(Yicai Global) Oct. 12 -- The strategy of regionalization, digitalization and product localization are the keys to The Walt Disney Company's future development, Kermid Rahman, Vice President and General Manager of Consumer Product Commercialization, the Walt Disney Company Greater China and Korea, explained in an exclusive interview with Yicai Global on Sept. 27.

Yicai Global: We have noticed that Mickey Mouse will celebrate his 90th birthday this year. What special marketing strategies will Disney unveil for this banner anniversary?

Rahman: Our company staff members greatly value the statement "It was all started by a mouse". Many consumers have already formed close emotional connections with Mickey Mouse over all these past years. Mickey Mouse is an evergreen cartoon character that will remain popular, so we have been constantly adding more content to him for his further development over the past years. Mickey Mouse also means a lot to many of our customers and he will visit Beijing, Shanghai, Wuhan, Chengdu and many other cities in China this year.

Yicai Global: The basic principle for Disney's business model is that content comes first, and this has led to the appearance of many animated films. Public data show that Disney's movie series reached an audience of about 180 million Chinese in cinemas last year, which means that nearly 200 million Chinese people walked into movie theaters for these. The China box office for Marvel Movies reached about CNY12 billion (USD1.8 billion) in total. What promotional influences will this have on the consumer product business?

Rahman: There are emotional resonances with our consumers behind each of our stories and movies. We bring the contents to Chinese consumers and they offer great support to the growth of consumer products in return, which has tripled our revenue from 2014 to this year and been quite important to our consumer product business. The contents relate closely to consumer products. I will share an example with you. My son was fond of Mickey Mouse, Winnie the Pooh and other Disney cartoon characters in childhood, but his interest has turned to the characters in the Marvel series now he is 13. You can see the resonances between Disney and consumers at different times behind each of its stories.

Yicai Global: Consumers grow along with intellectual property. The economy generated from consumer products has always been the key to Disney's business model. We found some data that really drew our attention. Disney has sold 66 licensed products in the Chinese market every second over the last 12 months, and 5,000 of Marvel's Avengers-themed cell phones sold out within seven seconds. The number of tsum tsum plushes sold would equal the distance from Shanghai to Beijing if they were lined up end to end, and this is a quite large amount. Could you please tell the business tips for reaching such goals with consumer product and how your localization strategy works during the whole process?

Rahman: Several factors account for our outstanding business performance. The first is that Disney possesses works with excellent content, including the four brands of Disney, Pixar, Marvel and Star Wars. There are emotional resonances with our consumers behind each of our stories and brands. The second is the creative idea of our products. We have been developing products that closely relate to local Chinese culture (locally relevant merchandise) with our licensees in China for the pursuit of more emotional resonance with our targeted customers. We will keep applying this localization strategy and developing more locally related products to attract Chinese consumers with our licensees for the Chinese market's future development. We will also accelerate the process of regionalization. We have set up units in Beijing, Shenzhen and Chengdu in addition to the headquarters of our Chinese division in Shanghai to promote further cooperation with local licensees as well as to learn more about the details of Chinese customers' daily lives in various parts of China. The third factor is digitalization. Most Chinese consumers buy what they like on digital platforms in addition to purchasing in traditional retail markets. The strategies of regionalization, digitalization and product localization are therefore the keys to our future development.

Yicai Global: The digitalization you have mentioned includes shopping on ecommerce platforms. I notice that the discussion of 'new retail' has been ongoing in the Chinese market, where Disney has been adopting strategies related to it and digitization, like your large digital screen for shopping, where one can buy items without actually touching or seeing them but can see the original design. What kinds of strategies related to digital technology and new retail will Disney adopt in the future China? 

Rahman: A lot of changes are occurring in China's retail market every day and Chinese consumers are eager for new shopping patterns. We can see the whole picture of the market's constant change and growth, so Disney's strategy of building digitized platforms cannot be limited to the online situation. We must figure out how to shorten the distance between our products and customers and bring new and excellent shopping experiences to them. We have been trying to present new shopping experiences by cooperating with some key opinion leaders to try new online sales methods. We can sell 220,000 garments within one day in cooperation with such key opinion leaders. The development of digital platforms includes both the frequently discussed 'Business to Consumer' and 'Business to Business' [models]. One of our main assisting licensees imported the previous model of 'wholesale' in the Chinese market into the online platform; this took us two years to further develop. The number of online buyers and licensees has quadrupled, with the feedback from these retailers stating that the wholesale mode seems quite promising in future.

Yicai Global: I have been wondering what influence the acquisition of 20th Century Fox and other mergers by Disney in the global market will have on its China consumer product business?

Rahman: The Walt Disney Company has been exploring and developing the Chinese market for 30 years and I have been working in Shanghai for a decade. We will keep our focus and input on the Chinese market in the future as it is one of the most important and most intensively developed markets in our global map but still needs some improvements. The first is that we will keep producing our contents by making movies and keep putting these contents onto the digital platforms. The second is to deepen the understanding of our partners towards our customers via extensive research and annual surveys. The third is to tighten our relationship with our cooperative partners. We have more than 600 licensees in China. We hope that each of our products can meet or exceed our customers' expectations, since growth is not merely a matter of channels.

Editor: Ben Armour