Hello Kitty, born in 1974, has just celebrated her 50th birthday. Each commemorative year, Sanrio, owner and operator of the brand and character has set new records: the 25th anniversary (in 1999) marked a sales record, while the 40th anniversary (in 2014) recorded a profit of record exploitation (21.5 billion yen) and the largest increase in the ratio of overseas sales to total sales (36%).
Starting in 2015, sales and profits declined for seven consecutive years, but during 2024, which marked the company’s 50th anniversary, operating profit reached 27 billion yen (165 million yen). euros) surpassing the 2014 record, and the market capitalization reached more than 700 billion yen (4.3 billion yen).
This renewal can be explained by the arrival of a new president in 2020. Tsuji Shintarô (92 years old at the time of the handover) handed over to his grandson, Tsuji Tomokuni (31 years old), for the first change of direction. since the company’s founding in 1960. Additionally, over the past ten years, Kitty’s share of Sanrio’s revenue has fallen from 75% to 50%: the company has gradually freed from its dependence on the character.
Hello Kitty on the first pitch at MLB Dodgers Stadium in Los Angeles on August 29, 2024. (Jiji)
In the footsteps of Sony
Sanrio was founded in Tokyo in 1960 by Tsuji Shintarô, who worked for the Yamanashi prefectural government, under the name “Yamanashi Silk Center”. Initially, the company sold silk products, wine and other local products.
In the 1960s, the culture of fix (from English characters“characters”) took off in Japan. This is how the Japanese subsidiary of Walt Disney was created the previous year and Nintendo put on sale playing cards featuring Mickey Mouse and other Disney characters, which were a huge success. Barbie dolls appeared on the Japanese market and Takara Tomy created the Rika-chan doll.
In 1962, Tsuji entered the market for derivative products featuring popular characters by producing strawberry-patterned handkerchiefs; in 1965, the company enjoyed great success with ceramics depicting characters drawn by illustrator Mizumori Ado; Starting in the 1970s, the company employed in-house designers to create original characters.
Tsuji Shintarô during the 30th anniversary of Hello Kitty, in October 2009. (Jiji)
In 1973, the company name changed to “Sanrio”, from the Spanish San Rio. The company took inspiration from Sony, which had made great strides in the United States after changing its name from “Tokyo Tsûshin Kôgyô” to “Sony.”
A character without a mouth, the head much bigger than the body
In 1974, seeking to develop its own character, it was a cat with a ribbon at the corner of its ear, whose head was twice the size of its body, designed by house designer Shimizu Yûko, aged around twenty. years at the time, with a nod to Snoopy, who was very popular at the time. The absence of a mouth was justified by the fact that Shimizu Yûko thought that it would speak to the public, precisely.
When the first Hello Kitty product, a coin purse, was launched the following year, success exceeded expectations. Initially, the character didn’t have a name, it was just accompanied by the word “Hello!” “. It was later named after Alice’s cat, “Kitty”, which appears in Shimizu’s favorite book, Alice Through the Looking Glass. Since then, Sanrio has launched a succession of new characters, including: My Melody, Kiki & Lala, Tuxedosam and Kerokero Keroppi.
By the late 1970s, Kitty’s initial popularity waned, but Yamaguchi Yûko, who became the third house designer in 1980, contributed to her resurgence in popularity. She brought movement to Kitty’s poses, in keeping with trends, like playing tennis and holding a teddy bear.
Every year, Sanrio creates five to ten new characters, or 450 to date, most of which disappear from store shelves after a few years. Among them, only Kitty has remained present for 50 years, thanks to the evolution of its design and the flexibility of licensing operations.
In 1984, Kitty’s 10th anniversary, Sanrio’s sales were 71.7 billion yen. This shows the importance of Sanrio at a time when Nintendo, on the eve of the launch of the Famicom (NES), had a turnover of 67.7 billion yen and Bandai exceeded 60 billion yen.
More than 30 years of success abroad
Contrary to its good performance in Japan, the company experienced difficulties abroad: in 1974, Sanrio established a subsidiary in the United States and actively expanded in Europe and Asia, and even became involved in film production in Hollywood. However, in 1986, when Shintarô sent his son Kunihiko to run the American subsidiary, the cumulative deficit reached 3.6 billion yen. Kunihiko traveled the continent with a suitcase full of catalogs and products to develop the network of points of sale.
Hello Kitty’s early days in the United States were marked by distribution of Sanrio products through its Gift Gate stores, which reached inland and regional cities where entertainment was scarce. The collective memory of children enthusiastic about “accessories kawaii of Japan” has been accumulated for several generations, and this image has deeply penetrated the American market.
In the late 2000s, the company began to locally develop and design products for the American market. Collaborations with luxury jewelry, cosmetics and clothing brands were also encouraged. American celebrities such as Mariah Carey, Paris Hilton, Katy Perry and Lady Gaga have adopted this “design innovation”. They remembered loving the accessories kawaii of Sanrio when they were little girls in the 1980s and 90s.
Kitty’s collaboration with luxury brands such as LVMH and Swarovski allowed adults to continue to love and show off the characters they fell for as children. The arrival of the era of social networks, combined with the presence of people wearing licensed merchandise, allowed people to express their love for Kitty and spread this new attraction to Kitty.
Sanrio is now present in more than 130 countries and territories. In 2004, the 30th anniversary of Kitty’s birth, overseas sales exceeded 10 billion yen, and 10 years later, in 2014, they exceeded 30 billion yen, the ratio of sales to foreign compared to total sales exceeding 30%.
Recovery in the form of victory after a period of doubts
In 2013, Tsuji Kunio, the vice president who had led Sanrio’s overseas operations, died suddenly at the age of 61. Shintarô’s grandson Tomokuni joined the company in January 2014, but after achieving its highest operating profit in fiscal 2014, Sanrio began to face poor performance.
Since taking over the presidency from his grandfather in 2020, Tomokuni has reshuffled his board of directors, recruited outside talent and lowered the average age of board members from 65 to 50 years old. Organizational and structural reforms, as well as initiatives to revive growth, are underway.
New initiatives include the promotion of several digital platforms, for example through entry into ROBLOX, an online gaming platform that allows users to create and share their own online video games, and the use of Virtual Puroland, a theme park in the metaverse.
Increasing “Sanrio time” (the time spent playing games and watching videos of Sanrio characters, or using character products in daily life) by extending licensing to digital has become the strategic objective.
The slogan that sums up the company’s philosophy, in Japanese Minna nakayoku (“All Friends”), was in English Small Gift, Big Smile (“Small gift, big smile”). Today it has changed into One World, Connecting Smiles (“One world, smiles”), to highlight the importance of communication to connect smiles around the world.
For Sanrio, the key was being able to keep its characters “surrounded by friendly smiles” by licensing them to companies in other industries. The key to success lay in evolving the way of granting licenses in line with the changing times.
How is it that a character who doesn’t even have a mouth, without any presence in manga and anime, and having no really developed plot, has managed to maintain a strong presence in Japan and abroad for 50 years? The explanation, ultimately, lies in its simplicity. It is precisely because in this era where the contents are plethora, the characters kawaii which are not invasive have an ability to soothe hearts. And they continue to spark the imagination of people of all ages.
