Disney Co. Has Big Plans For China As Mickey Mouse Returns

HONG KONG - Mickey Mouse in a Mao cap? That's probably a stretch. But Chinese consumers are seeing a lot more of The Walt Disney Co.'s internationally renowned cartoon characters with the debut of the "Mi Lao Shu" - or Mickey Mouse - magazine.

Walt Disney, Dutch publisher Egmont and China's Ministry of Post and Telecommunications introduced the Chinese-language comic book last week in honor of the nation's "Children's Day" holiday. The monthly glossy magazine goes for a hefty 195 renminbi ($36) and is sold at post offices.

The magazine, with an expected circulation of 100,000, marks the latest step towards Disney's return to China since the company stormed off four years ago after what it claimed were egregious copyright infringements.

Nowadays, Disney has big plans for China. The entertainment giant has opened retail outlets in 25 cities across the country and is setting up licensing agreements to reach China's billion-plus consumers.

No doubt, product piracy remains a big issue for Disney in China. But the company is betting that Chinese consumers, who are growing more affluent by the year, will no longer settle for just knock-off copies of Mickey Mouse T-shirts and Donald Duck dolls.

"You could take your profits for the next 10 years chasing pirates there," said John Feenie, executive vice president of Disney's Consumer Products division in Hong Kong. "But the best protection for our products now is the vast increase in Chinese

consumer income. They want authentic products."

Marketing experts seem to agree.

"There's been a really strong demand for premium goods in China, and that will help Disney. Three or four years ago premium goods sales would have been unthinkable. Now they have gone through the roof," said Ron Cromie, general manager of J. Walter Thompson China, based in Hong Kong.

"The most obvious things about Disney is that the awareness of Mickey Mouse is already extraordinarily high. So the endearing Disney characters have already conquered the market," said Cromie.

However, Disney tiptoed back to the mainland during 1992, when it set up a licensing agreement with Vigor International of Hong Kong to establish "Mickey's Corner" retail areas in Chinese department stores.

When it comes to China, Disney's vision goes beyond just comic books. The company has 15 to 20 licensees for its clothing and toys in China now. In two to three years, Feenie says the number will be closer to 70 or 80. Disney sold about $2.5 billion worth of products last year in Asia alone, in a year when Japan was in a recession.