Asian American buying power to hit $1 trillion by 2018

Asian American buying power to hit $1 trillion by 2018

IN one year, Asian-American buying power has increased by more than $50 billion. By 2018, that number is expected to reach $1 trillion, a consumer report says.

In the third edition of Nielsen’s Asian-American consumer report, “Asian-Americans: Culturally Connected and Forging the Future,” the media research company examined the unique consumption behaviors of the fastest-growing and most racially diverse segment of America’s multicultural majority.

Asian Americans represent just 6 percent of the total US population, but posted a growth of 46 percent from 2002 to 2014. From now through 2050, US Census projections state the group is expected to increase by 150 percent.

Divided into three sections, the report revealed details on Asian-American consumption habits related to culture and technology, and the projected increase in buying power.

Asian-American consumption: connected through culture

Among highlights in the first section of the report reveal that:

• Asian-American buying power shot up 7 percent from $718 billion to $770 billion in 2014 and continues to rise.

• Asian Americans have the longest life expectancy – 87.3 years – of any multicultural segment in the United States, resulting in significantly more effective years of buying power. Non-Hispanic whites have a life expectancy of 78.7 years. “When planning long-term marketing strategies, this additional 16 years of buying power should be a true advantage if loyalty can be established at an early age,” the report states.

• Asian Americans outspend total consumers in personal insurance, apparel and housing.

• Twenty-three percent of Asian Americans are more likely to evaluate the nutrition of menu items, 22 percent are less likely to allow junk food in the home and 31 percent are more likely to eat organic foods.

• Fifty percent of Asian-American consumers buy fresh seafood 50 percent more frequently than the general market.

• Asian Americans are 140 percent more likely to purchase a bottle of wine worth $20 or more, 30 percent more likely to spend more than $200 per week at the grocery store and 21 percent more likely to have wine with dinner.

• About 28 percent of Asian Americans reside in a multigenerational household, resulting in a diverse spectrum of purchases based on the age, health and dietary habits of all family members.

A new inclusion in the report was the mindset of millennial Asian-American women, who are heads of their households and discriminating shoppers who desire and demand the best quality while simultaneously searching for value.

For millennial Asian-American women, brand name merchandise is worth the extra cost. Members of this group are also 31 percent more likely to use a manufacturer’s coupon when they make purchases compared to non-Asian-American millennials. While many Asian-American women believe internal health radiates outer beauty, outward appearance remains a priority in which they invest. Asian-Americans spend 70 percent more than their average share on skincare preparation products, 25 percent more on fragrances and 15 percent more on hair care, among other products, the report states.

Trendsetting digital adopters and adapters

The Nielsen report found that Asian Americans own more smartphones, tablets, smart TVs, and other digital devices compared to the general population. They are also more likely than non-Hispanic whites to agree that the Internet is a good platform for banking, shopping and entertainment.

“We are viewing programs that feature Asian-American characters and situations, so it’s no surprise that our community is connected to the content and the content that feature our community,” Betty Lo, vice president of public affairs and marketing at Nielsen, said at a press briefing on Wednesday, June 10 in Los Angeles about the report.

The highest indexing television shows among millennial Asian Americans between 18 to 49 years old include “Fresh off the Boat,” “Hawaii Five-0,” “The Mindy Project” and “Glee.”

“And that … also highlights how we are increasingly becoming more ambicultural consumers. [With the] increasing number of US and foreign-born Asian Americans, they’re able to navigate the American mainstream while toggling seamlessly back and forth between our cultural heritage and roots,” she added.

This section of the report revealed that Asian Americans are watching substantially less live television: 62 percent of those ages 18 to 34 watch live TV, compared to older individuals who watch live 87 percent of the time.

Other findings

• Device usage constitutes nearly 38 percent of millennials’ viewing time.

• Thirty-one percent of Asian Americans are more likely to agree that going online is a favorite activity.

• Thirty-one percent of Asian Americans are more likely to shop online.

• Asian Americans are 29 percent more likely to bank online.

• Asian Americans are 14 percent more likely to agree that the Internet is a great way to purchase products.

A look to the future: exponential growth in numbers, buying power and increased ROI

• Asian Americans are the fastest-growing population demographic in the country and have posted the largest growth in buying power. The group is also more likely to possess a higher level of education – 49 percent – than the total US population (28 percent) – and have more wage earners in their multigenerational households.

• On average, the Asian-American household invests 57 percent more for college tuition than non-Hispanic white households.

• The median Asian-American household income is $72,472, compared to the US national average of $52,250.

• There are 1.6 million Asian-American-owned businesses that contribute more than $500 billion in economic output each year and about 3 million jobs; 10 percent of Asian Americans own a business.

Immigration is the main driver of growth in the Asian American population

China and India became the top two countries for recent immigration in 2013, but younger Asian Americans are primarily born in the United States. Seventy-nine percent of Asian Americans ages 18 and up are foreign born, while 79 percent of those under 18 years old are US born. Asian Americans are most largely concentrated in California, with a population of 6.1 million, where they possess a buying power worth $250 million

Significance of findings

Nita Song, president and chief operating officer of multicultural marketing agency IW Group and a member of the Nielsen Asian Pacific American External Advisory Council, said the report provides data that is critical for marketing.

“Being someone who works in the advertising and marketing industry, reports like this get us so excited because having been in this business for 20 years, we know how lacking data is about the Asian consumer,” she said. “Without data, companies don’t make very critical decisions…”

Lo encouraged those present at the briefing to, if presented with the opportunity, participate in Nielsen surveys in the future.

“I’d like to stress how important it is for our Asian American community to feel empowered and share our opinion so companies and advertisers can really create products and services and messages that serve the needs of our community and resonate with us so that we can feel empowered,” she said.

(www.asianjournal.com)

(LA Weekend June 13 – 16, 2015 Sec. A pg.1)

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