2020 In The Second Quarter, The 21% Increase In The Trend Of The Second Quarter. Shanghai Paradise Reopened Disney In May 11Th: IP Is The Core And The Chinese Market Is Very Important.

Global "war epidemic"

Disney announced yesterday that in May 11th, Shanghai Disney park will be reopened in stages, leading the world's other theme parks. Micaela Le Divelec Lemmi, the chief executive of Ferragamo, also said that the passenger flow of the company's stores located in the mainland of China has gradually resumed, and the Chinese market is the "only ray of dawn" at present.

Walt Disney Company was slightly more difficult in 2020 after 2019. Because of the new crown virus pandemic, Disney had to close all the theme parks of the company. In addition, Disney postponed the opening time of the Royal movies such as Mulan and the black widow. Its finances and share prices are under pressure. Local time on May 5th, Disney's latest 2020 fiscal year second quarter financial results verify this point, its net profit fell 91%.

The good news is that the company announced in May 5th that it will reopen the Shanghai Disney Park in phases in May 11th, leading the world's other theme parks.

In addition, the financial report also has a bright part. As of March 28, 2020, Disney's second quarter revenue was $18 billion 10 million, higher than expected $17 billion 800 million, an increase of 21% over the same period last year. In addition, as of May 4th, Disney+ paid more than 54 million subscribers. Analysts believe that this is mainly due to its rich IP content. Lin Jiawen, vice president and general manager of consumer goods in Greater China and South Korea, said in an interview with an economic reporter in twenty-first Century. "IP is the core of Disney" and Disney's business extends from IP.

Shanghai Disney park will take the lead in restarting

At the 5 day earnings conference, Bao Zhengbo, chief executive of Walt Disney Company (Bob) Chapek) announced: "in view of the recent liberalization of some control measures in recent weeks and the successful restoration of Disney town in the vicinity of our retail and catering area, we and our government partners, Shanghai Shen Di Group, are planning to reopen Shanghai Park in Shanghai in May 11th."

In twenty-first Century, the economic news reporter confirmed this information to Disney, a Chinese official. Shanghai Disney resort also announced the news on its official website. Shanghai Disney said in the announcement: "in the early stage of resumption of operation, the Shanghai park will implement a series of new operational initiatives and processes, including limiting the flow, asking tourists to buy tickets and booking in advance in advance." the safe distance between the queuing areas, restaurants, amusement projects and other arrangements in the paradise, as well as the frequency of sanitation and disinfection, will be implemented in Shanghai.

According to the announcement of the Disney resort in Shanghai, tickets will be reopened on the official online channels and official travel partners of the Shanghai holiday resort in Shanghai on May 8th at 8 a.m., and the daily sale will be limited at the beginning of the resumption of operation.

Bao Zhengbo revealed at the earnings conference that the main reason for the re opening of Shanghai's Disney park is that China's domestic epidemic prevention and control situation continues to improve. As of 24 May 3rd, the number of confirmed cases in the country has dropped to less than 500 cases, the lowest since January 23rd. The total number of confirmed and suspected cases imported abroad dropped for three consecutive weeks. Bao Zhengbo added, "in China, we see that life is gradually returning to the right track and exciting."

As the world's first reopened Disney Park, the pressure of Shanghai Disney park is not small. However, during the May 1 holiday, the performance of Shanghai's tourism industry can boost their confidence. Shanghai City Cultural Tourism Bureau announced on 5 th, during the May Day holiday, the total number of tourists in Shanghai was 7 million 70 thousand, and the consumption was 9 billion 500 million yuan. The 130 main scenic spots in the city have received 2 million 850 thousand tourists.

According to Bao Zhengbo, under normal circumstances, Shanghai's Disney park can accommodate 80 thousand visitors a day. However, according to the government's regulations, the number of visitors admitted every day after reopening will be 30% of the operation capacity, that is, 24 thousand tourists. "The initial passenger flow will be far below this level and will gradually increase to a ceiling of 30% in a few weeks."

The Chinese market is the "only dawn" in the world at present.

The reopening of the Shanghai paradise is of great significance to Disney. Disney said in the earnings report that the theme park, experience and consumer goods department of Disney was the most affected by the new crown virus epidemic. It is estimated that the impact of the epidemic on this sector's revenue will be about $1 billion, mainly due to the loss caused by the closure of the paradise and the closure of the Disney store.

Since January 2020, Disney has closed all the theme parks and resorts around the world. Disney, chief financial officer of Christine McCarthy, said that the theme park, experience and consumer goods department was a sector of Disney's profit growth, which stopped Disney's overall revenue in the second quarter by 10%.

In fact, apart from Disney, the luxury industry has also been hit hard by the epidemic. Many companies performed poorly in the first quarter of this year. LVMH sales fell 15% in the first quarter, compared with 15.4% in the first quarter, while the sales of Italy luxury goods maker Ferragamo dropped 30.6%.

Nevertheless, looking around the world, luxury companies are full of hope for China's market.

Micaela Le Divelec Lemmi, the chief executive of Ferragamo, said that the passenger flow of the company's stores located in the mainland of China has gradually resumed, and the Chinese market is the "only ray of dawn" at present.

LVMH group's chief financial officer, Jean Jacques Guiony, revealed that sales of the group's stores in the mainland of China in early April increased by 50% over the same period last year.

According to Hermes, at present, all stores in mainland China have resumed work, and the Guangzhou store has been reopened after the expansion in early April, and sales have gradually resumed. According to reports, the sales volume of the flagship store in Guangzhou in April 11th was 19 million yuan.

Jean-Marc Duplaix, chief financial officer of Kai Yun group, pointed out that with the re opening of the mainland stores, sales of the group's brand Gucci will rebound.

In a luxury industry report, Bain pointed out: "in 2021, we expect that the market will resume growth. This is the trend we have identified since 2019 and will become the keynote of 2020. We believe that the growth of the medium-term market will be supported by the needs of the Chinese middle class, the generation of millennials (born between 1983 and 1995) and the Z generation (95, 00) young people, who want to sustain the growth of luxury demand and the continuous maturity of digital channels. This is a huge difference compared with other economic crises, the SARS in 2003 and 2004 and the world after "9-11". The new crown crisis may accelerate the development of this trend, and the role of the Internet and digital technology has begun to show its good side. The recovery of the Chinese market is also based on the fact that the epidemic has been concentrated in a city (Wuhan) and a region (Hubei), far away from Beijing and Shanghai, which is quite different from Italy Milan, Spain Madrid and the United States New York.

Disney deeply cultivated local content as king.

As far as Disney is concerned, Lin Jia Wen stressed: "at the headquarters of Disney, China is surely the most important place to develop Disney's business. Because if we look at the overall consumption capacity, China is the fastest growing country. Our own view is that China will become the largest retail market in the world in the next few years. Although Disney does not have a clear regional ranking, China's ranking in the global layout of Disney is certainly the most important.

According to the data provided by Disney, in the global consumer goods market's weak environment, Disney's China consumer goods business continued to maintain two digit growth in the six years from 2014 to 2019.

In order to capture the preferences of Chinese consumers, Disney's consumer goods business in China presents many localized characteristics. In 2017, Disney opened a branch in Beijing, Chengdu and Shenzhen, which is also believed by the market that Disney will further plough in China. In addition, Disney developed a new image of Mickey Minnie based on four cultural characteristics of Beijing, Shanghai, Sichuan and Guangdong, such as Kung Fu Mickey and Minnie dressed in gowns. In addition, Disney is also embracing the local licensing providers, such as cooperation with Lining, Xia Zichen, Tan carpenter and other Chinese characteristic brands to overcome the problem of "acclimatization" of the international brand.

According to statistics, by the end of 2019, Disney had more than 600 authorized partners in Greater China, 90% of which were from local partners.

In addition, Disney took the online and offline sales mode. According to Lin Jiawen, Disney has set up shop in Disney stores in Lujiazui, Shanghai and Tai Hui Hui, and has opened online stores in Alibaba, Jingdong and other e-commerce platforms, and has participated in activities such as "double eleven" and "double two". By the end of 2019, the sales share of online 25% and offline sales has reached 75%.

In addition, from the 2020 quarter of fiscal year second quarter earnings report, the most brilliant performance is the company's direct service consumers and the international department. Benefiting from the Disney+ line, the sector's second quarter revenue increased from $1 billion 145 million to $4 billion 123 million. As of March 28th, Disney+ has 33 million 500 thousand paid users, Hulu has 32 million 100 thousand users, an increase of 27% over the same period, and ESPN+ has 7 million 900 thousand users, an increase of 259% over the same period last year.

According to McCarthy's earnings conference, the number of people living in the home was increased because of the epidemic. As of May 4th, the number of paid users of Disney+ surged to 54 million 500 thousand. Previously, Disney had predicted that Disney+ would take four years to have 60 million to 90 million paid users.

Netflix CEO Reed Hastings said in her recent earnings call conference: "I have never seen a new informer (Disney) learn and master the rules of the industry so well."

Cohen company researcher Doug Creutz and Stephen Glagola think: "because of its high quality IP, the market will take (Disney) as a relative hedge asset."

Lin Jiawen told the twenty-first Century economic report: "in fact, all the plates in our company start from a IP, from movies to our digital platform, and then they can be derived into paradise and consumer goods."

According to Lin Jiawen, after last year's acquisition of 21st Century Fox in twenty-first Century, Disney currently owns six brands: Disney, Picas, man Wei, star wars, FOSS and National Geographic. "There are so many things that are of great help to our various businesses."

Matthew Ball, executive director of Amazon's former film company, said: "Disney's impressive development in many fields such as television, comics, movies, parks, books, ice shows, video games and so on has been impressive. Most companies do not have Disney's rich IP copyright, let alone culture or technology. In the post epidemic era, Disney can do very well in how to use new strategies and products to please customers. "

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