Why did Disney decide to expand its market in third-tier cities? What is Disney's idea of ​​the recently launched retail model "Toonsland"? Does this mean that Disney's channel development in the first- and second-tier cities has reached the ceiling?

Han Gang: All the discussion about it started about a year ago. We discussed it with Disney's largest authorized dealer Zhongwei. Zhongwei has been cooperating with us for more than 15 years and has performed well in the Disney consumer goods business. When we sit together and discuss how to expand the product's geographical coverage area, this solution is produced. In this concept, we will open 500 stores and authorize four core product lines: "Mickey, Winnie the Pooh, Disney Princess and Car Story."

Reporter: Why did Disney create "Toonsland"? How is it different from the existing retail models in the first and second tier cities?

Han Gang: Over the past five years, we have focused on covering department stores and shopping centers in Tier 1 and Tier 2 cities. Until now, these cities still have great potential, and we will continue to develop our business here. At the same time, we are also exploring how likely Disney brands and characters are to enter third-tier cities. Third-tier cities need different approaches to development. This is why we and our largest authorized dealer, Zhongwei, have studied the “Toonsland” model in the past year. The difference between the new concept and the existing one is that the pricing strategy of the product must conform to the specific conditions of the third-tier cities and focus on the four core character series “Mickey, Winnie the Pooh, Disney Princess and Car Story”. The product categories include apparel and stationery. And toys and so on.

Reporter: As Disney acquired Amazing Entertainment, more and more cartoon characters suitable for boys appeared in the Chinese market. Do you plan to launch more characters in the market in the future?

Han Gang: For us, how to integrate the cartoon characters of the company in the Chinese market is a major issue in the next two years. Last night we had just demonstrated to the core licensees how we will manage and integrate the cartoon characters in Amazing Entertainment in China in the next five years, the most important of which is Spider-Man.

Reporter: As an American company, how do you see the relationship between Disney and local partners and licensees?

Han Gang: Disney is a U.S. company. What I am proud of is that in China, we operate under the “China Walt Disney Company.” The vast majority of our network of partners is local Chinese companies. They understand the market and have a good connection with the market. This is our principle of work in the past 10 years. We will continue to cooperate with as many local Chinese companies as possible in the future. .

Reporter: How do you see Chinese customers and their spending habits?

Han Gang: Chinese consumers are the largest target consumer groups in the world. Whenever we launch new products, they are very interested in understanding and learning. This makes Chinese consumers resonate with our products and also makes us understand the fashion sense of Chinese consumers. In China, people's demand for high-quality fashion products is higher than other markets in the world.

Reporter: Could you please predict how the Disney product line will develop in China in the next three to five years?

Han Gang: As I mentioned earlier, our goal is to transform China into Disney's largest international market for consumer goods in the near future. In the past five years, our performance has doubled. This is exactly what we will do in the next five years. We hope to do this step by step while ensuring quality. Our strategy is to develop in parallel with our partner network.

Reporter: As we all know, last November, Disney signed an agreement with the Shanghai government to build a Disney theme park in Pudong. The new Disneyland is expected to be completed in 2014. Can you explain the progress of this project?

Han Gang: We are very excited about this project to be started in Shanghai. The negotiations with the Shanghai government are still in progress. I hope to make further comments after the results come out. We are all very much looking forward to and working hard to complete the project. Now negotiations are still in progress.