Business

The entrepreneur who made millions putting kids to work

  • 15 February 2016
  • From the section Business
Xavier Lopez Image copyright JaimeRuiz

When Mexican entrepreneur Xavier Lopez Ancona was a child he dreamed of becoming president. It's a dream you could say he's fulfilled.

As the founder and president of children's role-playing theme park Kidzania he runs mini cities around the world, which all share their own unique language, money and rules.

The real-world inspired parks put its child visitors to work mimicking adult roles, in exchange for which they earn Kidzos - the fantasy world's currency - which they can spend on toys or experiences whilst there.

Image copyright JaimeRuiz
Image caption Children can role play a huge range of grown up jobs from firefighter to mechanics
Image copyright JaimeRuiz
Image caption The theme parks are aimed at children aged between four and 14-years-old

Children can do a huge variety of jobs from rubbish collector to dentist to firefighter in a multitude of workplaces including operating theatres, plane cockpits, restaurants, radio stations and theatres.

The cities themselves imitate their real world counterparts but with a difference - everything is two-thirds its normal size.

Charging for children to ape the nine-to-five grind has been a surprising success. Since the first park opened in the Mexican suburb of Santa Fe in 1999, the business has expanded rapidly.

There are now 21 theme parks in 18 countries, and the latest available figures to the end of 2014 show more than 42 million people have now visited one.

The firm's annual turnover is around $400m (£275m) globally and it employs some 2,000 people in Mexico, with a further 9,000 involved with the firm.

Image copyright Getty Images
Image caption Children get given Kidzos - the theme park's local currency - when they enter and can earn more by working in various jobs

That 50-year-old Mr Lopez, dressed soberly in a grey suit and blue shirt, has created this fantasy world for children on such a grand scale is even more surprising.

He had no plans to start his own business, and does not have any children of his own.

His ambition however is suitably presidential.

As the park's slogan "Get ready for a better world" suggests, his hope is that the miniature world he has created will help prepare children for a more socially responsible, less corrupt world which offers equal opportunities to all.

"I think that kids deserve a better world.

"Kidzania is a creative trigger for the freedom to be happy," he says.

Image copyright Kiyoshi Ota
Image caption The work experiences are linked to real life local brands which pay for their presence in the theme parks

For a children's theme park it's a big challenge, and critics argue the way the company links each job to a real world corporation in each location - they don't just make pizza they make Domino's pizzas, they fly American Airlines and open a bank account with HSBC, for example - is the complete opposite of this.

The brands themselves are officially called "sponsors" and pay for their presence in the park.

Forcing branding on such young children and charging them for the privilege is, some say, too consumerist.

Mr Lopez rejects this, arguing the partnerships make the cities more realistic and means that the firms can share their specific industry knowledge.

"We've never crossed the line of what already exists in the daily lives of all children in their real cities.

"We only replicate what the child already has every day on the street, at home and everywhere," he says.

The criticism hasn't stopped the theme parks' rapid expansion.

Image copyright Kiyoshi Ota
Image caption Mr Lopez says it chose Tokyo as its first overseas venue because it's a "trend setter" in Asia

Yet when Mr Lopez's best friend Luis Javier Laresgoiti suggested they open a nursery based on role playing, initially he rejected the idea. He was happy in his job at a private equity firm and had no plans to leave.

Mr Javier however persisted and together they came up with the idea for Kidzania - initially called La Ciudad de los Ninos or The Kids' City in its native Mexico - an idea they felt compelled to pursue.

Funding a business idea in Mexico in the late 1990s wasn't an easy matter. With the country still reeling from the effects of the financial crisis, there was no government support available.

The duo initially poured all their savings into the project, but this still wasn't enough to get the project off the ground. They then turned to a friend and one of Mr Lopez's six brothers for further investment, but again ran out of money before they could open the park.

It was only when decided to tie up with companies, which agreed to pay for their presence in the park, that they had enough money to open the first venue.

Image copyright Getty Images
Image caption All the company's overseas branches are operated as franchises

Almost immediately it did well. Their initial forecasts of 400,000 visitors doubled in the first two years.

Yet in 2004, his partner decided to leave the business and move to the US. Mr Lopez says his departure was one of the biggest challenges he has faced since starting the business, but it's an issue that he is reluctant to talk about further.

Mr Lopez's brother stepped in as his new investor and partner and after a failed attempt to expand the concept to the US, they turned their sights on Asia, a move which proved to be the key turning point for the business.

Rapid expansion

To make it possible financially, they decided to operate all the international parks as franchises. In 2006, they chose Japan capital Tokyo as their first overseas market: because Mr Lopez says it's seen as a trend setter by other Asian countries.

Their bet proved right and it triggered rapid growth throughout Asia with further franchises in countries such as Malaysia, Thailand and the Philippines. Its first European park was in Portugal's Lisbon, but since then the company has expanded further with its London park opening last year.

"Kidzania London will help us grow faster in Europe.

"We are now progressing in negotiations to reach France and Italy," he says.

Ultimately he believes the world has room for 80 Kidzanias, four times its current number.

Image copyright Getty Images
Image caption The firm's appeal lies in its mixture of entertainment and education say analysts

Why does he think his idea has been so popular?

"The initial idea was good, but there are millions of ideas that never amount to anything. I think what has been decisive is our people.

"Our product is our people. Playing with the child and making him believe that he is a firefighter, doctor or reporter that is what I'm proudest of."

But Dr Martha Rivera-Pesquera, head of marketing at El Instituto Panamericano de Alta Direccion de Empresa (IPADE) Business School, puts the company's success down to the popularity of so called "edutainment".

"By mixing entertainment and education, the concept, appeals to ambitious parents and schools as well as children.

"It's also novel and original. The fact there are no video games and violence makes it the first of its kind worldwide," she says.

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