Asian American Buying Power Skyrockets

By Mary Tablante

Marketers now have another reason to target the Asian American community. AAPI buying power is up 523 percent since 1990, and will reach $718.4 billion this year, according to a recent Nielsen report. The reason for the surge is a combination of our increasing population and cultural characteristics.

The Asian American segment of the United States population is growing faster than any other multicultural group. Although the DC area does not have as large an Asian American population as Los Angeles or New York, AAPI numbers are rising here, too. In the Washington- DC- Maryland area, the Asian American population is 653,670.

Beyond the raw numbers are demographic and cultural aspects which make Asian Americans attractive to advertisers. Though the population is diverse, a Pew Research Center study last summer found that many Asian Americans share common values regarding family, marriage and education. They are more likely to be married and achieve advanced education than other groups. As a result, the average income of Asian Americans is 28 percent higher than the total United States median income. And these factors play a part in how companies and marketers target the Asian American demographic.

Siba Samal of University Park, Md., who is the associate dean for the University of Maryland’s department of Veterinary Medicine, agrees that Asian Americans have common values regarding education and family, tend to work hard and have the drive to succeed. He also describes the group as tending to be smarter with money and investing.

“[Asian Americans] are more careful in investing and managing money … because [some] come from a poor background. The ones who are dedicated come here to make it, and know the difficulties. . . they are focused and do well to compete,” he said.

In the greater DC metro area, there are about 189,390 Asian American homes with a television, which is still a powerful marketing tool to reach large groups of consumers. But Asian Americans are also more likely to be tech-savvy, according to the Nielsen report, which states they visit computer and consumer electronics websites 36 percent more often, and visit 84 percent more pages, than the general population.

Yanjin Zhang of North Laurel, Md., is a first generation Asian American who came to the U.S. in 1993 as a graduate student. He contends that marketers should take the opportunity to target the demographic even more than they do currently.

“There are many Asian people in this area [and] advertisers need to be diverse,” Zhang said. “Many companies are run by foreign-born presidents … many of my friends work in companies as scientists and managers.”

Though Zhang said that while he does not believe he is influenced by TV commercials, he notes his two children often ask him for the toys and items they see on TV. Zhang and his wife went shopping on Black Friday, the big sale day after Thanksgiving, and bought clothes, shoes and electronic products which included a laptop computer and a tablet. He also owns a Nexus 7 tablet.

The Nielsen report has some startling conclusions: If Asian Americans were a country, they would constitute the 18th largest economy in the world. Asian Americans tend to make more frequent grocery trips and buy healthier food. They are less likely than their white counterparts to make shopping lists or clip coupons. Based on this information, Nielsen suggests that retailers attract the demographic by offering more in-store deals and providing fresh produce and other healthy products. Asian American consumers typically spend more than the average U.S. household on housing, food, education, vehicle purchases, public transportation, furniture, footwear, clothing, pensions and insurance.

Locally, Fairfax County, Va.’s data about Asian Americans mirrors that of Nielsen’s national findings. The Asian American population in the county rose to 17.4 percent in 2011, up from a mere 0.5 percent in 1970. Asian Americans are now the largest minority group in the county, and own the most firms (18,915) of any minority category.

Fairfax County’s Asian community has a slightly higher level of educational attainment than the county average. According to Fairfax County’s Economic Development Authority, 61.9 percent of Asian Americans 25 years or older have a bachelor’s degree or higher. The county average is 59.3 percent. The 2011 median Asian family income in Fairfax County was more than $100,000.

Although the Asian American community is diverse, trends about Asian American consumers are similar both nationally and locally, suggesting that marketers could profit from finding ways to appeal to the community.