Being both an internet celebrity and a long-lasting celebrity, how does Disney use IP to develop the licensing consumer products business?

When people travel to Shanghai, one of the topics they can't avoid is Disney. What kind of magic does Disney have to become one of the iconic attractions in Shanghai? Let's take a look at the operating ideas of the brand marketing giant - Disney.

When searching for Shanghai specialties on Xiaohongshu, in addition to recommending the International Hotel Butterfly Cookies and Guangmingcun Fresh Meat Mooncakes, the little red potatoes will also add Disney peripherals to the must-buy list.

It is impossible to verify when the cute dolls became Shanghai’s business card, but Disney elements have long been integrated into life and become a part of daily life.

Last year, Xiaohongshu user Akiii posted a shopping observation, easily collecting nine photos of people wearing different Disney bags. In the comment section of this post, which has more than 14,000 interactions, the top comments are: "Shanghai has too much Disney content", "Take different kids out for a walk every day", and "Different bags go with different kids".

It may be more intuitive to put the magic charm of Disney IP into data. According to public data, in the past ten years, more than 800 million Frozen-themed licensed products have been sold in Greater China alone.

How to make money with IP? For Disney China Consumer Products, the goal and method are very clear: focus on content products and characters, publicize and promote them, and then turn them into a part of Chinese consumers' lives through tangible products, jointly build happy and precious memories, and then promote the business of licensed consumer products.

In today's consumer goods market where "no IP, no collaboration, no new products", there is no doubt that Disney will continue to create miracles of growth. As Disney is about to start its next 100 years, the Knife Skills Research Institute will combine strategy and practice to try to explore why Disney's consumer products always attract people from children to adults.

1. The key to surviving the cycle: focusing resources and energy on core products

For any long-lasting brand, products are always the core of the business. Doris once shared her understanding of long-lasting brands in a conversation with Dr. Cao Hu, global partner and president of Kotler Consulting Group (KMG) China.

Throughout the history of business, long-lasting brands that can successfully cross the cycle usually go through three stages:

In the first stage, you enter the market with hit products or services to let everyone see the brand;

In the second stage, we will continue to work hard on the hot-selling products and build them to perfection, eventually becoming a brand that can represent this category;

The third stage is to cross the chasm and become a super brand with super fans. No matter which category the brand develops or how high the brand premium is, consumers are willing to buy it and spread the word.

The same is true for Disney.

In external communications, Disney executives often refer to a quote from Walt Disney: "We must never forget that it all began with a mouse."

The emergence of the world's first animated film with sound, "Steamboat Willie", brought Mickey to consumers around the world and laid the foundation for Disney - content and characters.

Currently, Disney's content portfolio consists of six major sections, namely Disney, Pixar, Marvel, Star Wars, 20th Century Fox and National Geographic. Each section has a vast amount of audio-visual entertainment content and IP. Current CEO Robert Iger has made important contributions.

In 2005, Disney was facing internal and external troubles and was at risk of being sold. Iger was appointed to focus on future growth and formulated three major development strategies for Disney, each of which revolved around content:

1. Invest most of your time and capital into creating high-quality brand content. Content is king.

2. Embrace technology to the maximum extent possible, first using technology to create conditions for higher quality products, and then reaching more consumers through more advanced and precise channels;

3 If Disney wants to become a truly global company, it must pay attention to conveying global values ​​in content creation.

In the next decade or so, Iger, who firmly believed that products were king, led a series of major acquisitions, expanding the product coverage from children and teenagers to more diverse audiences. Eight of the top ten global box office movies are from Disney, including the family-friendly "The Lion King" and the all-age "Avatar" and "The Avengers."

In fact, as early as 1957, Mr. Walt Disney personally drew the business map of the Disney Empire. From this map, we can see that cinema movies, that is, content, have always been the core of the business, starting with theme parks, music, television, publishing, licensing and retail.

After having good content products, the next problem to be solved is the promotion and operation of the content. Disney China's promotion activities mainly consist of two parts: film promotion and IP promotion, and the linkage between the two must be achieved.

Film promotion is usually carried out in parallel with the rest of the world, with both globalization and localization considered in event design. For example, the premiere of Avatar: The Way of Water, which was released at the end of last year, was held at the Walt Disney Grand Theater in Disneytown, and the Chinese dubbing actors Deng Chao and Sun Li were invited to attend and share their dubbing experience.

That night, the park’s fireworks show was also specially customized to celebrate the release of the movie. The Avatar movie-themed castle projection made its debut, and blue fireworks with the word "avatar" appeared above the castle.

In fact, Disney had already started preheating the movie three months before its release. On September 22 last year, Shanghai Disneyland opened the immersive theme exhibition "Avatar: Exploring Pandora" to visitors, presenting classic scenes, exotic cultures, and "alien creatures" from the movie in a 1,400-square-meter exhibition hall. Visitors can simulate Avatar here, try to operate the mecha in the movie, and interact with alien creatures.

Unlike the promotion work for the release of movies, which needs to be coordinated with the release cycle, the promotion work for IP covers almost the whole year and is more localized. This month alone, Disney released two flash events held on the small streets of Shanghai, a Marvel theme limited-time store and a cute party with the theme of "Love is More Lovely".

Disney moved Stark's favorite barber shop to Yuyuan Road, where visitors can not only take photos and check in, but also get the same hairstyle as Marvel heroes. On Tianai Road, Disney brought Mickey and Minnie, Donald Duck and Daisy to this "most romantic road in Shanghai" to enjoy the romance and sweetness of Shanghai in autumn with tourists, and also warmed up for the Shanghai Tourism Festival and the cooperation between shopDisney Disney Official Flagship Store and Juhuasuan Happy Day.

To celebrate its 100th anniversary, Disney held themed pop-up events in Beijing, Shanghai and Guangzhou, attracting tens of millions of fans and consumers to participate in the experience. In the next few months, consumers will encounter Disney in more cities.

Last year's hugely successful "Fluffy Festival" will continue this year. Pixar's cute characters will travel to more cities, bringing "Puffy Happiness" to consumers in winter in six offline events, using "Fluffy Party" to warm and heal consumers.

2. Story + product inspiration, one-stop customization provides emotional value for consumers

A vast amount of high-quality content and highly recognizable characters have laid a solid foundation for Disney's licensing business. The next step is to turn creativity and art into commercial value.

After years of cultivating the Chinese market, Disney clearly understands that "one trick" cannot meet the needs of the Chinese market. In order to respond to changes more quickly, Disney Consumer Products has adjusted its organizational structure and established a regional structure, from a national headquarters to multiple regional centers, so that it can identify and adapt to the diverse needs of each region at the first time.

Simply attaching IP to products is a waste of both content and brand. Disney's support for licensing starts with creativity. Currently, the creative team of the Consumer Products Division has more than 50 designers, divided into five departments: character original design, visual design, brand and packaging design, retail space design, and final production design.

Every day, the Greater China region creates more than 200 product concepts, which continuously enrich the Disney global network of image libraries and provide inspiration for cooperating licensees. Partners interested in any pattern in the library can apply to develop related products. About 80% of the patterns created by the design team every day will be implemented and become specific products that enter the lives of consumers.

How to maintain the competitiveness of design in the rapidly changing domestic consumer goods market? The design department adheres to the concept of "co-creation" and takes "listening to new voices" as the core. The "new" of new voices mainly comes from two groups: consumers and young designers.

At the Disney China 2024 Consumer Products Division Launch Conference which just concluded, Disney shared its insights into consumers, especially its understanding of Generation Z and Generation Alpha.

Overall, one of the obvious characteristics of Generation Z is that they are unwilling to be defined. They have their own cultural circles, which include both mainstream culture and various subcultures. They are a generation that is becoming more and more self-centered. This is reflected in the design, and products should be more diverse and more segmented to meet the needs of young people.

One of the insights into Generation Z is "attention to cuteness", but the cuteness understood by Generation Z can be divided into multiple dimensions, which can be cool and cute, or ugly and cute.

Based on this insight, the designers selected Lucifer from the rich archives. It comes from the classic movie "Cinderella", and is the bad cat accompanying the wicked stepmother. The designers combined the color preference of Generation Z, reduced the saturation, added large facial features and a bad expression, and presented an image that is more in line with the preferences of contemporary young people, making this marginal character born in 1950 revitalized.

From Ruthford's rebirth, we can see that Disney hopes to bring consumers not only products, but "happiness". Designers are inspired by various happy moments in consumers' lives. After research, conception and planning, they transform stories into consumer products built around consumers' life scenes in four categories: food, clothing, housing and transportation, and practice the design concept of "storytelling" in design.

When it comes to specific cooperation methods and workflows, the team adheres to the principle of Tailor Made, that is, customizing product design solutions based on projects. Partners and licensees can select patterns and products they want to develop from the inspiration library, and both parties sit down together to discuss the project goals and audiences, and other more granular needs. For example, whether the target audience is children or adults, and whether the product they want to develop is clothing or 3C. These will affect the formulation of the design solution, and finally the product will be developed.

This year, coinciding with the 100th anniversary of Disney, local designer brand Randomevent has launched joint products with Disney. Among the many IPs that have become cultural symbols, Randomevent chose the classic movie "Snow White and the Seven Dwarfs" about love, and combined the brand's unique insights into street culture with Disney's classic stories to create a cultural collision and narrative, launching a variety of items including T-shirts, jeans, shirts, and hats.

To celebrate the launch of the series, brand owner Hong Yang teamed up with creative person Tenyeee and artist Zhou Yilun to create works with the theme of "LOVE WILL COME AGAIN" and held a theme exhibition in a gallery on Hengshan Road in Shanghai. Among the many works on display, there are clothing transformation items made by artists through REMAKE's creative method, using inventory products and leftover fabrics, which not only echoes the theme but also expresses concern for environmental protection and sustainability.

Over the past 100 years, the core message Disney has delivered has always been "happiness". In the next 100 years, Disney will focus on consumers and redefine happiness.

Thanks to Disney's efforts, when people mention Disney today, they no longer think of it as a brand that belongs only to children. A more diverse group of people are consuming Mickey Mouse and Donald Duck, and finding their own personal expression in Disney IP.

3. Continuously innovate business models to help partners and ourselves find new growth opportunities

Disney wants to do more than that, it also wants to help its partners go further.

At the Walt Disney Greater China 2024 Consumer Products Division Launch Conference, Lin Jiawen, Senior Vice President and General Manager of Greater China and Korea Consumer Products Division, released a new development strategy - cross-border business development strategy. In the future, the Consumer Products Division will help overseas brands that want to enter the Chinese market to land in China; at the same time, it will help Chinese brands that want to expand into the international market to go abroad.

Whether it is the Southeast Asian market closer to Greater China, or the Australian, New Zealand, North American and Middle Eastern markets, Disney will work hard to help partners find growth opportunities in new markets.

At the media communication meeting, Lin Jiawen said, "China is one of the most dynamic consumer goods markets in the world. In the past few decades, many Chinese local brands have made great strides in brand building and product quality, and are more competitive in the international market. We are also discussing the possibility of 'going overseas' with more than 50 Chinese companies, such as MINISO, POP MART, Balabala, Yadea Electric Vehicles, etc."

Disney has its own set of standards for selecting authorized partners. Product development, channel layout, marketing capabilities, brand management, financial accounting and corporate values ​​are all taken into consideration, and after comprehensive assessment, the partners' overseas expansion capabilities are evaluated.

One successful case is the entry of the National Geographic brand into the Chinese market. The co-licenser of the National Geographic brand is South Korea's The Nature Holdings, which has opened more than 300 physical stores and e-commerce stores in markets outside of China.

With the rise of outdoor sports culture in China, consumers want more diversified consumption choices. The National Geographic brand can provide consumers with men's, women's and children's clothing, in addition to clothing and accessories, as well as urban camping equipment with unique design styles.

In addition to products, the National Geographic brand also has a story. Relying on the brand established by National Geographic magazine, it focuses on human outdoor adventure. Every purchase made by consumers will support the work of the non-profit organization National Geographic Society, helping scientists continue to explore the world, study the environment, and carry out educational work.

At the beginning of this year, the National Geographic brand opened pop-up stores in Beijing Wangfu Central and Beijing Heshenghui, creating a "3-stop challenge for outdoor exploration in the city" to bring the brand's products and concepts to consumers. On September 9, the first brand store was officially unveiled in Nanjing Deji Plaza.

In the store, consumers can see selected photographs from the National Geographic Society, experience the magnificent scenery from nature, and create a unique brand experience. Next, consumers will see more new stores in Beijing and Shanghai.

Another Disney co-licenser, Miniso, cannot go overseas without the help of IP. In May this year, Miniso became the first Chinese brand to enter New York's Times Square, with sales exceeding RMB 550,000 on the first day of opening. It is revealed that the hot-selling products include co-branded dolls such as Disney and Marvel that are popular among local consumers, and the new blind box products have even caused people to line up to buy them.

The power of IP has helped MINISO find a direction for growth. Earlier this year, MINISO announced that it would upgrade its global brand strategy to a "lifestyle brand featuring IP design" to cater to and lead the wave of interest consumption around the world.

4. Analyst Comments

What are today’s consumers paying for?

From the observation of "Shanghai local specialties", it can be seen that consumers need not only good-looking and high-quality products, but also pay more attention to whether the products can meet their aesthetic preferences and express their personality and cultural circle.

The reason why Disney is still popular among consumers from its birth to today is that it has continuously invested in and polished its core product, content. Only by listening to consumers' voices and continuously iterating products can the story that started with a mouse continue to this day.

Author: Daofa Xingyan

WeChat public account: Knife Skills Research Institute (ID: DigipontClub)