THE NEXT GENERATION

Mexico 2014 | TOURISM | VIP INTERVIEW

TBY talks to Xavier López Ancona, President and Founder of KidZania, on the foundation of the company, expanding overseas, and entrepreneurs in Mexico.

How was KidZania founded?

I was working within the venture capital division at General Electric when a colleague of mine who had the idea of setting up a chain of day-care centers that entertained kids with roleplaying games and real life situations was in search of financing. In the beginning I left the idea aside, but as time passed and we started talking in more detail about it the idea evolved from the day-care center project to what KidZania is today. In addition, we have to keep in mind that Mexico is a rather young country, and families lack the entertainment spaces that many developed countries have for their kids. KidZania was also born to respond to the needs of the market: quality entertainment and education for kids.

How has KidZania evolved since its establishment?

KidZania is an educational and entertainment center. We believe that the combination of these two elements strengthen the learning process for kids. We have established ourselves in three shopping malls across Mexico, and we build small cities in which kids can have fun and learn how the real world works in several spheres, such as health, banking, theaters, and supermarkets, for example. There are around 60 different establishments in each city, and we invite private companies to be represented in the city—Toyota, Coca-Cola, American Airlines, Walmart, and Telmex are here to name a few. They are all multinational companies, both local and foreign, and they all very much value the chance to build close ties with the future generations of our society. In parallel, we also have collaboration agreements with public organizations because we believe it is very important to show the most realistic image of our society.

What is the company strategy when it comes to foreign markets?

We implement the franchise model when operating abroad. In Mexico, we finance and operate our centers, but when going abroad we look for a partner that can provide us with knowledge of the local market. We sign a franchise contract and we give them our content, like software, human resources training, and image, and then they pay us a percentage of the profits. For example, in South Korea we operate alongside the largest private TV channel in the country. Right now, we have 16 KidZania centers: three in Mexico, two in Japan, and one in South Korea, India, Thailand, Malaysia, Indonesia, Kuwait, Turkey, Egypt, Dubai, Portugal, and Chile. In the next few years, we will open nine more: another one in Korea and India, and we will open our first centers in Singapore, the Philippines, Russia, the UK, Qatar, Saudi Arabia, and Brazil. We are also about to sign a contract to enter France, Germany, Italy, Canada, China, and the US, which is largest market in the world in terms of entertainment.

What is the social impact of such an impressive presence in the world?

By the end of 2013, we were employing more than 8,000 people around the world. Taking into consideration our growth plans, we will certainly increase this figure very soon. Our main goal in this context is to create values among our staff while providing opportunities to everyone in the community; we employ senior workers, as well as disabled people. We believe in providing opportunities to everybody regardless of their background or condition. We promote the social inclusion of many different social groups and communities that sometimes have difficulties accessing the labor market. In addition, we should not forget the main role KidZania plays with the kids. We educate them and generate values through entertainment. At the same time, we also believe in our role as transmitter of these values to the multinationals we work with across the globe. I would also like to highlight the importance of having such agreements with large corporations, because it provides us with valuable and unique content in our efforts to make our cities as real as possible. It allows us to educate kids throughout their childhood until they become adults with values.

What are the challenges facing Mexico in its development process?

Mexico has one medium- to long-term challenge, and that is education. Through education, the country will be able to tackle other problems, such as poverty and violence. Mexico is doing great when addressing issues in sectors such as energy. However, actions in these sectors have short-term results, whereas education shows results over a longer period.

Since KidZania has its origins in entrepreneurship, what role do you think this, along with SMEs, play in the further development of Mexico?

Nowadays, SMEs represent around 80% of Mexico's GDP. However, I think Mexico still lacks entrepreneurship. However, in the last few years we have seen more people making their business ideas become a reality, I think that the country has only recently started to promote entrepreneurship. In this context, I also see a lack of long-term vision and ambition among many entrepreneurs in Mexico. Many companies prefer to stay within their familiar space rather than becoming larger chains. Also, Mexican businessmen should be more ambitious and think outside the box when they decide to export or expand operations abroad, because they tend to opt for countries within the comfort zone. For example, we are the only Mexican company in Kuwait and in many other countries in Southeast Asia and the Middle East.

What advice would you give to Mexican entrepreneurs?

When I started with KidZania, I received many negative answers from companies in the pursuit of funding to make this dream come true. However, we were very persistent and despite the economic situation of Mexico at that time, at the end of the 1990s, we pushed the idea forward thanks to our savings and agreements with private companies. They provided us with funding, too. At that time, the sponsorship deals that we offered brands were very innovative and it succeeded. I would say that the key to success is the passion and persistence of a team of the best professionals, a readiness to listen and look for advice, and having a long-term vision.

What are the competitive advantages of KidZania?

We have a strong focus on doing things better and better every time—quality wise. We know of the importance of the brand, and we are in the process of improving our product from the education, entertainment, and security points of view. This also means providing excellent services and this is only possible thanks to our human workforce—we provide them with all the training opportunities they need to grow as professionals within our organization.

What are some of the main projects you have for KidZania?

We are about to launch a line of interactive and educational toys. I see that as the opportunity to grow with a line of merchandising in the near future. We want to boost online interaction with kids. I also want to create media content for kids within the next few years. Overall, I see many areas in which KidZania can grow and expand its business activity. Finally, we have very ambitious plans to continue growing in foreign markets.