How Japan's youngest CEO transformed Hello Kitty

Hello Kitty, one of Japan's most beloved characters, is celebrating her 50th anniversary this year. Created on November 1, 1974, Hello Kitty has become a global icon, recognized and cherished by fans around the world. However, the company behind her, Sanrio, has faced significant challenges over the years. Despite being the second-highest grossing media franchise globally, just behind Pokémon, Sanrio has experienced financial ups and downs that resemble a rollercoaster ride. Recently, interest in Hello Kitty has declined, leading to struggles for the company. In the past, there were two notable surges in sales, in 1999 and 2014, driven by Hello Kitty's popularity, but these increases were not sustainable. Yasuki Yoshioka, an analyst from SMBC Nikko, noted that the company's performance has been inconsistent, with many peaks and valleys. In 2020, Tomokuni Tsuji took over as CEO of Sanrio at the young age of 31, making him the youngest chief executive of a listed company in Japan. He is the grandson of the company's founder, Shintaro Tsuji, who now serves as chairman. Under Tomokuni's leadership, Sanrio has shifted its marketing strategy to promote not only Hello Kitty but also its other characters. 'It is not about lowering Hello Kitty's popularity but boosting others' recognition,' he explained. As a result, Cinnamoroll, a cute puppy character, has now taken the title of Sanrio's most popular character, according to a customer poll. Sanrio is also diversifying its character lineup. While Hello Kitty represents the epitome of cuteness, characters like Aggretsuko, an angry red panda, have gained popularity among younger audiences. Aggretsuko first appeared in a cartoon series on Japan's TBS Television and later became a global sensation on Netflix. Another unique character is Gudetama, a lazy egg who often expresses feelings of depression and shares darkly humorous one-liners about life. In addition to expanding its character roster, Sanrio has ramped up its overseas marketing efforts and is taking a stronger stance against counterfeit products. 'We are now using artificial intelligence to detect fake products and to make removal requests,' Tomokuni stated. Collaborations with major brands, including Starbucks, Crocs, and the LA Dodgers baseball team, have been crucial to their marketing strategy. 'By collaborating with global brands, we are trying to have our characters in the market throughout the year without many breaks,' he added. A notable collaboration saw Hello Kitty throw the first pitch at an MLB game between the New York Mets and the Los Angeles Dodgers, where Japanese baseball star Shohei Ohtani plays. In Japan, many companies are family-run, and Tomokuni's surname played a significant role in his ability to implement changes at Sanrio. Professor Hokuto Dazai from Nagoya University of Commerce and Business explained that there is a strong cultural recognition of families and family businesses in Japan. 'Historically, commoners never fought over the top job,' he noted. Despite his family ties, Tomokuni faced resistance from other managers and employees when he began making changes. He even had disagreements with his grandfather regarding the company's direction. 'But one day I realized that I was being arrogant, trying to convince someone 60 years senior,' he admitted. After about a year, his grandfather encouraged him to run the company as he saw fit. The changes implemented by Tomokuni have begun to yield positive results. Within two years of his appointment as CEO, Sanrio returned to profitability, a turnaround that Yasuki Yoshioka described as 'a beautiful V-shaped recovery. ' The company's stock price has increased tenfold since 2020, and Sanrio now boasts a market valuation of over a trillion yen, equivalent to approximately 6. 5 billion dollars. However, an unexpected incident occurred earlier this year when a Sanrio executive stated on US television that 'Hello Kitty is not a cat' but rather a British schoolgirl. This revelation surprised many fans worldwide. Tomokuni responded, 'Hello Kitty is Hello Kitty and she can be whoever you want her to be. ' He also speculated that the decision to make her British might be linked to the admiration many Japanese girls have for London. As Hello Kitty marks her 50th anniversary, the mystery surrounding her origins may continue to intrigue fans for years to come.