Disney's language schools thrive in the English-hungry mainland
Five-year-old Wei Ziyun chose "Robot" as his English name after the title character in the Walt Disney (DIS) movie Wall-E. Now a Disney English learning center in Shanghai is teaching him how to spell it. "Robot" and his classmates are learning the colors of the fish on Mickey Mouse's boat and the articles of clothing Goofy needs when the weather gets cold. They should be more than proficient in English by the time the $4.4 billion Shanghai Disney Resort opens in about five years. "I want to come here every day," the boy says after one of his twice-weekly lessons. "It's fun to learn English."
Disney opened its first English-language academy in China in 2008, and demand for English instruction has increased so much that the company has in the past year tripled the number of its schools, to 22. "It's a very efficient way of marketing their brand as well as the amusement park," says Shang Yang, chairman of Shangyang Enterprise Management Consulting. "They're starting years early, brainwashing Chinese children and cultivating them as potential clients in a very indirect, yet penetrative, fashion."
China's private education market, including international schools, is projected to grow to 517 billion yuan ($79.6 billion) by 2012 from 356 billion yuan in 2009, according to Merrill Lynch (BAC). Andrew Sugerman, Disney English's general manager, says the market for children's English-language learning in China may increase 29 percent annually over the next four years from the current 24 billion yuan. Sugerman declined to give financial details about Disney English except to say that it's profitable. Besides Shanghai, there are learning centers in Beijing, Hangzhou, Nanjing, Ningbo, Tianjin, and Suzhou. Although Disney eventually may expand the business outside the mainland, Sugerman says all the company's focus currently is geared toward China.
"Being surrounded by all sorts of Disney products and characters, it's almost impossible for children and their parents not to love Disney," says Wang Bing, an analyst at Phillip Securities Research in Shanghai.
The private education market is highly fragmented in China. New Oriental Education & Technology Group (EDU) in Beijing, the nation's largest operator, had less than a 1 percent share in 2009, according to Merrill Lynch. New Oriental made about $64 million from children's English training last year, up more than 35 percent from a year earlier, says President Louis Hsieh. He expects New Oriental's English training program for kids to grow by at least 40 percent during the next couple of years. Learning English is "seen as an absolutely necessary skill to get a good-paying job," he says.
Disney English worked with an academic advisory board to create its Disney Immersive Storytelling Approach, producing more than 300 songs for the program. Sugerman says the curriculum follows standards set by Chinese education ministries. A team of 10 Los Angeles-based staffers creates additional culturally relevant content.
Disney charges 3,000 yuan to 12,000 yuan annually for the programs, which include separate curriculums for 2- to 4-year-olds, 3- to 6-year-olds, and primary-school students. Classes typically last 45 minutes and are taught by a native English speaker, certified in teaching English as a foreign language, and a Chinese-speaking assistant. When it's time to start, kids march down a hallway decorated with characters from Disney films including Bolt and Ratatouille to classrooms filled with references to The Lion King and Mulan, a Disney tale about a Chinese warrior princess.
Kids are tested every six weeks on their reading, writing, speaking, and listening comprehension. They also can study at home, with materials featuring characters including Mickey Mouse, Winnie the Pooh, and the gang from the film Monsters, Inc. Says Mary Bergstrom, founder of Bergstrom Group, a Shanghai consultancy: "What Disney is doing now in China is growing a future consumer base."
The bottom line: Disney is using animated characters to grab a piece of the $3.7 billion market in English-language training for kids in China.