Following the global pandemic, Chinese tourists turn towards domestic sites for tourism, one of these destinations is theme parks. This domestic tourism boom with the development of the animation IP industry have jointly promoted the expansion of Chinese amusement parks. According to the data analysis of iiMedia Research, the market size (including tickets, catering, accommodation, etc.) of the Chinese amusement parks market in 2019 surpassed 300 billion RMB.
China is now home to some of the top performing theme parks in the world including Chimelong Ocean Kingdom in Hengqin and Shanghai Disneyland, and will be home to the newest Universal theme park in Beijing.
With rapid projected growth in the next 5 years, China’s amusement park industry has been in the midst of a robust age of development, with both domestic and foreign companies participating in an effort to mature this entertainment sector in high demand from Chinese consumers.
Data source: Shanghai Jiaotong University research, daxue consulting analysis, distribution of theme parks in China
Boom of Chinese amusement parks development
The hyper-growth of Chinese Amusement Parks has caught the attention of the Chinese government, issuing new regulations surrounding the development of parks in an attempt to stifle the negative effects of a theme park boom. Nonetheless, the competition for China’s Amusement Park industry continues to be fierce, fueled by a booming middle-class population in demand of high-quality entertainment.
China’s Amusement Parks among the most attended in the world
Disneyland Shanghai saw over 11.2 million visitors in 2019, however was outranked by Zhuhai Chimelong Ocean Kingdom, which saw 11.7 million visitors.
Since Disneyland’s coming to Shanghai in 2016, a number of other major Western projects are planned for development, including a Universal Studios, Six Flags, and Legoland in Beijing, Tianjin, and Shanghai respectively. Four of the leading Chinese theme park operators – Overseas Chinese Town, Chimelong, Fantawild, and Songcheng – have all topped the list for most visited parks.
The categories of amusement parks can be roughly classified into the following: Comprehensive Parks, Adventure Parks, Culture Parks, Cartoon Icon Parks, Film Parks, and Water/Ocean parks. Many parks are not exclusive to just one category, but the Chinese have brought more specific themes to parks. Simulating a Song Dynasty setting, Songcheng in Hangzhou is the most popular cultural park opened, and have continuously topped the records of highest attendance since its opening in 2014.
China has opened unique film parks, such as Changchun Film Group Corporation’s Changying Century City, and “mainland box office king” Feng Xiao Gang’s Film Town. With new water/ocean parks opening monthly, China is also developing a lucrative marine park industry. Chimelong Water Park in Guangzhou currently stands as the most visited water park in the world. Haichang Ocean Park Holdings China’s largest marine park operator is planning to open multiple new destinations along the silk route.
Universal Studios Beijing to open in 2021
The Universal Beijing Resort, commonly known as Universal Beijing, is an upcoming Chinese theme park and entertainment resort complex based in Beijing. It is designed to cover an area of 4 square kilometers, and will contain a variety of theme parks including Beijing’s Harry Potter world, the Kung Fu Panda Land of Awesomeness, and a Transformers Metrobase park.
Components of Universal Studios Beijing
Once completed, Universal Beijing Resort will consist of two theme parks (Universal Studios Beijing and a second planned theme park), a water park, a shopping mall, a dining and entertainment complex , and six hotels.
The supporting transportation will be two overpasses and two lines of subway.
The first phase of the project cobtains Universal Studios Beijing, two hotels and a dining and entertainment complex. The theme park is designed to cover an area of 100.61 hectares and the rest of them will cover an area of 67.3 hectares. The park is predicted to receive between 12 million and 15 million passengers per year. The third phase of the project will contain a water park.
The theme park uses a lof of technologies that claimed to be the world’s first of its kind and won a number of awards.
It will have a trial operation in the spring of 2021, and will open in May 2021. They registered Weibo official account and WeChat official account in March, 2019 and have over 200 thousand fans on Weibo. Before the opening, Universal Studios Beijing has already sold limited first rights on purchasing tickets which costed 50 yuan on Fliggy on 11.11 2020 and sold out in seconds.
Universal Studios Beijing will contain these seven theme park areas:
- Hollywood
- Jurassic World: Isla Nublar
- Water World
- Kung Fu Panda Land of Awesomeness
- The Wizarding World of Harry Potter
- Transformers: Metrobase (The first Transformers themed area in the world, and its has the most amusement rides in the park)
- Minion Land
Three Six Flags parks in Nanjing among many more to open soon
China expects a large number of major amusement parks to open around the next 5 years. Projects will take place in Tianjin (2018), Zhejiang (2019), Bishan (2019), and three parks in Nanjing (2021). A Universal Studios also expects to open in 2019, with double the budget as previous projects. Legoland Shanghai is also planned for 2022, building off of the 2019 Lego Land Discovery Center. Despite these foreign entrants, the theme park landscape in China is still dominated by Chinese companies. The future plans of these Chinese theme park operators are even more ambitious. Haichang Ocean Park expects 4 more parks by 2020. Wanda expressed a desire to open 15 more amusement parks and entertainment complexes by the same year. Overseas Chinese Town (OCT) currently has 3 parks under construction in Guangdong, Jiangsu, and Hunan, all are expected to open by 2019.
Chinese are spending more on the leisure industry than ever before
Behind the boom of China’s Amusement Park industry are Chinese consumers demanding quality and unique options from the entertainment industry. The Chinese are spending more money on the leisure industry than they have ever spent before, surpassing Japan to becoming the second leisure market in the world. Amongst the highest perceived activities are theme parks, as there is a pivot towards newer activities such as cruises and theme parks, which the Chinese perceive to be of higher value for its cost. As the consumption shifts from more traditional forms of entertainment such as Karaoke (KTV), the planned growth in the various types of theme parks in China is not only grown tremendously but only expected to grow even more.
Spending on theme parks in China remains high
While the Chinese are now more selective about their spending, amusement parks are places where consumers are willing to spend more money. In terms of in-park spending, a consumer report by Mintel showed that around 81% of consumers of urban Chinese consumers aged 20 – 49 have made food and drink purchases at theme parks, 76% made ticket purchases, and 59% bought souvenirs or themed merchandise. To increase profits, theme parks often develop and/or operate facilities for food/dining, hotels, retails, and other recreational opportunities. Such comprehensive facilities generate higher consumption as it extends the total tourists’ stay-time and creates loyalty for customers for the park and its brand. Most successful theme parks across China provide hotels within their parks or hotels of their branded hotels surrounding the park area. As Chinese consumers are now looking for new, quality, holistic leisurely experiences, the development of amusement park facilities such as quality dining opportunities and living accommodations greatly suits this demand and actively increases; since such offerings would create a comprehensive experience that is very different from their everyday lives.
The theme park boom attracts Chinese government attention
The explosive growth of the amusement park industry over the past few years have ignited government concern over many areas surrounding its development. In April of 2018, the National Development and Reform Commission (NDRC) stated: “In the development of theme parks we’ve seen unclear concepts, blind construction, imitations and plagiarism, low-standard duplication and other issues.” The NDRC seems to have two primary areas of concern: housing and office projects disguised as theme parks, and the debt incurred by such projects on municipal and provincial governments that are often co-sponsors of these projects. Thus, the commission has ordered parks costing more than $235 million would be subject to “special scrutiny,” and mega-parks costing more than $790 million or occupying 330 acres must seek central and regional government approval. These regulations are more targeted towards large-scale projects, thus big international operators such as Disney and Universal are unlikely to be affected. However, low-tier cities that are already highly indebted will likely face more scrutiny even smaller scale construction.
A wealth of opportunities for foreign and domestic amusement park markets
In spite of new government directives, domestic tourism continues to become more popular in China, as domestic tourism has become a symbol of national urban development for many Chinese cities. In recent years, amusement parks in China have lessened tourist traffic in popular surrounding countries such as Japan and Korea. However according to the Theme Entertainment Association, the number of world-class theme parks per 100 million people in China is only 0.2, compared to 2.5 and 3.1 in the US and Japan respectively, thus demonstrating the substantial room for growth for foreign and domestic markets alike.
The entry of international companies and increased investments made by both international and local players have accelerated overall leisure industry growth in the recent years of China’s booming theme park age. As the tremendous potential of the Chinese amusement park industry continues to be captured by big foreign players, growing domestic companies are also fueling the intense competition in the Chinese theme park market. Fantawild operates over 20 parks in China and is the second largest domestic theme park group and the fifth largest internationally. It plans to build another 20 parks both in China and abroad in the next 5 years. With many Chinese operators acting upon aggressive plans for expanding its theme park businesses, China is set to transform into a land of quality amusement parks and a hot spot for leisure tourism.
Western Markets: East-West IP Alliances show promising opportunities
Demonstrated by the recent IP infringement of Disney “Stormtroopers” in one of Dalian Wanda’s theme parks, it is evident that the booming amusement park age has also ushered in an age of IP battles. Chinese companies must compete against foreign companies with the highest IP, such as Walt Disney characters. Many companies have entered in IP Alliances, allowing collaboration between parks and its operators, enhancing the brand for both parties. There are three ways to access global IP access: acquiring the company of IP ownership, a joint venture, or signing an exclusive licensing deal. For instance, Disney has a joint venture with the Shanghai government, with licensing deal signed for use of Disney names, Characters, stories, etc. While IP alliances are a complicated process, as more foreign amusement park players looking to enter the China, more alliances are expected to be made, bridging the east-west leisure industry market through collaboration on amusement park expansion.
In addition, China is in the process of accumulating its own IP creations. Fantawild has created a series of cartoon characters of “Boonie Bears.” China Animation has invested a lot of money into its new character “Violet,” which has already added in the Shanghai Joypolis attractions. Changzhou Dinosaur Park has created a cartoon star “Baby Dinosaur.”
Safety and customer experience should be top priorities when entering the Chinese Market
The desire for quality, new experiences from a wealthier generation of Chinese consumers is the main consumer drive for the booming theme park industry. This population is looking to expand their options for the leisure market, beyond traditional activities such as shopping and karaoke. The successful player should consider safety concerns as well, due to the issues with safety mechanisms in previous smaller local Chinese theme parks. Safety also plays heavily into the perception of a better customer experience a whole, along with an array of options for quality dining and concessions, hotels, and themed merchandise. Consumers are looking to experience the whole package at theme parks, from comprehensive facilities to innovative rides, to enticing theme park characters.
Daxue Consulting can help with the analysis of any market in China, including the amusement park industry
Daxue Consulting, as a market research company, provides the adapted data in one of the most challenging markets in the world, China. We have a wide range of services to deliver a competitive market research. To know more about the amusement park market in China, do not hesitate to contact our project managers at dx@daxueconsulting.com.
