How Japan’s youngest CEO reinvented Hello Kitty

Hello Kitty is arguably Japan’s most popular creation and is currently celebrating its 50th anniversary.

But it hasn’t always been smooth sailing for the Japanese company behind the Sanrio character. The business has weathered financial peaks and valleys.

Hello Kitty has become the second-highest-grossing media franchise in the world, behind Pokémon and ahead of games like Mickey Mouse and Star Wars.

Her global reputation was underlined when Britain’s King Charles wished the Japanese emperor and empress a happy birthday during their state visit to the UK in June.

Sanrio has struggled to make money in recent years as interest in Hello Kitty has waned.

Sanrio’s sales surged twice, in 1999 and 2014, both driven by the character’s popularity. But Yasuki Yoshioka of investment firm SMBC Nikko said the surge in demand for the company’s products was unsustainable.

“Its performance has had a lot of ups and downs in the past, it’s been a roller coaster ride,” Mr Yoshioka said. explain.

So, in 2020, Tsuji Tomokuni inherits the position of Sanrio boss.

He is the grandson of the company’s founder, Shintaro Tsuji, and was only 31 years old at the time, making him the youngest CEO of a Japanese listed company.

His grandfather later became the chairman of Sanrio Corporation.

Under the younger Mr. Tsuji, Sanrio changed its marketing strategy for other characters.

“This is not to reduce Hello Kitty’s popularity, but to increase the recognition of others,” he said.

This resulted in Hello Kitty losing her status as Sanrio’s most popular character.

According to a poll of customers, that spot is now occupied by Cinnamon Roll, a white puppy with blue eyes, pink cheeks, long ears and a tail that looks like a Cinnamon Roll.

Sanrio is no longer just about cute characters either.

If Hello Kitty is Japan’s cute ambassador, then the angry red panda is the aggressive Retsuko – or Retsuko – Alleviate the frustrations of ordinary working women.

The character, popular among Generation Z, first appeared in a cartoon series on Japan’s TBS before becoming a global hit on Netflix.

Another unconventional character is Brother Egg Yolk, also known as “Lazy Egg,” who lives with depression and often delivers cruel quips that reflect the dark realities of life.

In addition to diversifying its characters, Sanrio has stepped up overseas marketing and is now cracking down on counterfeits more rigorously.

“We are now using artificial intelligence to detect counterfeit products and make removal requests,” Mr. Tsuji said.

He added that in terms of its marketing strategy, partnerships with major brands such as Starbucks, Crocs and the Los Angeles Dodgers baseball team have been key.

“In addition to our own promotions, through partnerships with global brands, we try to keep our characters in the market year-round without interruption.”

In a society that values ​​seniority so much, Mr. Tsuji’s last name is crucial to his ability to make big changes at Sanrio.

Nearly a quarter of Japan’s listed companies, such as carmakers Toyota and Suzuki and camera company Canon, Managed by family members who created them.

Dazai Hokuto, a professor at Nagoya University of Commerce, said the reason lies in culture.

In Japan, which has the world’s oldest continuous monarchy, “there is a strong recognition of family and family businesses,” he said.

From the master-servant relationship of the samurai era to the relationship between the founding family and its employees, “nowhere in history have civilians competed for the highest positions.”

“This is also because Japan has fewer professional managers to choose from,” Professor Dazai said.

“Companies tend to look internally for their next boss, including members of the founding family.”

Still, “I’d be lying if I said there wasn’t pushback from other managers and employees.” “In the company,” Mr. Tsuji said.

He also said he clashed with his grandfather over how to run the company.

“But one day I realized that it was too arrogant of me to try to convince someone who was 60 years older,” he said.

“After about a year, my grandfather told me to run the company as I saw fit – he would leave it to me.”

So far, the new owners’ revamp of the business has paid off.

Within two years of young Tsuji becoming CEO, Sanrio is once again profitable, analysts say Mr. Yoshioka calls it a “beautiful V-shaped recovery.”

Its share price has risen tenfold since 2020, with the company now valued at more than one trillion yen ($6.5 billion; £5 billion) on the stock market.

Beyond boardrooms and the stock market, there were intriguing events earlier this year.

While Hello Kitty’s true identity is relatively well known in Japan, some overseas fans were shocked by comments made by Sanrio executives in July.

Speaking on US television, retail business development director Jill Koch told viewers that “Hello Kitty is not a cat” but is in fact a British schoolgirl.

Her comments sparked a series of social media posts, with fans expressing their shock and confusion at the news.

“Hello Kitty is Hello Kitty, and she can be anything you want her to be—she can be your sister, your mother, or another version of you,” Mr. Tsuji said.

Ask him if he has Mr. Tsuji wonders why his grandfather decided not to make her Japanese, concluding: “London is an amazing city that many Japanese girls envy, so that may be one of the reasons why they assumed she was from London. .

It may not be the clear answer her fans are looking for, but after all, Hello Kitty was born 14 years before Kotsuji was born. Half a century since her creation, the beloved character’s origin story will likely continue to be shrouded in mystery for years to come.

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