Disney's Mickey Mouse to set up shop in China

NEW YORK, USA: Mickey Mouse and Winnie the Pooh are setting up shop in China. Walt Disney Co is on track to open its first store in China in Fall 2012, and is committed to opening 25 to 40 stores in the world's most populous country over the next three years, a top company executive told Reuters.

The news comes as the world's largest media conglomerate, home to iconic brands such as Mickey Mouse and Winnie the Pooh, looks beyond mature markets such as the United States and Europe for new sources of revenue.

"China is very important to overall Disney company plans, obviously with the launch of the Shanghai Disneyland Park. So, it is probably the newest country that is getting the most focus," Jim Fielding, president of Disney Stores Worldwide, said in an exclusive interview. Disney broke ground on the Shanghai Disneyland theme park in April 2011.

Also, the Chinese are not new to the Disney brand.

"Because the licensing division has had a presence in China already, there is affinity for the brand and affinity for characters," he said. "The market is ready."

Disney has signed a lease for its first store in Shanghai and is looking at sites in other top tier cities such as Beijing, Fielding said.

"We are focusing on tier-one cities in very high population and tourist locations, very similar to what we look at around the world," Fielding explained.

The difference will be in Disney's strategy to woo the Chinese.

"The product assortment is definitely localized to Chinese consumers and Chinese knowledge because they don't know all the Disney characters that people know in America and in Europe," he said.

For instance, he expects Disney's China stores to carry more products under the Mickey Mouse and Winnie the Pooh labels and fewer of the Princess dolls.

Disney refused to shed light on how much it planned to invest in China.

Rising consumer wealth and a huge population make China an attractive destination for many global companies, but cracking the Chinese market has not been an easy task, with challenges ranging from counterfeiting to cultural differences.

For instance, U.S. electronics chain Best Buy closed all of its namesake stores in China last year to cut costs. Toy maker Mattel shut its six-story flagship Barbie store in Shanghai early last year.

Europe still challenged

While Disney is excited about its prospects in China, it is not as optimistic about other markets.

"The European business is extremely challenging right now," Fielding said citing economic pressures in the region. "The North American and Japanese markets are ... stable for us."

Disney, which opened its first store in 1987, launched a new retail format in 2010 and has been making a push in the past year to take its highly interactive, retail format to upscale malls in newer markets, on both sides of the Atlantic.

The company plans to open 13 new and remodeled Disney Store locations in North America this year, with Colorado, Connecticut, Delaware, Utah and Virginia, all on tap to get their first new concept stores. In Europe, Disney plans to open its newly designed store in Milan, Italy next month.

Disney's new retail format sports more features to entertain shoppers, such as a table where kids can assemble cars from the popular Disney-Pixar "Cars" movie to a two-story princess castle that kids can enter.

Disney, which already has more than 200 North American stores, more than 40 locations in Japan and more than 100 stores in Europe, has said it aims to convert all of its current stores to the new format as part of a five-year plan.