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How Hello Kitty Became a Global Superstar: Talking Strategy with Ray Hatoyama

Hello Kitty may have been dreamed up in Japan 40 years ago, but today the character enjoys popularity around the globe. To find out more about what has powered this success, we sat down with Ray Hatoyama, the man who has been the driving force behind Sanrio’s overseas strategy for Hello Kitty.

Ray Hatoyama

Ray HatoyamaManaging director of Sanrio, Co., Ltd. After graduating from Aoyama Gakuin University’s School of International Politics, Economics, and Communication in 1997, he joined Mitsubishi Corporation. Later handled media contents business operations at the Avex Group, Lawson, Inc., and other companies. Earned his MBA from Harvard Business School in 2008. That same year he entered Sanrio, and in 2010 was appointed the general manager of business strategy. Currently also serves as the general manager of the Management Strategy Supervisory Division. Now based in San Francisco.

In 2014, the Hello Kitty brand celebrated its fortieth anniversary. A variety of events have been held worldwide since this fall to observe this landmark occasion for the hugely popular character, originally from Japan but beloved globally.

One such event is the exhibition “Hello! Exploring the Supercute World of Hello Kitty,” which is being held at the Japanese American National Museum in Los Angeles until April 26, 2015. Another related event is Hello Kitty Con 2014, a four-day convention that was also held in Los Angeles from October 30 to November 2, with some 26,000 people in attendance.

A scene from the Hello Kitty Con 2014 event held in Los Angeles.

The popularity of Hello Kitty around the globe has been built on the dramatic expansion of overseas licensing through collaborative initiatives that include tie-ups with jewelry, cosmetic, and apparel brands. One person who contributed to this development is Ray Hatoyama, a managing director at Sanrio—the company that dreamed up the Hello Kitty character. Hatoyama has overseen the development of the Hello Kitty brand in some 130 countries around the world. We asked him to elaborate on some of the factors behind Hello Kitty’s overseas success up to now and to share his view of the future for the character. He began by touching on the worldwide events to mark Hello Kitty’s fortieth anniversary:

“Hello Kitty Con 2014 in the United States was a great success. Katy Perry stopped by unannounced on the first day of the event. Having a celebrity fan of Hello Kitty like Perry show up at the convention made the event even livelier and also generated a lot of media attention.”

Hello Kitty Isn’t a Cat?!

Ray Hatoyama travels the globe for his job, every year spending around 100 days in the United States, Europe, and Japan, respectively, and 60 days traveling around in other countries.

In fact, there are quite a few celebrities who love Hello Kitty, most notably Katy Perry and Lady Gaga. But, as Hatoyama emphasizes, the lucrative market for the character could not have been built solely on the basis of interest among Western celebrities.

Hatoyama notes that the market for Sanrio has changed greatly in the five to six years since he joined the company in 2008. “Prior to that point, the stronghold for Hello Kitty was Japan and Asia. But now Hello Kitty enjoys even a bigger market in Europe alone or the United States alone than in Japan. And there are core fan bases among a wide range of age groups—stretching from customers in their twenties and thirties and older, to teenagers, ‘tweens’ (8 to 12 years old), kids (4 to 7), and toddlers (1 to 3)—each representing its own market. In this way, the Hello Kitty business has been steadily expanding to embrace a very wide spectrum.”

The amazing degree to which Hello Kitty has taken root overseas was revealed in the uproar created among the character’s fans by an August 2014 article in the Los Angeles Times that revealed the shocking news that “Hello Kitty is not a cat.” The misconception that Hello Kitty is a feline stems, obviously, from the character’s name. However, as the article explains, Hello Kitty is in fact a “little girl.” In any case, Hatoyama says, “the ‘controversy’ made us aware once again of just how much attention is paid to the character.”

Some of the commemorative goods to mark Hello Kitty’s 40th anniversary.

Expanding Overseas Sales and Licensing

Hello Kitty first appeared in the United States back in 1976. “From that time through the 1990s,” Hatoyama explains, “the approach taken was to export the Japanese business model, much like the current overseas strategy of Uniqlo, which first set up stores in New York City before then expanding to San Francisco. Starting in the 2000s, we began to develop products in the United States geared specifically to that market.

“In recent years, this move toward localization has progressed further as we have opened up a whole range of distribution channels besides our own Sanrio network. For instance, Hello Kitty products are now available through general merchandise stores, department stores, drugstores, and other retailers in the United States.”

Along with this proactive expansion of distribution networks, collaboration via licensing provision is also being carried out. The licensing business adopts the strategy of synergistic development of the Hello Kitty brand along with other partner brands, as Hatoyama elaborates:

“Some examples of these tie-ups for Hello Kitty goods include our collaboration with Sephora, which is one of the group companies of the French luxury goods conglomerate LVMH; and with Swarovski, an Austria-based producer of jewelry and cut glass. Our approach is to create products through this collaboration that are then distributed by way of our partners’ sales channels.”

Hello Kitty’s Appealing Spirit

Hatoyama explains how the basis for the Hello Kitty business in the United States dates back to the 1970s.

Hatoyama has been the driving force behind both of those strategies, based on his realization of the great strength of the Hello Kitty brand.

“Brands like Yahoo, Apple, Coca-Cola, and McDonald’s are characterized by their wide name recognition and the number of people who enjoy their products. It isn’t about providing luxury items. From that perspective, I became keenly aware of how Hello Kitty was establishing itself as a global brand soon after the turn of the century.”

The name recognition of Hello Kitty shot up in the United States around 2005, when a promotional video of Britney Spears featured her wearing Hello Kitty jewelry created by the fashion designer, entrepreneur, and former model Kimora Lee Simmons.

“These efforts reflect our approach of having Americans design products intended for Americans, rather than offering Japanese products,” Hatoyama explains. “We had faced a difficult situation despite our brand power and high name recognition in the United States in that there were cases where the supply of Hello Kitty products did not meet demand, and other cases where the products that were available were not suited to local consumer tastes. We studied those situations and were able to come up with the needed changes.”

“Our first step was to make use of powerful distribution networks, such as those of general merchandise stores or of Toys ‘R’ Us, in order to expand our sales channels. It was necessary, for example, to offer a wide array of products, such as party goods for children’s birthdays, gift items, and school-related goods.”

The driving force behind the overseas market expansion has been the core concept of Hello Kitty developed over its 40-year history, centered on the spirit of “Cuteness, Friendship, and Thoughtfulness.” This spirit has struck a chord with people around the world to create a strong brand identity.

“The business initiatives we carried out in the United States from the 1970s to the 1990s in line with that concept formed the basis, I think, for our success in recent years,” Hatoyama suggests.

Designs Best Suited to Each Country

The overseas licensing business for Hello Kitty allows Sanrio’s partners a great degree of discretionary power over design and other aspects:

“It is important for us not to impose our own value judgments on our partners,” Hatoyama says. “There are clear differences when it comes to what product designs Japanese, Americans, or Europeans might prefer. Allowing leeway for those differences in taste makes it possible to come up with the products best suited to a given market, thereby expanding our market presence. We think it is vital to allow each country involved in product licensing to have the freedom to foster its own products.”

Sanrio entered an agreement with the 30 Major League Baseball teams for licensing of Hello Kitty goods. This photograph shows some of the products created in collaboration with the Los Angeles Dodgers.

Hatoyama elaborates on what he considers to be some characteristics of innovative licensed products:

“A lot of the innovative examples come from our collaboration with fashion brands. One particularly innovative brand that we have worked with recently is Undercover, designer Takahashi Jun’s brand. We have undertaken all sorts of very interesting product development, ranging from our collaboration with leading global ‘fast fashion’ brands like Sephora, H&M, Forever21, and Marks & Spencer all the way to our tie-ups with small-scale innovative brands. Since Sanrio does not specialize in fashion, we provide the ‘foundation’ and then let our partners handle the planning and design. And it seems to me that the outcome has been some fantastic products.”

  • [2014.12.24]
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