Asian Persuasion A rapidly growing influence in the U.S.

Asian Persuasion A rapidly growing influence in the U.S.

By: Doug Anderson, EVP, Research & Development, Nielsen Consumer Panel Services

SUMMARY: Asians in the U.S. are often overlooked by marketers due to the tremendous growth of the Hispanic population. However, marketers will need to dig deep in order to reach this rapidly growing segment, who speak many different languages and have diverse cultural backgrounds as compared with the Hispanic consumer. While most Hispanics in the U.S. come from either Mexico or Latin America and share at least some parts of their culture, Asians do not. The strong cultural differences between persons from Japan, China, and India impact their tastes and how they approach their lives in the U.S.

Large scale immigration from Asia to the United States began with the gold rush of 1849, which spurred large numbers of Chinese immigrants and ended with The Chinese Exclusion Act of 1882. Most Chinese entered the country through the port of San Francisco, and because most came to be miners, the gender ratio of the Chinese population in the early U.S. was very male skewed, with over 20 men for every woman. Because the Exclusion Act stopped new immigration and because the vast majority of Chinese in the U.S. were men, Chinese society well into the 20th Century was essentially a bachelor society in which older men outnumbered younger ones.

A diverse group

Other Asian groups began to immigrate to the U.S. in the second half of the 20th Century, and today, persons of Asian origin or ethnicity make up 4.3% of total persons (3.7% of households are headed by a person of Asian origin or ethnicity). Unlike Hispanics in the U.S., the majority of whom are from Mexico or are of Mexican ancestry, Asians are more diverse geographically and hail from a long list of countries spanning nearly a third of the globe. Although the Chinese are still the largest subgroup, accounting for nearly one in four persons of Asian extraction, Asian Americans today are a very diverse population with no one language or dominant culture.

Affluent and educated

The most unique features of the Asian population in the U.S. are its levels of income and education. Asians have the highest incomes of any race/ethnic group, with over 45% of households earning incomes over $70,000. Less than 15% of Asian households have incomes less than $20,000, the lowest share of any group.

Levels of education for Asians are also quite high. Today, many Asian immigrants are young people coming to attend school. In fact, 35% of Asians who have been in the U.S. less than five years are enrolled in school, with the majority of those enrolled in either college or in a post-graduate program. Over two-thirds of Asian immigrants who have been in the country for more than 20 years have at least some college education, as do nearly 80% of those who speak English well. For comparison, only 39% of all non-Asian ancestry persons in the U.S. have at least some college. The larger Asian groups—Indians, Filipinos, and Japanese—have the highest levels of educational attainment, while Southeast Asians and Chinese have lower levels.

Higher levels of education position Asian immigrants for better jobs…

Higher levels of education position Asian immigrants and persons of Asian ancestry for better jobs than other race and ethnic groups, and of course, provide the higher income levels. Asians are very highly concentrated in computer and mathematical jobs, as well as those in the physical sciences—in engineering and finance—and in medicine.

Overall, the Asian population of the U.S. is younger than the non-Hispanic white population, though older than Hispanics. Because the fertility rates for Asian groups average nearly 25% lower than for Hispanics, only about 22% of Asians are under the age of 18, while children make up over a third of Hispanics. Asians are also less likely than the total population to be over the age of 65. Asian households are the most likely of any group to contain a married couple—over 60% (53% for white, 50% for Hispanic, and 29% for African American households). The level of divorce is also quite low among Asians relative to other race and ethnic groups.

Media savvy

Asian households are the most Internet-ready and High Definition (HD)-ready out of any ethnic group. According to Nielsen, as of May 2008, fully 85% of all Asian households have a PC with Internet access versus 73% of the Total U.S. Almost one-fourth (23%) of Asian households have at least one HD-capable/receivable television set.

Asian view 42% less television on a total day basis as compared to Total U.S….

Television usage, for Asian, African-American, and Hispanic households also vary greatly. In fact, Nielsen reports that in Asian households, Persons 18–49, view 42% less television on a total day basis as compared to Total U.S. (10.7 vs. 18.5). Conversely, Persons 18–49 in African American households view more television than Hispanic and Asian households during both Total Day and Prime dayparts. For Total Day, Persons 18–49 in African American households view 46% more television than Total U.S. (27.1 vs. 18.5). Hispanic Persons 18–49 view 9% less on a Total Day basis than Total U.S. (16.9 vs. 18.5).

Differences in the types of television programming Asians prefer reflect their intellectual tendencies as “Science Fiction” and “News” appear in the Top 10 for Persons 18–49 in Asian households, but neither program type appears in the Top 10 lists across white, Hispanic, African American or Total U.S. breaks.

Fresh and fit

Asians’ penchant for home-cooking meals and buying fresh ingredients is evident in their shopping baskets. Nielsen research shows that both canned and fresh fruit and meat products are popular items, indexing way above expected norms when compared with the average shopper.

And while it may be no surprise that Asians purchase significantly more “traditional” categories such as sake (dollar volume index of 843, where 100 is average), miscellaneous oriental foods (600), tea (408), oriental noodles (380) and rice (366) when compared with average shopping norms, Nielsen reports that categories such as female contraceptives index almost three times higher than average for Asians with an index of 282. By comparison, whites and Hispanics report an average index of 87 and 100, respectively, for the category, and African Americans index above average at 143. Good oral hygiene and skin care are also paramount—products such as toothbrushes, appliances and accessories, dental floss and skin cream all show higher than expected dollar volume activity.

Asians are expected to grow almost as fast as Hispanics…

Future growth

On a percentage basis, Asians are expected to grow almost as fast as Hispanics between now and 2050. The Pew Research Center projections show around 41 million Asians in the U.S. by 2050. Nearly all of this growth (94%) will come from immigrants who entered the country after 2005 and their U.S.-born descendants.

At this growth rate, Asians would account for over 9% of the Total U.S. population by 2050. Although this number is dwarfed by the expected incidence of Hispanics in 2050 (30%), it is essential to keep in mind that this is the expected average incidence across the entire country. Like many immigrant groups, Asians tend to be concentrated geographically—nearly 40% live in California, Oregon, and Washington states. The city of San Francisco is nearly one-third Asian today, and all of Santa Clara County (south of San Francisco and the heart of the Silicon Valley) is 30% Asian ancestry. If these areas continue to draw new Asian immigrants—and it seems quite reasonable to assume they will do so—then some cities on the West Coast of the U.S. will be majority Asian well before 2050, and many others will have Hispanic and Asians populations that combine to constitute the vast majority of residents.

In 1960, Asians made up only about 0.6% of the Total U.S. population, many concentrated in California. Growth has come almost entirely from immigration, but in the future we will start to see a higher share of growth coming from the children of immigrants and their children.

Asians and acculturation

Asian immigrants to the U.S. may not go through the same sort of acculturation process as Hispanics. Hispanics are much less likely to be enrolled in school, particularly post secondary school, and tend to take low-paid blue collar and service jobs, often either in Hispanic neighborhoods or in companies with a high share of Hispanic employees. Asians likely have, on average, better English skills when they enter the U.S., particularly writing skills, since they are often entering the country to attend college or graduate school. While in school they are exposed to a broader range of American culture than many Hispanics who come to the U.S. to work rather than attend school.

The differences for adults are the most striking. Less than 19% of Asian adults struggle with English compared to over 30% of Hispanic adults. Most children of both Asian and Hispanic immigrants are born in the U.S., and in general, have much better English language skills than their parents. The distributions of English language skills for children of Hispanic and Asian origin are nearly identical.

Marketing to Asians

Asians are expected to continue to grow rapidly as a share of U.S. population. Although they will likely continue to be ranked the third race or ethnic group by size (behind Hispanics and African Americans), they will make up a significant share of population over the next few decades. Like Hispanics, they will tend to be concentrated geographically, meaning that they already are a very significant share of the population in several major markets, and may come to dominate some larger cities. San Francisco and the surrounding areas could easily become majority Asian in the coming years.

Language-specific marketing is less of a requirement for success as compared with Hispanics…

Since Asians tend to have good English skills, language-specific marketing is less of a requirement for success as compared with Hispanics. However, Asian tastes are more different from U.S. norms than are those of Hispanics, which makes marketing to this segment more challenging. While most native U.S. shoppers dropped into a Hispanic grocery store would be at least familiar with most of the ingredients, the average American dropped into a Chinese, Korean, or Japanese market might not fare as well.

The fusion of Asian culture into the American mainstream will continue to gain importance and will increasingly gain focus from makers and sellers of consumer products, particularly in West Coast markets and those of the Northeast. New strategies that reflect Asian diversity and unique tastes will need to improve as this segment continues to grow in importance.