May 19th, 2011

Playing Grown-Up at KidZania

Business Week

When Antonio Ribeiro found himself with two restless children in a Portuguese beach town, he did what any desperate parent would do: He went for the leaflet rack in the hotel lobby. There he found a brochure advertising something called KidZania—a sprawling indoor theme park, attached to a Lisbon mall, where children could pretend to be nurses, dentists, runway models, photographers, radio announcers, window cleaners, and countless other professions. And so Ribeiro ventured to KidZania with his 4-year-old twin girls. They burped fake babies in a pretend maternity ward. At a miniature dentist’s office, they examined a dummy’s teeth. They had a rollicking good time. “The whole concept—to play being an adult—seemed so attractive,” says Ribeiro.

This role-playing Xanadu is the brainchild of a childless 47-year-old former private equity guru. An unlikely pioneer of the “edutainment” business, Xavier López Ancona launched KidZania after managing bottling companies and airport suppliers for GE Capital. When a friend asked him to invest in a small chain of day-care centers—where kids would play in make-believe supermarkets, banks, and hospitals—he had an epiphany. “That’s where the spark started,” recalls López, “Nobody owns role-playing.”

At least until now. In 1999, López opened the first KidZania in the Santa Fe neighborhood of his native Mexico City. “The first year, it just blew by all of the metrics for the attendance numbers, for the number of sponsors, for the satisfaction of the guests,” says Cammie Dunaway, KidZania’s global chief marketing officer. “So he decided to franchise the concept.” The second KidZania opened seven years later in Tokyo, and the business has since spread to seven other cities including Dubai, Jakarta, Lisbon, and Seoul. Each park is a miniature city in which children “work” in up to 100 pretend businesses, from dental clinics to fire stations and bottling plants to courier services. Ten more KidZanias are now under construction in places such as Kuala Lumpur and Santiago. In 2013, López plans to open a park in an as-yet-to-be-determined U.S. city, the first of what he says will be at least 12 across the country. By that same year, he estimates KidZanias the world over will attract up to 20 million annual visitors.

As his edutainment empire has expanded, a fine-tuned business model has emerged. First, find an urban metropolis in a climate where people will pay money to come indoors. Second, make sure said metropolis has an abundance of young families and a concentration of corporate headquarters. Third, persuade said corporations—especially those with sizable corporate social responsibility budgets—to pay KidZania to build branded, role-playing establishments inside “cities” scaled for children. In Lisbon, Portuguese paint company CIN sponsors a house where children—wearing red smocks and face masks—paint walls. In the Sony studio—the company is a partner in five parks—they can learn to be photographers. At KidZania Mexico City, Procter & Gamble (PG) soap Safeguard sponsors the Safeguard pavilion, where a mascot encourages children to wash their hands—and develop a lifelong devotion for the brand. “The objective is to teach the children the correct hand-washing process,” explains P&G spokeswoman Ana Ramirez. Asked whether P&G also sees the pavilion as a way to develop future customers, she says, “Yes, definitely.” Explains Ramirez, “We hope they buy Safeguard products once they’re grown up.”

Coca-Cola (KO), which is a partner with KidZania in five locations, insists it’s not marketing to children. “[W]e do not advertise our products in children’s programs,” says Luis Fuentes, a company spokesman. “We do not target children under the age of 12 with any of our brands’ marketing messages.” Instead, the company operates kid-size bottling plants, where, Fuentes says, children can learn “what it is like to be in charge of the production line.” The process, he says, helps teach children how “to ensure consumers get the best experience through Coca-Cola products.”

Read more: http://www.businessweek.com/magazine/content/11_22/b4230085996598.htm

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