How Japan’s Youngest CEO Transformed Hello Kitty and Sanrio's Future
Hello Kitty, Japan's iconic creation, is celebrating its 50th anniversary, but her journey has not always been smooth sailing. Originally created on November 1, 1974, by Sanrio, Hello Kitty has become one of the most recognizable figures worldwide, ranking as the second-highest grossing media franchise globally, just behind Pokémon. However, despite her widespread fame, Sanrio's business faced significant challenges in recent years, as interest in the character began to wane.
The company experienced financial highs and lows, with major surges in sales in 1999 and 2014 driven largely by Hello Kitty's popularity. Yet, these spikes were not sustainable, leading to a period of uncertainty for the brand.
A New Vision for Sanrio Under Tomokuni Tsuji
In 2020, Tomokuni Tsuji, the grandson of Sanrio's founder Shintaro Tsuji, took over as the company’s CEO at just 31 years old, making him the youngest CEO of a listed Japanese company. Despite his youth, Tomokuni was able to bring fresh energy and a new vision to Sanrio, significantly altering its marketing strategy and character lineup.
Under Tsuji’s leadership, the focus shifted from solely promoting Hello Kitty to boosting the popularity of other Sanrio characters. "It is not about lowering Hello Kitty's popularity but boosting others' recognition," Tsuji explained. As a result, characters like Cinnamoroll, a cute puppy with a cinnamon roll-shaped tail, surpassed Hello Kitty as the most popular character in customer polls.
Diversifying Characters and Expanding Global Marketing
Sanrio's transformation also involved diversifying its character portfolio. While Hello Kitty remains the ambassador of "kawaii" (cute) culture, Sanrio introduced more unconventional characters, such as Aggretsuko, a red panda dealing with the frustrations of an office job, and Gudetama, the lazy egg known for his dark humor about life's struggles. These new characters, particularly Aggretsuko, resonate with younger audiences, especially Gen Z, and have seen success on platforms like Netflix.
Tsuji also pushed for a more global approach by expanding Sanrio’s international marketing efforts and strengthening collaborations with major global brands like Starbucks, Crocs, and the LA Dodgers. These collaborations keep Sanrio's characters in the public eye year-round and help maintain a strong presence in the market. Moreover, Sanrio has begun using artificial intelligence to track and eliminate counterfeit products, protecting its intellectual property and ensuring its designs maintain their authenticity.
Overcoming Family Dynamics and Cultural Challenges
In Japan, family businesses often pass leadership down to the next generation, and Tomokuni Tsuji’s appointment was no exception. His surname and family ties gave him an advantage in a culture that places significant value on seniority and the preservation of family businesses. However, Tsuji faced resistance, especially from his grandfather, who initially disagreed with some of his decisions.
Tsuji openly acknowledged the friction, saying that after a year of clashes, his grandfather eventually gave him the freedom to run the company as he saw fit. This newfound autonomy enabled Tsuji to steer Sanrio toward success, resulting in a remarkable "V-shaped recovery" for the company. Within two years of Tsuji’s leadership, Sanrio became profitable again, and its stock price increased tenfold, reaching a market value of over 1 trillion yen ($6.5 billion).
Hello Kitty’s True Identity: A Global Mystery
Despite Tsuji's success in revitalizing the brand, some aspects of Hello Kitty’s identity remain shrouded in mystery. In 2023, an executive at Sanrio revealed to U.S. television audiences that Hello Kitty is not, as many assumed, a cat, but a British schoolgirl. This revelation caused confusion among fans, with many expressing surprise over the character’s origins.
Tsuji, however, embraces the fluidity of Hello Kitty’s identity, stating, "Hello Kitty can be whoever you want her to be—your sister, your mother, or even another version of yourself." The mystery surrounding her origins only adds to her allure, with Tsuji speculating that Hello Kitty’s connection to London may stem from its appeal among Japanese girls in the 1970s, a notion that aligns with the city's reputation for being an "amazing" place.
A New Chapter for Sanrio
Under Tomokuni Tsuji's leadership, Sanrio has successfully navigated the challenges of modern business while maintaining its rich heritage. By diversifying its character lineup, expanding its global footprint, and strengthening its anti-counterfeit measures, Sanrio has positioned itself for continued success in the coming decades. Hello Kitty may no longer be the company’s sole icon, but her legacy, alongside a new generation of characters, ensures that Sanrio remains a cultural and commercial powerhouse for the next 50 years.