Working with Sanrio Digital (ala Hello Kitty and Friends) over the last few years has been an enlightening, if challenging, experience. There is nowhere Kitty can’t go, especially when it comes to the digital realm, and as such, there are a lot of lessons to take from how Sanrio’s Hello Kitty brand business works.
Along with this line and as a starting point, I thought I’d share this “oldie, but goodie” video from Yat Siu, CEO of Sanrio Digital Hong Kong that I thought gave a great summary and perspective of the Asian market.
Ok ok, its kind of lame to just reference someone else’s presentation, but hey, I bet most haven’t seen it and it is definitely worth watching for those a bit green to the Asia market.
Most importantly, it is a perspective from a “local insider” as opposed to that which is often only gleaned from “outside” the Asian wall-garden. That is, I would make this is a must see for those in business or interested in the broad strokes of the Asian market (and a Sanrio of course!). Yat is spot on with many of his broad stroke views, IMHO.
(Side note: Maybe I take for granted what is “obvious”… but is it just me, or is the moderator very, very annoying and interrupting with bad questions and jokes when Yat is making good points? I’m really asking. heh)
Anyway, enjoy! I welcome any follow-up questions and comments, disagreements or amendments anyone wants to throw in…^^
Yat Siu, CEO SANRIO DIGITAL (Hong Kong)
Brand Presentation at Zeitgeist Europe
Here are the cliff notes:
- Common error: “Westerns” tend to group “Asia” as one market.
- “China is not one market. Asia is even less so.”
- Gen Demographics:
- Most of the world internet users are in Asia (more than N. America more than Europe).
- Almost 50% of world’s broadband is in Asia
- US about 30% broadband penetration
- TREND SETTERS: Korea, Japan and then China.
- S. Korea 70% internet penetration and almost all of its broadband. Leads in advanced gaming and mobile development.
- As such, Korea (E.Asia) generates a lot of content and is youth or game related/oriented content.
- China: over 1.3 billiion people, 137 million online (10% penetration), only 5% on broadband.
- End of the year will have most internet users in the world.
- Eventually, will have largest broadband usage and have many driving engines for new ideas and trends
- ASIA is a very YOUNG demographic online because of culture, revolutions, politics, past, wars… exception of Japan, there are no aging issues yet
- not only young…but FAST connections. 10mb – 1 gb/sec home use! (10x N.America)
- HelloKitty demographics are not just kids. However, products range from make-up to Xbox (digital), to handbags, to jewelry to cars to airlines, etc.
- Asia culture will start to influence Western scene more and more. So shouldn’t be ignored
- Target demographics 9-11yrs old, to 30yrs, and 10% in 50-60 yrs
- Online gaming is big for Sanrio. Very social game.
- US mostly subscription based
- Asia is almost all item based (buy others gift or decorate their IDs)
- MMORGs social and fun.
- User generated products. Vote on the products and if they get enough orders then they actually make it.
- Games are a lifestyle…up to 15 hrs a day. It’s not about winning, but social interaction. once you “top out” it’s the friends and social aspect that keeps them sticky to the service.
- Broadband is important. Mostly cannot be handled in N.American networks with hundreds and thousands online at one time… 1 mbs won’t cut it.
- Cyber Cafes: uniquely Asian trends. Cafes are social hotspots. Not the clubs.. let’s go to the PC bang.
- Casual Games growing the market.
- Forecast: 6 billion US dollars for gaming market in E.Asia
- The feelings of Digital youth in Asia.
- Asian digital youth is very connected, but also very proud and optimistic
- Proud because the sense of liberty… generation divide is acute.
- Post cultural-revolution in China, post-democratization in S. Korea
- This pride changes the way they think and interact online…
- eg: Korean Renaissance (ie: “Hallyru” / the “Korean Wave”)
- everything Korean is cool
- as such people are getting very proud and turning very nationalistic (as seen expressed online..in games and community sites).
- Haven’t grown up in an environment where things weren’t possible… where adults automatically restrict themselves.
- They think they are cool, where there is no shame in showing off–virtual or physical.
- As such they are more consumer, materialist driven…even more so in Asia by comparison.
- they think of themselves as global and very digitally connected
- Status: Boredom is an issue. Want to take multiple inputs.
- Anecdote: launch and getting people to play is not an issue, but KEEPING them interested is very difficult. Need constant feed of new information
- Point: What kinds of information and in what context?
- eg: China loved spam…cause at least they GOT mail. It was a novelty.
- Thus hard to compete
Traditionally, a lot of Western innovation as come over to the East. A slow and soft infiltration has come to the West. Starting with Sony, PlayStation, embedded devices (everything is made in Asia)…but now we moving away from devices and moving into the culture. (eg. Think about Japanimation 10 years ago and now.)
The infiltration has already started.
It’s interesting seeing this again a couple years later and seeing what’s changed and what hasn’t.
At least for Korea, some of the biggest changes I’d mention are:
Mobile is all the buzz…again. Korea wipi system is gone and it is now about how to open up, and/or how iPhone and Android will or will not affect the market. Its should be fun to see.
Gaming has continued its charge forward… and Korea has been leading the charge on many fronts.
Hallyru (Korean Wave) has tailed back significantly, relatively speaking, from the height of its popularity, but Korean cultural products are certainly still hot throughout Asia. So still time to ride that wave if one is apt to do so. Korean internet business models…less so.
Kyopo cool? hmmm….
The reverse flow of Asian products infiltrating the “West”… it is pretty much a given at this point. From K-pop-culture to Korea business ventures in the USA and Europe, Korea at least has made many more overt efforts towards trying to expand outside the Korean border….with various levels of success.
- Korea Pop-Culture (KPop)
- Games (PC and Online Multiplayer)
- SK fund
- Samsung and LG Electronics (mobile)
- Cyworld Worldwide
- Cheil acquisitions
(to name just a few off the top of my head)