Asian-Americans: fast growth, deep pockets
Eyeing growth in key demographic groups? Focus on Asian-Americans, who fueled the growth of tech giants by being early adopters, and could similarly drive retail and CPG gains through their voracious media use, their high counts of store visits, large households, and openness to be swayed in store by product assortments, signage and deals.
Nielsen details these behaviors in its recent State of the Asian-American Consumer report. Stores and brands that market to leverage these tendencies could effectively mine this group’s $718 billion in buying power, which the Selig Center for Economic Growth projects to reach $1 trillion by 2017.
Their buying power is soaring from a population rise (up 51% since 2000 to 18.2 million in 2012 and a projected 20.9 million in 2017, a pace slightly ahead of Hispanics and first among multicultural segments), high household incomes (28% above the U.S. median, at $63,420 vs. $49,580), educational achievement (50% of Asian-Americans 25 and older graduated college vs. 28% of this age group nationwide), and frequent living in nuclear households of 3.1 people vs. the 2.6 U.S. average. Food and beverage marketers can easily reach Asian-American residents cost-effectively through various media (more use multiple digital screens to watch programs and videos) because their population is concentrated within a small number of direct-market areas.
Almost 40% live in Los Angeles (14.2%), New York (12.7%) and San Francisco (10.6%). The rest of the top 10 Asian-American population centers are Honolulu (4.1%), Chicago (3.7%), Washington, D.C. (3.6%), Seattle-Tacoma (3.1%), Sacramento (2.8%); Houston (2.7%) and Philadelphia (2.6%), states Nielsen Pop-Facts Premier, 2012 update.
Marketers seeking to influence the Asian-American populace should understand that 77% speak a language other than English at home—and that Asian-language media outlets soared more than tenfold to 1,239 between 1999 and 2010, according to IW Group. Also, 70% own smartphones vs. 55% in the U.S. overall—and they surf online 80 hours per month, more than any other group, adds Nielsen. Most soak up television content too, especially American Idol, The Office and Modern Family shows.
Asian-American shoppers are less likely to plan their food and beverage purchases than non-Hispanic Whites—they don’t use lists or clip coupons nearly as much. Instead, they respond to what they see in-store—the product assortments, signage and deals—and wind up spending 32% of their food dollars on deal vs. 26% among non-Hispanic Whites. They tend to spend more on fresh produce and other healthy foods. Specifically, they index high on dried vegetables and grains (274 where 100 is average), baby food (203), refrigerated juices and drinks (152), fresh produce (139), snacks with dairy dips (137), yogurt (128), pasta (127), dried fruit (127), shortening and oil (126) and soup (124), reports Nielsen Homescan for the 52 weeks ended December 31, 2011.
They achieve this on 152.1 average annual shopping trips per household, with an average basket of $45.70 vs. 149.0 trips and a $46.90 average basket size for non-Hispanic Whites, the Homescan data show.
Asian-American growth is fueled by steady immigration rather than native births. According to 2010 U.S. Census data, 87% of the Indian populace living here is foreign-born, compared with 84% of Vietnamese, 78% of Korean, 76% of Chinese, 69% of Filipino, and 32% of Japanese.