Hello Kitty – The Iconic Japanese brand

Created by Sanrio Ltd, founded in 1960 by Shintaro Tsuji, Hello Kitty is one of the truly phenomenal
brands to emerge from Japan. For over three decades, this simple mouth-less cat of sparse lines and a
bow has mesmerized children, youngsters and grown ups alike across Asia, Europe and the Americas.
In the US alone, Hello Kitty has expanded into 4000 stores nation wide with more than 200 Sanrio
specific shops. Created as a gift item to be exchanged between families, Hello Kitty now adorns more
than 22.000 products across categories and contributes more than half of Sanrio's USD 1 billion
annual sales.

Much has been discussed about the endurance of this iconic brand over the decades. So popular is
Hello Kitty that Taiwan's second largest airlines, Eva Air, decided in October 2005 to use the Hello
Kitty brand on flight routes between Taipei, Tokyo and Fukuoka. By paying Sanrio a franchisee fee,
Eva Air has dedicated an entire Airbus A300-200 to the Hello Kitty brand and its cutie-like universe.
Everything from the aircrafts exterior, boarding passes, flight crew uniforms and the interior are held
in the Hello Kitty theme. The special Hello Kitty plane is booked more than 90% on average - a
healthy occupancy rate for an airline.

A range of Hello Kitty duty-free goods are available and hugely popular with the fans of the brand.
This demonstrates the enormous popularity that Hello Kitty enjoys even after decades of existence.

There are many reasons for Hello Kitty's popularity. Unlike many of the Disney characters and other
popular cartoons that emote and develop a distinct personality, Hello Kitty is a rather boring cartoon
figure. It does not even have a mouth to talk. Hello Kitty's Zen-like calmness and faceless expression
are the major reasons for its appeal across age groups and markets.

One of the important factors that differentiate Hello Kitty in the world of cartoons and characters is
that Hello Kitty is not alive with stories, gimmicks and pre-determined personality before it reaches
the people. By being a simple cartoon with very minimal characteristics, the Hello Kitty brand actually
acts as a canvas upon which people can decorate with their own embellishments, thereby
personalizing the cartoon, giving it a unique personality and internalizing the cartoon into their lives.
This simple yet powerful differentiator set the Hello Kitty brand apart from competitors.

Another reason for Hello Kitty's consistent popularity over the decades has been its ability to change
and keep up with the times. Instead of treading the path of consistency and standard design usage, a
brand that constantly changes in response to the needs of the consumers and of the society at large,
will have greater chances of becoming an icon. Hello Kitty has followed that path. Though the simple
sparse lines and the bow is a constant, the cartoon has many versions, many colors, many characters
that are related to Hello Kitty and a diverse set of products which carry the brand logo. These reinforce
the excitement about the brand and allow people to develop a loyal collection of Hello Kitty branded
items.

Asian consumers express almost fanatical devotions to the Hello Kitty cartoon character and brand.
Hello Kitty has its own theme park in Tokyo, which is a huge success among the Japanese, Chinese
and Taiwanese. Many Hello Kitty products also have become valuable collectibles - some items are
valued at thousands of dollars and sold at eBay and other similar auctions. The marketing scarcity
principle is employed strategically so every new item is only produced in smaller numbers and new
Hello Kitty products are displayed regularly across all global stores luring consumers to add those
items to the collection.

As with many iconic brands that have had long-term success only to fade away gradually, Hello Kitty
too has shown some brand fatigue in its native Japan. With the emergence of electronic gadgets,
games and Internet, children and teens are more lured by the visuals and sounds of these new
channels than the simplicity and purity of a mouth-less cat. It would be a great challenge for Saniro to
maintain the brand popularity of Hello Kitty. Only time will tell whether the meow of this speechless
though iconic Japanese cat will be heard in the coming decades - but the current brand equity of Hello
Kitty serves as a solid business platform for the future.

As Hello Kitty is featuring strongly in our Great Asian Brands survey, let's have a closer look
at how strong this brand has become - proof that you can brand anything.

Hello Kitty is an idea based on a cartoon character of a small cat that looks kind and cute,
with a button nose, two black dot-yes, six whiskers, and a ribbon or flower in her hair. The
cat has no mouth, and this represents a major source of emotional association for buyers, as
they can project many different feelings onto the little cat. The owner and the cat can be
happy, sad, thoughtful or any other feeling they want to be together.

Hello Kitty is actually 25 years old but has perpetual youth. For Japanese company Sanrio
Co, a stationery producer, she has become a major brand success, multiplying profits in the
financial year ended March 31, 1998 by thirteen times-during a recession! Adored by many
demographic segments of the market, Hello Kitty's main target audience, as expected, is
children, but Sanrio says it has now successfully extended the brand to teenage women from
above 20 years. Hello Kitty has become an icon with global appeal. As the girls, who first
bought her when they were young, grow older, they nostalgically buy Hello Kitty products as
adults. There are Hello Kitty tea sets, toasters, mobile telephone cases, erasers, motorcycles,
mouse pads, spectacles, and other products. For bedtime, there are Hello Kitty pajamas and
bedsheets. The company apparently adds 600 new products a month to the 15,000 items or so
already available. Hello Kitty has taken Asia by storm, and has over 40 stores in the U.S. with
subsidiaries in Brazil and Germany.

Sanrio runs Hello Kitty cafés in Japan, and has started to franchise theme restaurants, the first
of which is Maxim's Caterers Ltd in Hong Kong, with more to follow. Franchises in Seoul
and Taipei are also on the horizon. Apart from these brand extensions, Sanrio intends to
introduce new cartoon characters including a hamster and a rabbit.

Financially, the brand has been phenomenally profitable, even during the recession. Recently
the brand has become a target for co-branding, but in some cases - such as the co-branding
exercise with McDonalds in Singapore - Hello Kitty eclipsed the brand partner, with
thousands of people buying burgers and then throwing them away but keeping the Hello Kitty
promotional items.

Brand strengths: clear understanding of segment needs, application of these to brand

extensions, brand consistency
Hong Kong - To celebrate its 35th Anniversary, Sanrio has partnered with All Rights Reserved to launch a mini theme
park called Hello Kitty Lab, which is sponsored by companies such as Sony Ericsson, Dah Sing Bank, Chow Sang Sang
and Octopus to collaborate in cross branding efforts.

Caroline Tsang, deputy general manager for Sanrio Wave Hong Kong, said Hong Kong is the second biggest retail
market for Hello Kitty merchandise in Asia after Japan.

She said the Hello Kitty brand is versatile and enjoys a wide demographic as its available from baby to adult products
such as vacuum cleaners, cars, computers and toasters.

The cat that first appeared on a coin purse in 1975 has now penetrated into the celebrity, fashion and technology
markets with plans to enter into luxury as well.

For Hello Kitty Lab, Sanrio aims to capture core consumers between 18 to 35 years old from families, teenagers to
couples. Tsang said Kitty Lab is not a "girly type of event" and will appeal to the male segment too.

Judging from the pre-booked ticketing trend, the company anticipates a 20% increment from last year's  "Bright
Wonder" event that attracted more than 70,000 people.

SK Lam (pictured), creative director for All Rights Reserved, said the annual Hello Kitty event started five years ago
as an exhibition at the Hong Kong Arts Centre but it was last year that they created it into more of a theme park
style event using Rfid technology.

The creative workshop is responsible for the design and concept of Kitty Lab, which allows visitors to play games in
each of the themed stations and create their own Kitty ID known as the KTA.

Lam said cost of the Kitty Lab project is worth more than $10 million, which the company aims to break even.

How he aims to make money from this project is to sell the licensing rights of this Hello Kitty event to investors in
Asia Pacific. He said some countries have already shown interest.

In addition to the interactive stations, there will be a section where Hello Kitty merchandise are sold, from T-shirts,
recyclable bags to thumb drives.

This year, a Hello Kitty iphone case is also available, which Lam proudly shows it off on his handset.

As sponsors such as Sony Ericsson, Chow Sang Sang, McDonald's, Octopus and Maxims are doing their cross promotions
to push Hello Kitty Lab, Lam said he did not have to embark on a marketing campaign to raise awareness of the
event.
Local magazines and newspapers were eager to approach him to write features in the lead up to the event that
will launch later this week.

A Facebook fan page that he set up a month ago has attracted close to 19,000 fans locally.

To celebrate its 10th Anniversary, MSN has also co-branded with Hello Kitty for the first time and launched a mini-
site that offers games, emoticons and wallpapers.
_______________________________________________________________________________________

ANS Exclusive Interview: Hello Kitty 30th Anniversary

By: Jonah Morgan

The Year is 1974, the current anime and manga fueled Japanese character industry in America is 20
years away. A company in Japan named Sanrio begins marketing items with the character graphic
of a cute white cat. In 1976, Hello Kitty appears in the USA....... licensing you ask?? what's that?
Sanrio brings Hello Kitty here..... entirely on it's own. Today, we're taking it back to the old
school, 30 years ago, when Sanrio in Japan (www.sanrio.com) first introduced the Hello Kitty character into it's product
merchandising line. The move marked the birth of a global character icon 30 years later which is synonymous with cute
and cudley.

Sanrio itself was started in Japan in 1960 when President and CEO Shintaro Tsuji founded the company. Traditional
Japanese greetings call for the common exchange of small gifts and the firm's first products were stationary, little purses
and other inexpensive items designed for exchange. In '76 when the first Sanrio stores appeared in the U.S. city of San
Jose a store devoted entirely to one line of character based prodcts was unheard of. Today, there are over 300 Sanrio
boutiques in the western hemisphere, with 120 in malls across the USA. In addition, Sanrio products are available in
department stores and retail outlets such as Target.

From the perspective of being introduced to Japanese characters via games and animation, what Sanrio has been able to
do with Hello Kitty has always been a curiostiy for me. There's definetly some relation there....... but it's hard to qualify.
Hello Kitty is almost in a league all it's own. If you think of manga type characters as cars on a road, every so often one
passes another in popularity, switching lanes and merging back into the traffic lane. To fit Hello Kitty into the analogy, it
wouldn't even be on that road, it would be a bullet train on a track next to the road doing about 200 mph. Part of the
curiosty lies within how Hello Kitty is marketed. Unlike anime, manga or video game characters that spin off from
media into product lines, Sanrio's characters begin their own existence as retail products. Becuase they are not tied to a
definitive story line the customers can - and do - project their own feelings and emotions onto the characters.

To help explore the fascination with Hello Kitty over 30 years we recently spoke to Sanrio's marketing director Bill
Hensley:

1. This year marks the 30th anniversary of the Hello Kitty brand for Sanrio, could you tell us Sanrio's brief thoughts on
this milestone?  
Hello Kitty's 30th Anniversary offers us an opportunity to look back at 30 years of great Hello Kitty
design that has led to her pop icon status. More importantly, to look forward to more great design in
the future.   

2. Across Sanrio's Global Holdings how vital has the American market been to the Hello Kitty brand and
ultimately Sanrio's success?  
 The American market still represents a minority share of Sanrio's global revenues, but it represents
the fastest growing Sanrio market.    

3. Can you give us an estimate of how many unique product offerings related to Hello Kitty have been marketed in the
USA since the 1976 debut? 
Just an educated guess - In Hello Kitty's history, somewhere between 50,000 and 100,000 unique
products have been marketed in the US.   

4. The Japanese character industry has been increasing in it's popularity in the American market in recent years. This
has come about in the form of Anime, Video Games and manga all being localized for the market and the underground
movement of fans who directly import character goods into the country. It's kind of funny, I've always seen Hello Kitty
and Sanrio as existing outside of this sphere of influence that is commonly associated to Anime's boom here
which began growing in the 1990's. Has Sanrio watched this phenomena and how has it affected your company's
approach to marketing Hello Kitty given it's Japanese roots? 
 Sanrio is a character brand developer and designer. We're happy that many fans of Anime are also fans
of Hello Kitty or other Sanrio characters, but the Anime phenomenon has not affected the way we
develop and market the Hello Kitty brand.   

6. You have many special events planned over the coming months for the 30th anniversary of Hello Kitty, can you tell us
if any special Japanese guests associated with the creation of the brand will be attending or coming to the USA? 
We were pleased to have Ms. Yuko Yamaguchi, Sanrio's chief designer for the Hello Kitty brand, join us
at our official Anniversary Kick-Off event this past June at Rockefeller Center in New York.    

7. Besides Hello Kitty, how are Sanrio's other character brands performing in the USA market? 
Hello Kitty is obviously the star, but other characters in the Sanrio family are showing their strength.
Most notable is Chococat, who is red-hot is our boutique stores.   

8. What's coming up on the horizon for the next 6 months to 1 year for Sanrio? 
At least 100 to 300 new items each month, plus new characters as well.