Sanrio's 'kawaii' formula for building global appealーNHK WORLD-JAPAN NEWS

Key Concepts

• Kawaii: A Japanese concept of cuteness, distinct from simple prettiness, appealing to all ages.
• Character Licensing: Granting rights to use Sanrio characters on products and services for a fee.
• Character Portfolio Management: Utilizing a wide range of characters instead of relying on a few popular ones.
• Fan Engagement: Building customer loyalty through events, birthdays, and consistent communication.
• Global Expansion (North America Focus): Increasing market share in North America through licensing.

Sanrio’s Business Transformation Under Suji Tomokuni

This details the strategic shift undertaken by Sanrio under the leadership of President Suji Tomokuni, focusing on stabilizing the business, expanding globally, and leveraging the power of kawaii.

Initial Challenges & Strategic Reorientation (2020-2025)

When Suji Tomokuni assumed the presidency of Sanrio at age 31, the company was experiencing declining sales and profits. A key issue identified was over-reliance on a limited number of characters. The company had previously witnessed instances of characters experiencing rapid surges in popularity followed by equally swift declines, creating instability. Tomokuni’s core strategy revolved around diversifying the character portfolio, moving beyond dependence on individual “hit” characters. He stated, “We don't want that to happen again. Instead of relying on one character, we need to exploit our full range of characters so they all support each other.” This aimed to create a more resilient business model, mitigating risk associated with fluctuating character trends.

Character Portfolio Utilization & Fan Engagement

Sanrio now actively utilizes its extensive roster of over 450 characters. This isn’t simply about creating more characters, but about fostering a system where characters mutually support each other’s appeal. Crucially, Sanrio has prioritized strengthening relationships with its customer base. This is achieved through consistent communication, organizing character birthdays, and hosting promotional events. The goal is to cultivate long-term loyalty and avoid the cyclical “boom and bust” pattern associated with fleeting fads.

Licensing as a Core Revenue Driver

A significant component of Sanrio’s turnaround has been a reinforcement of its licensing business. Licensing revenue now constitutes almost half of the company’s total sales. This involves granting rights to use Sanrio characters on a diverse array of products and services, expanding brand visibility and revenue streams. Tomokuni specifically highlighted North America as a key growth area, noting that Sanrio’s current market share in North American licensing is only 4%, representing substantial potential for expansion. He emphasized, “increasing our share in North America will be our main focus for the company’s growth.” He further stated his certainty that “the licensing business will remain the core of our revenue model in order to make our characters known widely around the world.”

The Essence of Kawaii & Global Strategy

Suji Tomokuni recognizes that the enduring success of Sanrio is rooted in its unique understanding and delivery of kawaii. He defines kawaii as a distinct Japanese aesthetic that transcends simple “cuteness” or “prettiness,” appealing to audiences of all ages. He believes Sanrio uniquely possesses the ability to share this kawaii aesthetic globally. “I believe only Sanio can share the kawaieness among people of all ages,” he asserted. This understanding informs Sanrio’s global strategy, which focuses on creating immersive experiences where customers can connect with their favorite characters. The recent opening of a virtual theme park exemplifies this approach.

Financial Performance & Industry Context

Sanrio posted a record net profit in 2025, demonstrating the effectiveness of the implemented strategies. The video also notes a broader trend: Japan’s content industry is now exporting more value than its semiconductor industry, highlighting the growing economic importance of cultural exports. Tomokuni also noted a “tailwind” effect stemming from the Coronavirus pandemic, though the turnaround was initiated prior to this event.

Synthesis

Sanrio’s success story under Suji Tomokuni is a case study in strategic business transformation. By diversifying its character portfolio, prioritizing fan engagement, aggressively expanding its licensing business (particularly in North America), and remaining true to the core principle of kawaii, Sanrio has not only stabilized its business but positioned itself for continued global growth. The company’s approach demonstrates the power of leveraging intellectual property and building strong brand loyalty in a competitive market.