Shanghai Street View: Angry Birds Sputter 沪经动向：“愤怒的小鸟”安家上海

They may be all the rage on video screens, but the globally popular Angry Birds franchise has sputtered into Shanghai as owner Rovio Entertainment kicks off an ambitious plan for the brand in China. The lackluster debut for China’s first Angry Birds store, while not completely unexpected, underscores the fact that even in an international city like Shanghai, big global entertainment brands face a tough uphill battle for recognition among Chinese who tend to flock to domestically developed brands with a more local flavor.

After reading about Rovio’s big plans for China, I decided to go and visit its first store myself in the trendy Grand Gateway shopping mall in Shanghai’s bustling Xujiahui district. The brightly lit store was packed with plenty of the colorful merchandise, including pillows, bags, T-shirts, key chains and even iPad covers all adorned with likenesses of the various Angry Birds.

But the same could hardly be said for customers. One local reporter said he saw a small group of high school girls at the store during his recent visit, but that they quickly left after blanching at prices as much as 260 yuan for an Angry Birds T-shirt. That was more than I saw, as the store was completely empty during my recent visit during a weekday lunch hour. Rovio has declined to comment on sales in the 2 months since the store opened, and the 2 sales girls I saw declined to comment either.

My niece, who was visiting from America and came with me to check out the store, commented that Angry Birds are already quite passe in the United States. The colorful feathered characters certainly don’t seem to have a huge following in China either, at least not based on my street-level view of Chinese consumers who love to play games on their smartphones and tablet PCs, and who also love to wear clothing sporting the latest hot brands.

The new Shanghai store is just the first step of what Rovio hopes will eventually be a major presence in China, with a small entertainment park soon slated to also open in Shanghai at Tongji University. The company also plans to open a larger theme park in nearby Hangzhou, and aims to open stores and other outlets in 100 Chinese cities over the next 12 months.

Despite its grand plans, Rovio is facing the same uphill battle that many foreign entertainment firms now face in China, where consumers are incredibly brand conscious but where launching a new brand is both expensive and difficult due to vastly differing demographics in the highly fragmented market.

Toy giant Mattel (NYSE: MAT) learned that lesson the hard way with its popular Barbie doll franchise, which it tried to popularize in China with the launch of a flagship House of Barbie concept store in Shanghai in 2009. The store opened with fanfare on Shanghai’s super chic Huaihai Raod, offering a broader Barbie experience including a spa and design center as Mattel sought to capitalize on the city’s cosmopolitan nature and a broader Chinese love of foreign brands.

But just 2 years later Mattel abruptly shuttered the store after a disappointing performance. (previous post) Warner Bros (NYSE: TWX), whose stable of characters includes Bugs Bunny and Batman, also announced plans to open as many as 200 stores in China back in 2006, starting with a flagship store in Shanghai. But 6 years later, that same store at a prime location on Nanjing Road has been quietly shuttered, and Warner’s rich stable of characters are largely still unknown in the city.

One of the few foreign entertainment brands that has succeeded in China to date is Disney (NYSE: DIS), which enjoys wide recognition for Mickey and Minnie Mouse, as well as many of its other older characters. But that inroads is the exception rather than the rule, and comes only after decades of promotion and huge expenditure by Disney, arguably one of the world’s top family entertainment brands.

At the end of the day, I suspect that Rovio will meet with only mild success for its new flight into China, and that any success will largely depend on the popularity of its Angry Birds games in the country. The company most likely will quickly determine that despite the market’s potential, the effort is more costly than it’s worth. Accordingly, I wouldn’t be surprised to see Angry Birds fall far short of its targets, and to quietly pack up and leave its new nest in China within the next couple of years.