SHANGHAI - Walt Disney Co said on Tuesday that it will open its first direct-sale store in China by mid-2012.

The move would see the US-based company making another stride into the Chinese market after construction of its Shanghai Disney theme park project started in November, following a decade-long negotiating marathon.

The Disney Stores, which will sell the company's merchandise, including gifts, T-shirts and toys, will be wholly owned and operated by the company in a reversal of its former strategy in China, which was to sell its goods through authorized dealers.

The company said that the decision to open stores in China represents "an important milestone" in its business in the country.

"The kids' branded-retail market in China is growing and we are positioned to provide a family shopping environment," Stanley Cheung, executive vice-president of Walt Disney Co Greater China, said in the statement.

The outlets will be located in premier malls, shopping centers and department stores, the company said. However, a public relations official with Walt Disney Co (Shanghai) Ltd said it is "too early" to say which cities the stores will be in.

The move into China is an addition to the company's global expansion this year. A further 25 outlets will open, raising the number of stores worldwide to more than 350.

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Li Qinfan, assistant general manager of Midway Enterprises (Guangzhou) Ltd, Walt Disney Co's first and biggest authorized dealer in China with 1,700 stores nationwide, said Disney's move to open direct-sales stores is aimed at better building its brand in China

"Products and store decorations differ among dealers. Opening direct-sale stores will help the company to present a unified brand image in China, which is good for its long-term development in the country," Li said.

It is estimated that Disney has more than 1,000 authorized dealers in China.

Li added that the direct-sale stores will pose a threat to the business of the authorized dealers.

"The large number of dealers helped the company's merchandise tap into the Chinese market. Customers' established recognition of the merchandise will help the direct-sales stores to get off to a quick start, which also means the dealers will lose some market share," Li said.

But she said it does not necessarily spell a sudden death for the dealers.

"Dealers will come up with ways to cope with the competition, and Disney needs dealers in China, which is such a big market," she said.