From Licensing to Creating: The Shift Toward Original Characters

Japanese Character Goods Market Hits All-Time High
Character Advertising Usage Continues to Decline
Korean Brands Shift Focus to Original Characters

The consumption and advertising of characters are moving in different directions. While characters are increasingly embedded in everyday life and expanding the market, their presence at the forefront—especially as main advertising figures—is actually diminishing. This divergence is also being observed in Korea.

Hot Chicken Flavor Ramen Mascot 'Hochi'

According to the report "Trends in the Japanese Character Industry: Characters as Lifestyle Infrastructure," recently published by the Korea Creative Content Agency Tokyo Business Center, this trend is becoming more pronounced. Last year, the Japanese character merchandise retail market grew by 3.2% year-on-year, reaching 1.74 trillion yen. In contrast, the number of character-featured TV commercials was 2,356, and promotions using characters totaled 944, each declining for the second consecutive year. This stands in stark contrast to total advertising expenditure in Japan, which hit a record high for the fourth consecutive year at 8.0623 trillion yen.

The driving force behind this market growth is 'Oshikatsu,' an activity where fans enthusiastically support their favorite subjects by investing their time and money. This phenomenon, which surpassed the boundaries of otaku culture, became so widespread that even the Bank of Japan mentioned it in its official economic report. The Millennials & Gen Z led this trend, expanding Oshikatsu from something done at home to external consumption such as travel and dining out, and spreading "show-off" consumption by sharing these experiences on social media (SNS). The rise of 'small but certain happiness' (Sohwakhaeng) consumption, combined with the return of inbound tourists due to the weakness of the yen, has driven five consecutive years of growth beyond pre-pandemic performance.

As the base of Oshikatsu widened, the makeup of characters in the market became more diverse. Alongside steady sellers such as Sanrio, the emergence of handmade goods like beadwork and embroidery, as well as characters created by individual artists or originating from SNS, expanded consumer options in apparel and stationery. Notably, characters developed by independent creators performed strongly, resulting in 17.6% growth year-on-year in the "original" category among the top 100 characters.

Jjanggu Popup Store On Site.

Within this trend, the role of characters has shifted from "possession" to "function." Whereas character products were previously used mainly for carrying around or decorative purposes, since last year, characters have been endowed with specific functions in daily life such as storage, fragrance, hygiene, sleep, and cooking. Bath bombs and hand creams that express character worldviews through scent are prime examples. The practice of purchasing entire lifestyle sets—like storage cases, towels, and mugs—all within the same character theme ("universe-unit purchasing") has also become more prevalent. Kim Seungmi, head of the research team at the Management Planning Division of the Korea Creative Content Agency and author of the report, explained, "As characters are increasingly functioning as elements that enhance the value of practical goods, they are becoming the main motivation behind purchases."

The situation in the advertising market, however, is markedly different. The rate of commercials (CM) featuring characters fell from 17.0% in 2021 to 13.4% last year. The number of promotional uses dropped for the second consecutive year to 944 in 2023, down from 1,036 the previous year. Experts point to the lack of mega-hit characters as a primary cause. While rankings remain stable, with "Pokemon" and "Anpanman" securing the top two spots for five consecutive years, there have been no new breakout hits that capture advertisers’ attention.

Nevertheless, the ways characters are utilized have become much more sophisticated. Instead of simply recreating iconic scenes from original works, the mainstream approach is now the "light collaboration" model, which subtly weaves character personalities and worldviews into products. In addition, rather than relying on major intellectual property (IP), more companies are developing their own brand characters or original animations to nurture character worldviews over the long term.

Lotte Homeshopping mascot Bellygom.

This trend is also apparent in Korea, where examples of prioritizing original characters over external IP are increasing. Lotte Homeshopping, for example, gained attention by installing a 15-meter-tall sculpture of its own mascot, Bellygom, in the plaza at Lotte World Tower in Jamsil, Seoul. Samyang Foods has positioned its original character, Hochi, as the advertising model for Hot Chicken Flavor Ramen. The main reasons behind this pattern are cost and risk management. Concerns about royalty burdens when licensing external IPs and the risk of weakening a brand's unique identity by over-relying on specific characters have driven brands to cultivate their own characters.

The key issue is how to leverage these characters once they are secured. Kim emphasized, "Advertisers need to go beyond simply borrowing popular IPs and meticulously design which character can support what value at which consumer touchpoint." She added, "As the influence of SNS fan communities continues to grow, collaborative creation strategies—such as participatory campaigns or providing limited-edition character voice content—will become increasingly important."

This content was produced with the assistance of AI translation services.