DALIAN/SHANGHAI/NAGASAKI -- Fosun Group's recent move to buy a 25% stake in Huis Ten Bosch, a Dutch-themed amusement park in southwestern Japan, is more than a financial investment. The Chinese conglomerate aims to beat Walt Disney in China.
The planned investment in Huis Ten Bosch "is aimed at building theme parks in China in the future," said a person familiar with the matter. Fosun has yet to release an official comment on the deal, including the value of the proposed stake purchase.
With fickle, demanding customers, running a theme park is anything but child's play. Chinese property developer Wanda Group has pulled out of the business. Fosun thinks it can do better.
Several years ago, Fosun put out feelers to the operators of Huis Ten Bosch about jointly running a theme park in China. But the Japanese side considered the proposal too risky and turned down the idea.
Fosun then changed tack, proposing to buy a stake in Huis Ten Bosch and put a director on the board. With the park in the southwestern Japanese city of Sasebo seeing a slowdown in visitors, Fosun proposed new attractions, such as performances by Cirque du Soleil, a Canadian circus operator in which Fosun has a stake. That got the Japanese side's attention.
The Chinese company is eager to develop a relationship with Huis Ten Bosch because theme parks in China are still mostly crude and unattractive despite the country's economic growth. Fosun believes that with the proper skills, it can develop highly profitable parks in the country.
Hideo Sawada, founder and chairman of Japanese travel agency H.I.S., which owns Huis Ten Bosch, is credited with turning the theme park around by introducing low-cost management and new attractions.
Those qualities made Huis Ten Bosch appealing to Fosun, which is reportedly planning to open leisure complexes in China soon that combine theme parks, hotels and commercial facilities.
"Huis Ten Bosch lacks skilled managers who can move it to the next stage of growth," said Sawada. "A [capital] tie-up with Fosun has a great merit, as it can help the park with management and customer traffic."
"The nationality and size of investors don't matter since we retain management control," he added.
Fosun was founded by Guo Guangchang and his colleagues in 1992. The group, led by Fosun International, has grown rapidly into a major conglomerate, moving into businesses ranging from pharmaceuticals, to insurance, to real estate. It has also made a number of overseas acquisitions under Guo's leadership. In all, its assets are said to be worth about 530 billion yuan ($76.96 billion). Guo has earned the nickname "China's Warren Buffett."
Then, in 2017, the Chinese government, worried about capital flight, announced plans to restrict overseas investment by Chinese companies. The clampdown was directed at five of the biggest foreign investors, including Fosun and Wanda.
But with a trade war with the U.S. raging, Beijing has again shifted its stance. As the domestic economy shows signs of cooling, the authorities view gaining know-how through overseas corporate acquisitions and other means as indispensable to China's long-term growth.
Fosun's proposed investment in Huis Ten Bosch fits well with the new mood, and the company has a track record in Japan. In 2015, it bought Hoshino Resorts Tomamu, a ski resort on the northern island of Hokkaido, for 18 billion yen ($163 million).
The resort has a hotel with an occupancy rate of more than 80%. It ranks highest in customer satisfaction in the Tomamu area on H.I.S.'s hotel reservation website. The resort is "overwhelmingly the biggest draw of visitors to this area," said an official with the commerce and industry section at the Tomamu village office.
Fosun hopes to repeat its success with the investment in Huis Ten Bosch.
In China, conditions are harsh. Many theme parks are struggling financially. When Shanghai Disney Resort opened in 2016, Wanda jumped into the business, claiming that it would beat Disney. But its theme parks failed to pull in the crowds. "It is just a puerile trick and grown-ups cannot have a good time here," was the harsh verdict of one man in his 30s who visited a park in the northeastern province of Heilongjiang.
Wanda sold off most of the parks' facilities for around $9 billion in 2017, before pulling the plug on the business the following year.
Even Shanghai Disney Resort, which opened two and a half years ago to much fanfare, is having a hard time. On Dec. 23 the park had sparse crowds despite fine weather. With one popular attraction closed for repairs, a woman in her 50s lamented, "When I came here last time, I also couldn't ride it because it had trouble." While Disney has captivated people around the world, Chinese visitors seem less impressed.
But Fosun believes it can succeed where others have struggled and earn a tidy profit from theme parks in China. It hopes having a piece of Huis Ten Bosch will give it a good classroom to learn the business.
Nikkei staff writer Hiroki Obayashi in Tokyo contributed to this report.