The Walt Disney Company placed a huge bet on China’s shifting approach to Westernized entertainment on Friday as it broke ground here on a $4.4 billion theme park and resort — even if it is one without classic American features like a Main Street.
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Qilai Shen/European Pressphoto Agency
Mickey and Minnie trying to sway pedestrians in an ad for Disney in Shanghai.
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A rendering of the Shanghai Disney Resort. The castle will be Disney's biggest among its resorts.
Disney hopes the Shanghai Disney Resort will be as transformative for the company as the establishment of Walt Disney World in Orlando, Fla., was in the 1970s. It wants to create an engine that will drive demand among China’s 1.3 billion residents for other products, like Pixar films and princess dolls.
Like many global companies, Disney is putting its faith in the rise of the Chinese consumer, and at the same time it is counting on Shanghai’s specific ambitions to become a world-class city.
There will be obstacles. Disney’s first foray into China — its theme park in Hong Kong — got off to a slow start after opening in 2005. It may be a small world, but cultural miscues, including a failure to understand how guests would use the park on holidays like Chinese New Year, resulted in angry customers and damaging media coverage.
The Disney brand is also not as deeply ingrained in China as in other parts of the world. China is the only major country that does not have a Disney Channel, the company’s typical way of building its brand and stoking demand for its experiences and products. Even the concept of brand is a tough sell in China, where cheap knockoffs proliferate overnight.
The Shanghai resort’s first phase — one of the largest foreign investments in China ever — will include a 225-acre Magic Kingdom-style park with a castle surrounded by themed areas. The park component alone will cost $3.7 billion. There will also be two hotels, a lake and a shopping district, bringing the total size of the first phase to about 963 acres. Disney hopes to have the complex open by the end of 2015, an ambitious time line.
This resort has long been expected, but until now plans have been largely secret. They call for its eventually stretching across 1,730 acres in the Pudong district southeast of downtown. The Chinese media have estimated that the full resort, including upgrades to transportation infrastructure in the area, could cost about $15 billion.
A resort of this scale would have a capacity like that of Disney World, which attracts about 45 million visitors a year. In acres, the Chinese resort will be vastly larger than Hong Kong Disneyland.
Notably, Disney did not identify which of its classic rides — Space Mountain, It’s a Small World, Pirates of the Caribbean — it will bring to the Chinese mainland. One reason may be those knockoffs: When Disney unveiled detailed plans for Hong Kong Disneyland, rival parks in Asia quickly installed cheaper rides with striking similarities.
Disney is also walking a careful line with the Chinese government, which approved the park, after two decades of off-again, on-again talks, on the condition that it would be sharply different from the original Disneyland, which has become a symbol of American culture. Disney agreed to heavily incorporate Chinese culture; dressing Mickey Mouse in a kung fu robe would not do.
“Authentically Disney but distinctly Chinese” is how Robert A. Iger, Disney’s chief executive, described the resort in an interview. “There will certainly be familiar Disney elements, but it will also be quite different from the moment that you walk through the gates,” he said.
Shanghai’s Disneyland, for instance, will not feature a Main Street-theme entrance, a staple of every other Disney resort. (The Main Street areas are designed to reflect Walt Disney’s idyllic childhood in a Missouri town at the turn of the 20th century.) Instead, guests will enter through a lush 11-acre area featuring water and trees, where they will be greeted by costumed characters, Mr. Iger said. The castle will be Disney’s biggest.
Disney will shoulder about 43 percent of the initial cost, and its partner, Shanghai Shendi Group, a consortium of state-owned companies, will cover the balance. That split mirrors the resort’s ownership structure.
But Disney will have operational control, holding a 70 percent stake in a management company created with Shendi to run the resort.