Advertisers love the rich, brand loyal, and online AANHPI consumers

Marketers have discovered the lucrative AANHPI market.

Whether it is a house, a car, the latest fashions, a pair of the latest sneakers, the kids' toys, computers or dining out, Asian Americans are prime consumers of goods, food and high-tech gadgets.

The collective buying power of Asian Americans far outpaced other demographic groups over the past 20 years and was on track to reach $1.3 trillion in 2022 before the Covid-19 pandemic hit US shores, according to a recent study by Nielsen, a global leader in audience measurement, data and analytics, shaping the future of media. 

According to the 2020 US Census, among the race groups, Asian households had the highest median income ($101,418) in 2021, followed by non-Hispanic White ($77,999), and Hispanic ($57,981) people. Black households had the lowest median income ($48,297).

The rise in Asian American buying power and their outsize influence on US consumer behavior through online gaming communities and social media make the demographic group an ideal target for marketers for their advertising and publicity campaigns, says Nielsen, 

Higher rates of immigration and higher-than-average incomes were key factors in the rise of Asian Americans' economic strength, according to findings recently highlighted in a series of Nielsen 2020 consumer reports on levels of disposable income among Black, Latinx and Asian Americans.

Asian American women, especially, are featured prominently in the commercials, in the business world, mothers, students and as wives.

Another Nielsen study found that Asian American women were the trend-setters and with various means of influencing, tend to make the major decisions for the family. In other words, they decide what food will be bought, what clothes the kids will wear, what appliances are needed and certainly have a say in where they will live.

The analytics company estimates that prior to the pandemic, the total buying power of Black Americans was on track to reach $1.8 trillion by 2024. Latinx buying power was projected to reach $2.3 trillion by the same year.

Nielsen defines buying power as the collective disposable income a group has after taxes.

The company's researchers used US Census criteria to define Asian Americans as individuals with ethnic origins stemming from countries including Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippines, Thailand, and Vietnam.

The study's authors found Asian American buying power rose a whopping 314% between 2000 and 2019, greatly exceeding the buying power increase of all other racial and ethnic categories over the same period even though they only represented about 6% of the US population at the end of the study period. 

In comparison, the buying power of Whites increased by only 119% during the same span.

Fast-growing populations

The rapid rise in immigrants from Asian countries has played a major role in their buying-power surge, according to Nielsen. There were 24 million AANHPI's living in the United States in 2020, a population increase of 46% over the previous decade.

The total US population grew by only 8% over the same span, according to Nielsen.

 The population of non-Hispanic Whites declined by 1% during that time. The Asian American population is expected to increase an additional 21% by 2025, according to US Census data cited by Nielsen.

Asian migrants first surpassed Hispanics as the largest US immigration group in 2012, according to Pew Research. Nielsen said Asian immigration has increased 91% since 2000 with China, India and the Philippines being the top three sources for Asian immigrants to America.

"Asian Americans represent the fastest growing ethnic group in America," NielsenIQ global marketing vice president Mariko Carpenter told CNN Business during a pair of recent interviews. "Population-wise, we almost doubled."

Higher incomes, high returns

Nielsen's research also shows Asian Americans are overrepresented in high-earning science, technology, engineering and mathematics related fields.

"We have 23% of the working population of Asian American professionals that work in STEM," Carpenter said. "You have 12% in some of the medical fields. We tend to also be in professions that are high income, which contributes to the buying power."

But Asian Americans are also the demographic group that has the biggest disparity in wealth, according to Carpenter and the US Pan Asian American Chamber of Education Foundation. While some subgroups such as Indian Americans earn more than Whites, others such as Burmese Americans are at the opposite end of the wealth spectrum.

The group's president, Susan Allen, said it remains unclear how much damage the Covid-19 pandemic has done to Asian Americans' collective buying power.

A year ago, pandemic-related service industry shutdowns caused the Asian American unemployment rate to rise from 2.5% in February to 13.8% in June, a surge of more than 450%, according to the US Department of Labor.

"Many Asian businesses have really gone down badly," Allen told CNN Business.

 "Those who are owning the restaurants, retail stores, nail salons and the very basic community-based businesses, they are the ones who have suffered greatly."

Outsized influence

Nielsen's report said the rise in Asian American buying power and their outsize influence on US consumer behavior through online gaming communities and social media make the demographic group an ideal target for marketers looking to maximize results for their advertising and publicity campaigns.

"Asian Americans are 21% more likely to use social media to support companies and brands," Carpenter told CNN Business. "We are pace setters when it comes to technology, adoption and really shaping brands."

Products use Chinese New Year to make inroads with profitable Asian American market.

The Lunar New Year is big business in some parts of Asia. Two shoe companies, Adidas and Nike recognize the Asian American market and have produced two rival ads centering around the holiday but an ad for the iPhone11 might qualify for an Oscar.

Chinese New Year is a massive advertising opportunity, whether a business operates in Asia or trying to reach out to America's prized consumer market, the Asian American communities. 

According to Nielsen, Asian American buying power has risen 523% since 1990 to $718.4 billion in 2012. If Asian Americans were a country, they would represent the 18th largest economy in the world, providing a tremendous domestic growth opportunity. Buying power in this demographic is expected to top $1 trillion by 2017.

Focusing on the themes of family and homecoming and avoiding problematic messaging sets you up for success during this two week holiday starting Jan. 25 running to Feb. 5

Nike has released a short 90-second ad for the upcoming 2020 Chinese New Year depicting a Chinese aunt red-envelope tussle, one that generally occurs between friends and family during the festive time of the year. The comic ongoing battle eventually results in a cross-country sprint in which the aunt chases her Nike-trainer-wearing-niece across open land. It’s a pretty original concept coming from the athletic shoe company. 

Adidas has taken a different approach. Instead of story-telling, the ad depends on music video energy, music, hip-hop and traditional dancing, beautiful models and dancers and quick-cuts. Directed by Muh Chen, the ad created by Haomai Advertisement features Chinese performer, Jackson Yee, along with an ensemble cast staging various martial arts and football techniques to a vibrant display and energetic soundtrack.

The video that really grabs you by the heart is the one produced for Apple for its iPhone11 product line. It is entirely shot by Apple's newest generation of its smart phone.

The eight-minute mini-movie titled "Chinese New Year - Daughter" start off with a mother being troubled by criticism that she took her daughter to work as a taxi driver. Throughout the film, scenes switch between older conversations and the present day, showing other conversations in the mother's life.

Towards the end of the film, a family reunion of the three generations takes place in the back of the taxi. It is then revealed to the child the older lady is her grandmother, who made dumplings each year while searching for her lost family.

The concept behind the story was to show how there are big generational differences in China, particularly when it comes to the concept of family. The meaning underneath the film, according to Apple is “no matter how much we all grow apart, humanity has the power to bring us together”.

The film is directed by Theodore Melfi, who directed the Best Picture Oscar-nominated Hidden Figures. Cinematography is by Lawrence Sher, who filled the role for Joker, identified as a "2020 Golden Globe Awards nominated film." Star Zhou Xun is also given a promotional introduction in the opening credits, described as "China's leading actress."

It is made for the huge Chinese market and probably won't be shown in the American market. That's too bad. With the success of The Farewell abd Parasite featuring Asian actors, language is not a problem with US audiences. What's more  important to touch an audience is story and human emotion, something this mini-movie has.

Advertisers slow In tapping into the spending power of Asian Americans

ASAM NEWS

Advertising and marketing spending targeted at multicultural audiences in the U.S. will expand to 6.3% in 2020, yet Asian Americans will only get a small share of that, according to the latest annual U.S. Multicultural Media Forecast report.
The research examined three demographic groups: Hispanic Americans, African Americans and Asian Americans. Marketing Charts indicated that advertising targeted specifically toward these three groups is still far below each group’s relative population share — for example, Asian Americans make up more than 1 in 20 members of the population, but only attract 0.1% total advertising and media revenue.

Benzinga noted that of the nearly $26 billion spent on multicultural media in 2018, Asian Americans were the smallest but fastest-growing demographic, with revenues at $722 million, up 7.0%. African Americans saw revenues grow 6.1% to $7.2 billion, and the Hispanic media segment, which had the largest share at $17.94 billion, up 5.3%.

However, advertisers are starting to notice increasing potential in Asian American-targeted advertising. Nielsen estimated that Asian American spending power exceeded $1 trillion in 2018, and as a particularly tech-savvy group, Asian Americans are adept to using emerging technology and are a prime consumer group for digital advertising.

Multiethnic consumers are the fastest growing demographic in the country, forcing brand marketers to consider the multicultural media market if they “want to accelerate growth and increase overall U.S. market share,” said PQ Media President and CEO Patrick Quinn. “Nevertheless, multicultural media growth has slightly under performed the broader U.S. media industry and it still accounts for a mere sliver of the American pie.”

PQ Media conducted the research commissioned by the Association of National Advertisers (ANA) and the Alliance for Inclusive and Multicultural Marketing (AIMM)…

Quinn added that although multiethnic consumers from these three groups comprise 40% of the total U.S. population, multicultural media investments only attract 5.2% of overall U.S. spending.

The media research company Nielsen indicated that Asian Americans are “50% more likely to use the internet and apps for consumer reviews than the general population,” but Marketing Charts noted that almost one-third of multicultural media spending goes to TV advertising, “a proportion almost twice that of the overall media market (16.7%),” whereas multicultural digital advertising only receives 10% of spending.

Nielsen’s report into the Asian American consumer’s spending journey, titled “Informed Influencers and Powerful Purchasers,” also revealed that Asian Americans are more likely to purchase products based off of recommendations or reviews from friends or family.

“The Asian American path to purchase is affected by a myriad of influences that are heavily rooted in cultural traditions as well as their cross-cultural identity,” Nielsen’s research revealed. “Understanding these drivers of behavior is essential for marketers to exercise empathy and establish real connections with Asian American consumers.”

These insights may be crucial to accessing the Asian American demographic’s vast spending power — insights that brand marketers don’t seem to realize yet.

“Businesses face an imperative to reach these consumers, who wield $1 trillion in annual buying power, in order to drive future growth,” the report concluded.

Asian Americans score highest in internet usage

Asian Americans are heavily linked to the internet and most likely to use smart phones and computers to learn about products and services before purchasing them and then use those devices to tell friends and relatives about those purchases.

For several years in a row, Nielsen surveys have issued reports on the growing influence of Asian Americans in the American marketplace, as consumers and trendsetters. This year's report reinforces those roles.

Nielsen unveiled its "Informed Influencers and Powerful Purchasers" report of the 22.6-million Asian American market, a demographic that it believes “offers unparalleled marketing opportunity for business and brands.”

Mariko Carpenter, VP-strategic community alliances, presented some key findings during a Thursday (May 9) luncheon at the New York Stock Exchange.

She mentioned that Asian-Americans have moved into the national spotlight following success of the movie Crazy Rich Asians, Sandra Oh’s “It’s an honor just to be an Asian” declaration during the Emmys, New York Fashion Week’s first-ever all-Asian runway show by designer Claudia Li and a Hmong-American baby beating out 544K others to notch the 2019 “Gerber Baby of the Year” contest. Asian-Americans also turned out in record numbers during the November election.

Nielsen believes those dramatic cultural touchstones show that Asian Americans are a key force shaping the country's mainstream.

Asian Americans are the fastest-growth ethnic or racial group in the U.S., combining for $1-trillion in buying power. That buying power will grow to $1.3T in 2023, "with a powerful long tail of younger and bigger spenders," says the Report.

Nielsen calls the Asian American group “tech-enabled, digitally vocal influencers with immense spending power, which has risen 68 percent since 2010 (vs. 32 percent for the total U.S.)."

They have the highest level of internet connectivity, connecting to TV through broadband and subscription video on demand faster than the general population, according to Nielsen.

Asian Americans represent more than two dozen countries and are “expert navigators between the influences of the native cultures and those of mainstream America.”

READ the report at www.nielsen.com/AsianAmericans.

Asian Americans' economic impact is greater than their numbers might indicate within the overall American market. They owe their undue influence because of their devotion to their digital devices, says the report.Before looking into this group’s specific tech behavior, it’s important to note just how fast the Asian American population is growing, as well as how much spending power it has—and will have going forward. Notably, Asian Americans have grown in population by 7 million people in the last decade alone, the most of any ethnic or racial group in the U.S. That increase represents a 45% uptick, significantly outpacing the 8% growth of the total U.S. population.

In addition to growing as a demographic, Asian American households are markedly bigger than the U.S. average—17% bigger, in fact. Their greater household size contributes to Asian Americans’ household income. In fact, Asian American households boast the highest incomes of any racial or ethnic group in the U.S.—incomes that have boosted the buying power of Asian Americans by 68% since 2010. And it’s not going to slow down: We expect Asian Americans' buying power to increase to $1.3 trillion by 2023.

Because Asian Americans are so connected, the overall reach of internet-connected devices among them is 22% higher than among the general public. For example, Asian Americans are 21% more likely to watch a video on a computer than the general public and they are 24% more likely to use social media networks on a computer.

Among this demographic, the reach of video on a computer, social networking on a computer, and internet on a computer is 21%, 24% and 15% higher than the average U.S. consumer, respectively.

Overall, 97% of Asian American households have a smartphone and 89% have a computer, out-networking the average U.S. household by 6% and 13%, respectively.

Asian Americans’ usage of internet-connected devices outpaces the average U.S. consumer.  Bearing this out, 87% of Asian-Americans report having made an online purchase in the last 12 months, which is 22% higher than the average U.S. consumer.

“The Asian American path to purchase is a unique journey that’s informed by a rich cultural heritage, as well as the latest advancements in technology,” notes Carpenter in the new report.

As such, Carpenter believes Asian Americans are playing key roles in shaping the next generation of retail and e-commerce trends.

Asian Americans' purchasing habits is a social experience, often depending on recommendations or endorsements of frirends, relatives or review found on the Internet.

• 53% of Asian Americans agree with the statement: “My spouse has a significant impact on the brands I choose,” while 42% cite the influence of their children
• 29% of Asian Americans agree with the statement: “I prefer to buy things my friends or neighbors would approve of” -- 15% higher than the average U.S. consumer.
• 32% of Asian Americans agree they “like to share my opinions about products/services by posting reviews and ratings online.”
• 71% of Asian Americans say they recommend food products,
• 68% recommend automobiles
• 43% say they share their opinions regarding the latest consumer technologies.

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Realtors encouraged to study up on the Asian American homebuyers.

Asian Americans represent a growing purchasing power force in the nation’s housing market, according to new data released by the Asian Real Estate Association of America (AREAA).

During the fourth quarter of 2018, Asian Americans represented the second highest level of homeownership rates by race at 58.1 percent, surpassed only by White households at 73.6 percent. 

The AREAA report also cited Zillow data that found 58.1 percent of Asian-American households owned a home as of 2016 and this demographic’s families earned a median income of $82,627 that enabled them to afford homes worth an average of $541,505, thus giving them purchasing power to buy 85.2 percent of all listings nationwide. 

The highest Asian American homeownership rates are in Riverside, Calif. (70.3%), Washington, D.C. (68.7%), Orlando (67.6%), Houston (67.3%) and Miami (66%).

AREEA also noted that the average loan amount for Asian-American buyers alone increased nearly 40 percent from 2004 and 2017, and this demographic takes out larger loan amounts compared to the average population. In 2017, average purchase loans by Asian Americans were just over $390,000 and average refinancing was at $368,000.

The report points out that Asian Americans are moving out of the traditional coastal communities to all areas of the U.S, particularly the South the Midwest.

"Since 2000, the South has experienced the greatest growth in AAPI populations. With 23% of all AAPI families living in the South, recent trends highlight further growth and expansion will continue in this region," states the report. "Southern real estate markets are especially attractive to AAPI families, with large properties available at competitive price points – AAPIs are relocating to the South like never before."

Tom Truong, AREEA’s 2019 president, noted that Asian Americans “have been relocating across the country, purchasing mortgage products and real estate at rates higher than other ethnic demographics … families are relocating into all regions of the country, including the Midwest and South, in search of homeownership.”

The reports is aimed at reall estate professionals. "Real estate professionals who take time to learn more about the unique needs and challenges of the AAPI community position themselves to provide better service and more value to customers" said Mike Reagan, senior vice president of RE/MAX.

Advertisers crazy over the rich Asian American market

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Liberty Mutual has been running this ad since 2015 featuring actress Midori Francis and her car named 'Brad.'

Have you noticed the number of Asian Americans on television lately? State Farm is launching a new ad campaign targeted at the Asian American market.

Two TV spots have been planned as part of the insurance company's campaign. The new campaign will run in English and across Asian print and digital platforms, “with the intent of generating positive associations that reach a wide demographic of Asian Americans,” a release said.

Whether it's insurance, automobiles, credit cards, homes, fashion, legal advice, financial planning, or smart phones, marketers direct their pitches to the most likely consumers. Advertising agencies are not making a big deal out of inclusion, they're simply practicing good business sense.

The buying power of Asian Americans has reached $986 billion in 2017, and is projected to hit $1.3 trillion by 2022, according to Nielsen. Asians Americans are the least likely group to be promoted to managers in America, according to the Harvard Business Review. That sad misunderstanding or ignorance may be changing. 

Truth is, marketers, those people trying to sell you a product or a service, do extensive studies and make decisions based on data. Marketing to Asian Americans is targetting an audience most likely to buy or use your product.

While Nielsen has been touting the Asian American market the last few years, few advertisers have been slow to grasp reality. Certainly, until Crazy Rich Asians' hugely profitable box office, Hollywood basically ignored Asian Americans either as talent or as an audience.

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Nissan teamed up with Star Wars: The Last Jedi, riffing off of actress Kelly Marie Tran's portrayal of heroine Rose Rico with this Asian American daughter learning how to drive.

Claritas, LLC®, a marketing leader that helps companies find and win their best customers, just unveiled a new report, "The Asian American Market Report." This report provides never-before-available insight into the buying behavior of Asian Americans, which can provide a key advantage to marketers who want to target this lucrative consumer segment.

“We are always looking for ways to build meaningful relationships with multicultural consumers though cultural insights,” said State Farm advertising director Ed Gold in a statement. “This creative work strikes a balance of providing information while recognizing and respecting cultural nuances.”

Asian Americans today represent the fastest-growing population segment in the United States, with 84 percent growth since 2000. Numbering over 19 million in 2019, the Asian American population is expected to continue to explode. In fact, the U.S. Asian population will add a projected 1,323 new members every day from 2019 to 2024. Compare this to the traditional majority “white” population, which is expected to lose 165 members every day in the next five years.

The fast-growing Asian American consumer segment has impressive buying power, with average household income of $116,319. That’s 36 percent greater than overall average U.S. household income. A whopping 24 percent of Asian households will earn $150,000 or more this year.

Asian American households also spend 21 percent more annually on consumer goods and services than the average U.S. household. They spend:

• Around $100 per month on entertainment – 45 percent more than the average U.S. household
• Around $3,000 annually on apparel – 15 percent more than the average U.S. household
• Roughly $5,000 annually on food at home – about 6 percent more than the average U.S. household
• Almost $12,000 annually on transportation, including new cars and trucks – around 10 percent more than the average U.S. household

“The face of America is evolving, and marketers need to recognize how population and demographic changes in the United States will affect their business success in the coming years,” said Karthik Iyer, COO at Claritas. “Claritas can help marketers understand exactly how to target specific customer segments such as Asian Americans – often with amazing results.”

For instance, one food producer wanted to increase sales for a product line it believed would appeal to U.S. Hispanic and Asian communities. It turned to the Claritas company Geoscape for data that would help its retailers identify the most likely buyers and deliver the right inventory and message to those consumers based on which specific multicultural communities shopped at each store. The result? Sales grew 300 percent in just one year.

So what is the best way to reach Asian Americans? LinkedIn is a good place to start, given that Asian Americans are two times more likely than average to use the platform. So are mobile-related social media strategies, given that Asian Americans are 23 percent more likely than the average U.S. household to access social media on their smartphones.

“At Claritas, we help companies find and cost-effectively connect with their best customers by digging deep into the buying and media usage behaviors of specific U.S. population segments – whether those are based on demographics, media usage, cultural or other factors,” Iyer said.

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Xfinity used an Asian American family to promote its Internet service.

While the marketing numbers may be encouraging, it is important that we don't fall into the trap of stereotyping all Asian Americans as crazy rich, or part of the annoying "model minority." Other studies have shown the AAPI community having the largest gap between those that have a lot to spend and those who barely eke by.

Marketing to the Asian American community is crazy complicated. The most common  mistake advertisers make is to assume that Asian Americans are a homogenous demographic. 

There are almost two-dozen Asian cultural and language subgroups in the AAPI community; when someone's family comes to the U.S. divides AAPIs even further. You can't market to a first-generation immigrant the same way to an Asian American whose family is several generations U.S. citizens; and then there are generational differences between older AAPI's clinging to tradition and Gen X and Millennials.

So ... when Gerbers, makers of baby food, picked its Spokesbaby of the Year, Kairi Yang from Hickory, North Carolina. was it simply coincidence that the infant happened to be Hmong American? Or was there another motive in play, considering the growing Asian American community and its demographics showing that Asian Americans tend to be younger than the rest of their fellow Americans and more likely to be raising young families.

GERBER

Expect to see lots of Kairy Yang in Gerber advertising and on its website this year.

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