Popular culture

Hello Kitty prepares for a global takeover

The Japanese company behind Hello Kitty and its entourage of a dandy frog and an evil penguin wants the world to spend 300 billion cumulative hours with its characters by the end of 2031.

If Sanrio succeeds in restoring the fortunes of Japan’s beloved character – an icon of the country kawaii, or cute popular culture – the company thinks it can take on global rivals such as Walt Disney.

Sanrio’s CEO said the plan for Hello Kitty’s dominance was to saturate the offline world and the metaverse with its image. To do so, the company is seeking partnerships with Amazon, Netflix, and other tech giants, as well as launching non-fungible tokens.

Sanrio’s ambitious campaign follows a landmark Boardroom reshuffle. In July 2020, the company’s 94-year-old founder, Shintaro Tsuji, resigned as chief executive and handed over control to his grandson, 33-year-old Tomokuni Tsuji.

During his first 19 months in charge, Tsuji attempted to bring to life a brand that, while globally recognized, was fading under his grandfather. To introduce Kitty to a new generation of fans, he developed the concept of “Sanrio hours”, a unit of time that consumers spend with the brand.

“Our goal is to create 300 billion Sanrio Hours over the next 10 years, as time has become our new business priority. I know the goal is huge, but it is achievable,” Tsuji told the Financial Times in an interview.

Tsuji took over Sanrio from his grandfather in 2020 © Yoshio Tsunoda/AFLO/PA

Tsuji, one of the youngest CEOs of a company listed on the board of the Tokyo Stock Exchange, said more than a billion hours have already been spent sending and receiving stamps. virtual Sanrio characters on the Japanese Line chat application. He added that the company was “eager to stay close to customers, in the real and virtual worlds”.

Sanrio, a mid-sized brand licensing company that recorded 41 billion yen ($355 million) in annual sales in the last fiscal year to March 2021, took note of Disney’s strategy of expanding its businesses by acquiring content production companies and creating a universe of characters with products across all platforms.

“Nowadays, it’s not possible to just stick character images on various products and grow them,” Tsuji said.

Huge crowds in Osaka battle for exclusive bucket of popcorn and other merchandise from popular anime series demon slayer proved that contemporary characters have origins in many different types of entertainment, Tsuji said.

“That’s why when we release new characters, we don’t just think about products, but also how we use social media, and whether we’re entering from anime, manga, or games.”

Sanrio isn’t totally dependent on Kitty. He recently launched Aggretsuko, an anime comedy television series that is streaming on Netflix after airing in Japan. The satirical show depicts a female red panda working in a typical Japanese company.

The series, which became a hit in the United States and has been renewed for four seasons, is the result of an “association with Netflix”, Tsuji said. “Collaborating with platforms including Amazon Prime will be one of our growth strategies going forward,” he added.

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Sanrio’s “Aggretsuko”, an anime comedy television series airing on Netflix, has proven popular with American audiences © Sanrio

The executive said it was “highly likely” the company would explore partnerships with Sony, Nintendo and other Japanese entertainment companies to create a licensing round in content categories such as shows and games.

Sanrio also held a metaverse music festival in December called Sanrio Virtual Fes at Sanrio Puroland, its theme park, featuring its characters performing alongside pop stars and vloggers. Participants communicated with each other through avatars on various devices.

Sanrio had been “lagging behind in digital strategy,” Tsuji said, but was “looking to play more in the metaverse and NFT areas.”

The sweeping shift at the company comes as its operating profits have shrunk since peaking in fiscal 2013. Disney’s Characters Frozen and TV shows ousted Sanrio characters in lucrative American and European markets.

Covid-19 has dealt a heavy blow to the business by forcing theme parks and stores to close. The store’s merchandise, including lunch boxes, pillows and toothbrushes, had caused a stir in the 1990s with Hello Kitty under its former chief executive, but profitability has been declining.

The pandemic has been a blessing in disguise, said Tsuji, who has held a series of meetings with employees over the past year. “It was actually a good time to bring Sanrio back to recovery.”

“We wanted to take the good parts of 60 years of company history but address the weak spots we had,” he said, adding that a lack of flexibility and organizational silos had encouraged employees to stick to the status quo.

Tsuji is building an IP creation team to achieve its global ambition. The team, which is expected to be formed by April, is tasked with creating world characters to take on Elsa and Mickey Mouse.

“It can be difficult to create a character that will survive 50 years from now, but maybe you’re looking for a character that will be monetized in five or 10 years,” Tsuji said of his new designs.

“We need an overarching portfolio where the characters support each other, even if one of them falls.”

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