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MBPT Spotlight: Nielsen Report Offers Roadmap to Asian-American Buying Power

Everywhere you turn there are articles about the impact of the Hispanic consumer on marketers, but much less focus has been placed on Asian-Americans.

Nielsen recently released a new report that offers up Asian-American demographic data and also talks about the importance for marketers to target this group.

"As China and India have replaced Mexico over the last two years as the largest sources of recent U.S. immigrants, and immigration from other Asian countries has increased as well, the importance of understanding the Asian-American consumer has never been more critical to marketers across all industries," the report says. "Their status as early adopters with outsized influence on the American mainstream should challenge companies to attune themselves to Asian-American consumers, even if they have not done so in the past."

The report points out that the Asian-American population in the U.S. has grown by 46% since 2002, and citing U.S. Census projections, says Asian-Americans will be the multicultural majority in the U.S. by 2043.

One of the challenges for marketers is that 79% of Asian-American adults in the U.S. right now are immigrants or foreign-born, so many of them continue to follow cultural traditions from their native countries. But the report points out that as they continue to assimilate into the U.S. population, marketers will need to understand their tastes and expectations so that they can be included in their sales and marketing campaigns.

While the overall spending power lags a little behind Hispanics, Asian-Americans still have considerable buying power as a group. In 2014, the buying power of Asian-Americans totaled $770 billion; however, their total spending on consumer goods is expected to reach $1 trillion by 2018. The report points out that the buying power of Asian-Americans as a group is four times larger than that of the highly coveted U.S. millennial segment.

The report also says that while most Asian-Americans are still concentrated in major urban areas of the West Coast and Northeast, their numbers are growing in the suburbs and in parts of the Midwest and South.

“Asian-American ethnoburbs are springing up throughout the country as high-tech jobs attract a highly-educated workforce to majority multicultural suburbs,” the report says.

As for media viewing habits, while Asian-Americans are not at a high level of TV viewing, the report says, “As live TV time decreases, the multiplatform streaming behaviors of Asian-Americans can be a bellweather for the future of all American consumers.”

And in the area of life expectancy, the median age for Asian-Americans is 87.3 years, highest of any multicultural segment in the U.S. and almost 10 years more than non-Hispanic whites. The speaks to the importance of marketers establishing Asian-Americans as customers at an early age.

“Asian-American households are generally wealthier than the average American household,” the report says. The data in the report shows that the average Asian-American consumer spends more on housing, transportation, food, personal insurance, apparel, cell phones and furniture than does the overall average U.S. consumer.

Asian-Americans eat healthy, the data shows. Some 22% of Asian-Americans are less likely than the general population to allow junk food in the home, while 31% are more likely to eat organic foods. The purchase of fresh fruits and vegetables over-index by 26% and 11%, respectively, over the population at large. Fresh seafood is extremely popular.

Not only do Asian-Americans spend a lot on food each week – an average of $200 – but they also like to drink wine with their meals and tend to buy wine on the higher priced side.

Some 30% of Asian-Americans are more likely than all consumers to spend more than $200 a week on food and 21% are more likely to drink wine with dinner. They are also 140% more likely to buy a bottle of wine worth $20 or more.

In terms of actual spending on particular categories, Asian-Americans spend an average of $46 on adult beverages per store visit, compared to $39 for all consumers. They also spend an average of $39 on health & beauty aids per store visit, vs. $30 for all consumers.  With more young family members, they also spend more on disposable diapers and baby food than the average consumer.

With the Asian-American population spreading out across the country, more mainstream supermarkets are regularly stocking their shelves with products like bok choy, tofu, lemongrass and Chinese broccoli as staples.

One retail segment that has not captured the interest of Asian-Americans is mass merchandise chains. According to the Nielsen data, only 17% of Asian-Americans shop there, compared to 21% of total consumers.

Asian-Americans spend 70% more than the total population on skin-care preparations, 25% more on women’s fragrances and 15% more on hair-care products.

At least right now, Asian-American millennial women are not major buyers of private label merchandise, choosing to brand names. That’s in contrast to American millennial women who are more apt to buy private label goods. However, millennial Asian-American women are 31% more likely than non-Asian-American millennials to use manufacturers’ coupons.

The report says that Asian-Americans are heavy users of credit cards. Some 88% of Asian-Americans own a credit card, compared to 66% for the general population.

As for online usage, Asian-Americans are 31% more likely than the general population to agree that using the Internet is their favorite thing to do; 31% are more likely to shop online; 29% are more likely to bank online; and 23% are more likely to agree that the Internet keeps them in touch with their friends.

Asian-Americans watch much less TV than the general population. They watch on average 89 hours and 14 minutes per month, compared to the general population’s 149 hours and 14 minutes per month. However, they average 41 hours and 23 minutes per month on the Internet, compared to 29 hours and 44 minutes for the general population.

Among the most popular TV shows for Asian-Americans: Fresh Off the Boat, Shark Tank, Hawaii Five-0, Glee, Marvel’s Agents of S.H.I.E.L.D., The Mindy Project, and Vampire Diaries.

In a majority of Nielsen DMA markets, most Asian-American homes have access to Asian language TV and nearly half of those sampled for the Nielsen study who said they watch English-language TV also watch programming in an Asian language.

As for TV commercials, AT&T, Sprint and Microsoft all performed almost two-and-a-half times better than the average ad in terms of memorability among Asian-Americans. Among Asian-American millennials, the most popular ads were for Sonic, AT&T, AFLAC, Sprint, Microsoft, Snickers, State Farm, Hershey’s, H&R Block and Nationwide.

By state, Asian-Americans spend the most on consumer goods in California, followed by New York, Texas, New Jersey, Illinois, Hawaii, Washington, Virginia, Florida and Massachusetts. However the largest percentages of growth since 2002 have been in states like Vermont, Nebraska, Montana, Oklahoma, Iowa, Arkansas, Wyoming and North and South Dakota.

“Smart marketers who understand the outsized influence of the Asian-American population and activate strategies to build loyalty with Asian-Americans will not only benefit from sales within this dynamic consumer segment, but will also find themselves increasingly on the edge of the American maintsream,” the Nielsen report concludes.