There are 13.1 million Asian-Americans and they’re growing in purchasing power. If that’s not a big enough reason to cozy up to them, here are a few others.
- They’re affluent. Asian-American households are more affluent than any other population segment in the United States. Their median household income is $56,161—26 percent higher than average and about 15 percent higher than non-Hispanic white households, according to a 2006 report by the market research firm Packaged Facts. In fact, Asian-Americans have the most discretionary income of any ethnic group in the United States. They’re also highly educated. Just under 50 percent of Asian-Americans have a bachelor’s degree or more, compared to 27.7 percent for all Americans, according to the U.S. Census Bureau. And they’re more likely than any other group to work in managerial and professional jobs, according to Packaged Facts. The entrepreneurial energy and upward mobility of Asian-American households makes them natural targets for restaurants of all kinds. “There is a certain Asian group that has a luxury profile,” says Elcid Choi, vice chairman of GlobalHue Asian, a Michigan ad agency. “They like big-ticket items, big brand names, expensive bottles of wine.” But statistics can be misleading. Rather than being one monolithic group, Asian-Americans are highly diverse, with distinctions ranging from language to country of origin to educational achievement. Just because your region is home to a lot of Asian-Americans doesn’t mean they’ll be a logical target for your marketing efforts. “There are some Asian-American groups that are at the poverty level,” says David Morse, a principal with New American Dimensions, a Los Angeles market research firm. “Generally speaking, the Hmong and Cambodians have very low levels of educational attainment and income, while the Vietnamese are a very bifurcated market; the more recent folks who came here under the Family Reunification Act simply do not have the money to spend on dining out.” So, as in all your marketing, it’s important to know specifically whom you’re targeting.
- They’re growing in number. Between 2000 and 2005, the Asian population in the United States grew 19.8 percent, according to Packaged Facts. Morse says there are expected to be 34 million Asians here by 2050—more than 2.5 times the current population. Currently, much of the population growth is driven by immigration. Morse notes that 80 percent of Asian-Americans age 19 and over are foreign born, while 79 percent of those under age 19 were born in the United States. Over time, Morse expects growth from immigration to slow somewhat in comparison to growth in the U.S.-born population. The end result of the current growth pattern is that children tend to be cultural ambassadors to their parents. “If there are children under 18 in the household, they’re likely driving the decisions about where they are going to go out to eat,” says Saul Gitlin, executive vice president at K&L Advertising, a New York agency that focuses on Asian-Americans. “Even if they speak their native language at home, the children are being impacted by mainstream marketing and culture by going to school and consuming mainstream media.”
- They’re under the radar. In part because of the Asian-American market’s fragmentation, few operators have targeted this group successfully. Gitlin notes that Wal-Mart, McDonald’s, Burger King and some supermarket chains have done what’s called “in-language” advertising, meaning ads in the target group’s language of choice, over the years. But, adds Morse, “So many companies are looking for the next segment, and Asian is it.” Morse says banking and telecommunications companies are already onto it, pointing to Chase Bank developing a Mandarin- and Cantonese-language TV ad campaign last year. “But if you’re looking at the restaurant business?” he says. “They’ve barely begun.”
- They respond to advertising. Compared to U.S. adults as a whole, Asian-Americans are much less likely to say that advertising is a waste of time, according to Packaged Facts. Plus, Asian men are far more likely than the average American male to say that ads help them learn about products in the marketplace. However, says Morse, “Anyone who tells you Asians are brand-loyal is telling you a fib.” In Morse’s experience—his firm has worked for Kraft Foods, KFC, Pepsi, Citibank and other major retailers—East Asian consumers including Chinese, Japanese and Korean shoppers are very price sensitive, as well as being quite receptive to promotional offers. “That’s a good thing because you can get them in the door,” he says. “But it’s a bad thing because they’re not very loyal.” The added benefit of advertising to Asian-Americans is that, by and large, they are very geographically concentrated. Morse notes that 45 percent of all Asian-Americans live in California and New York; in fact, 37 percent of them live in just three cities: Los Angeles, San Francisco and New York City. While media buys in these cities won’t be cheap, at least you won’t have to blanket an entire region—let alone the whole country—in order to reach a critical mass.
- They like to try new foods. A recent report by Mintel, a market research firm in Chicago, found that Asian respondents were more likely to try new food at least once a week than whites, blacks and others. Mintel also found that Asians are more likely to try a new restaurant or bar on a weekly basis than are people of other races. Like many multicultural groups, however, Asians place a strong cultural value on family meals. Gitlin notes that mainstream families tend to figure out meals on the spur of the moment. “In Asian immigrant households, you’re less likely to find them winging a meal, which might lead to a decision to eat out,” he says. “We are dealing with people who like to go out to eat, but it might tend to be more planned.”
19.8% Asian-American population growth between 2000 and 2005
34 million Projected Asian-American population in 2050
80% Asian-Americans age 19 and over who are foreign-born
95% Asian-Americans who live in metropolitan areas
35.1% Asian-Americans who live in California
10 Number of ethnic sub-groups making up the Asian-American population
48.2% Asian-Americans with a bachelor’s degree or more, compared to 27.7% of all Americans
$25,786 Average per-capita income of Asian-Americans, compared to $24,020 for all Americans
$528 billion Projected Asian-American spending power in 2009
73% Asian-Americans who shop at ethnic food markets