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Asian America Has Bloomed — Will U.S. Companies Notice?

By Ron Chepesiuk

The U.S. government released the first official Census 2000 figures last March 9, revealing what many expected. The Latino population’s growth rate is booming and poised to become the country’s largest minority. The census data, however, also gives a glimpse of another important demographic trend that should have an impact on U.S. business. The country’s Asian American population is surging and moving from its traditional urban enclaves out to the American hinterland. Indiana’s Asian American population, for instance, nearly doubled to 72,839 during the past decade, while Arkansas’s growth rate soared as much as 110 percent to 25,401.

“The (2000) census shows that the Asian and Pacific Islander American population is growing dramatically, and that it’s a market presenting largely untapped opportunities for a wide variety of marketers and companies,” said Saul Gitlin, vice president for strategic marketing services at New York City-based Kang and Lee Advertising, the leading communications firm specializing in marketing to the Asian American consumer market. “The data are showing that the Asian American market is even bigger than we thought, and that its members are upwardly mobile, well educated, just the kind of consumers who should appeal to marketers,” added Stephen Roulac, CEO of the Roulac Group, a San Francisco-based marketing strategy and consulting company with offices in India and Hong Kong.

The census data build on the findings of other studies released within the last year. The Selig Center of Economic Growth at the University of Georgia presented data in May 2000 that showed the disposable income among Asian Americans had reached $229 million in 1999, a rise of 102 percent in nine years.

Selected Asian American Statistics • Total population (as of 1999, estimated) 4.1 % or about 10.4 million • Increase between 1990 and 1999 (estimated)— 44.9% • By 2005, Asian and Pacific Islander Americans will comprise 4.6% of the population • 21.9% percent of Asian American males over age 25, who are employed full-time and on a year-round basis, earn more than $60,000 annually, while 28.3 % of Asian Americans earn at least $40,000, according to Kalorama Information • Disposable income for Asian Americans hit $229 billion in 1999, a 102 percent increase, according to the Selig Center • The Vietnamese American community represents the third largest Asian American community, with more than $10 billion in buying power, according to Charles Schwab’s research Some Early State Data from the 2000 Census • The Asian population in Pennsylvania surged by as much as 83 percent, from 135,784 in 1990 to 5,248,601 in 2000 • Arkansas’s Asian population is up 110 percent to 25,401 • South Dakota’s Asian population, up as much 105 percent to 6,009 • Lousiana’s Asian population, up as much 60 percent, to 64,350 • New Jersey’s Asian population, up about 94 percent, to 480, 276

How large is this purchasing power? If Asian America was a country, it would rank as the world’s fifteenth largest. Asian America’s income, moreover, would surpass Hong Kong, Taiwan, Thailand and Indonesia, all of which except Hong Kong have far larger populations.

Another study, released by Kalorama Information, a leading New York City-based publisher of marketing research, showed that marketers have largely ignored the Asian American community, even though it’s one of the country’s fastest growing and earned the largest annual income. Among Kalorama’s findings:

• About 21.9 percent of Asian American males over the age of 25, who are employed full-time on a year-round basis, earn $60,000 annually, while 28.3 percent of Asian American women earned at least $40,000 annually.
• During a six-month period in 1998, the three major broadcast networks (ABC, NBC and CBS) aired fewer than three-and-half minutes of reports about Asian Americans.
• Direct marketers targeted Asian Americans less than any other ethnic group. They receive approximately 100 pieces of direct mail annually, as compared to the 300 to 400 pieces received annually by general-market population.

“Just look at the purchasing power of the Asian American market, and you know that companies don’t really understand the Asian American market,” said Wanla Cheng, a principal in Asian Link Consulting Group, a New York city-based marketing and consulting firm specializing in multicultural marketing. “They believe that Asian Americans represent only three or four percent of the U.S. population, so they think it’s not worth targeting.”

It would be smart business for U.S. companies to start paying attention to the Asian American market, agreed Selina Yoon, president of Master Communications in Cincinnati, Ohio. “Many companies have a specific marketing budget for the Latino market, but not for the Asian market,” she pointed out. “They should start re-thinking that marketing strategy.”

Founded in 1994, Master Communications distributes cultural products to Asian Americans and Asians living in the U.S. Last year, the company launched its business-to-business unit, which includes licensing, consulting and marketing services to companies that are eager to expand their businesses into the various Asian American communities in the U.S.

Master Communications uses the same basic marketing principles that apply to mainstream America, but those principles are executed differently.

“Sure, you have to know your customer and provide the products they need,” Yoon explained. “But the Asian market is a fragmented market, and that means we have to talk to each ethnic group before we can develop a marketing strategy for them.”

Master Communications’s marketing philosophy reflects the challenges facing any company — Asian, Asian American or mainstream—that wants to target the Asian American market. Historically, it has been difficult to do using traditional media, and a lot of work must go into gaining the Asian American consumer’s trust and loyalty.

“A company has to play a very active role before it can establish its brand, and it has to do things that Asian Americans will find highly relevant,” explained Calvin Wong, executive director of Community Connect Inc. in New York City, a company founded in 1996 to build interactive online communities focused on ethnic affinity groups. “This means being highly interactive because research has shown that Asian Americans are more likely to take to new technologies, such as the Internet and interactive TV, than other ethnic groups.”

Community Connect’s Web site, Asianavenue.com, which targets the Asian American community, has registered more than a million members and is logging 110 million page proofs a month, putting it among the largest registration-based media properties for their targeted audiences.

Heavyweight corporations such as General Motors, Hewlett Packard and Amazon.com, are advertising to Asian Americans via Asianavenue.com.

Atsuko Watanabe, CEO of New-A Ink, says researching the Asian American market involves a lot of work. “We are employing a fullrange of marketing initiatives to find out what the Asian American market wants,” she revealed. New-A Ink is a New York City-based marketing company specializing in developing campaigns to the Asian American market.

Marketers face other challenges, as well. Language represents an obvious one. Latino households may speak either English or Spanish or some combination of both, but Asian-American households often can speak a number of languages and many of them have dialects. It’s difficult to understand and focus on a market that has 10 million people divided into six major ethnic groups.

“American companies have a hard time handling diversity, and Asian communities are just as foreign to them when compared to Hispanics or African Americans,” Wong explained. “Americans are egocentric, so they don’t pay much attention to what happens in Asia.” Wong said Community Connect “skips” the language issue by working in English. “It allows us to achieve a higher standard and to speak to our audience more effectively,” he explained. Wong said that Community Connect may be missing the Asian American consumer who feels comfortable in their native language, but he added, “The majority of Asian Americans speak English, and many of those who don’t are like my immigrant grandparents — they don’t own computers or have access to the Web.”

Not all sources agree with this view, however. Admerasia, a NewYork City-based multicultural marketing company, provides its content bilingually, said Jeff Lin, the company’s CEO and co-founder. “Many immigrants want to use the native language of their household,” he explained. “I would say the majority of Asian Americans read in-language newspapers or watch in-language media.”

In providing bilingual content, Admerasia recruits a good number of its workers from Asia. “It’s difficult to find the talent we need here in the U.S. to localize our content,” Lin said.

The fact is — nobody knows what Asians in the U.S. are doing on the Internet because the research data simply aren’t available. “How do we know if they’re going to a Pan Asian Web site that has English or to a site that’s in their native language?” Gitlin asked. “Research has to be done to find out what Asian Americans are doing on the Internet before we can figure that out.”

U.S. businesses may be missing a nice opportunity by not marketing their products and services in Asian languages. It certainly makes economic sense, say multicultural marketing experts. “The costs of native-language media are low and the clutter (the competition) is low, but the impact is high when a company advertises in a native language,” Cheng explained.

“Asian American consumers are ready and willing to listen to in-language messages. In fact, they like to be courted in their own languages because it makes them feel like companies respect and value them as consumers.”

Some companies have seen the light and have begun Asian language-specific advertising campaigns. Last August, for example, State Farm Company launched its first major marketing effort to Chinese consumers with a Chinese-language TV, video, print and outdoor campaign. While most of its ads are in Chinese, State Farm is also directing some of its messages to Filipino, Korean and Vietnamese consumers. “Like a good neighbor, State Farm is here” is well known as the company’s marketing slogan. In Chinese it has become, “Having a good neighbor, there’s peace every day.”

Last October, Charles Schwab and Company Inc., the leading financial services company, launched a campaign that targets Vietnamese American investors. Schwab’s research showed that Vietnamese Americans represent the country’s third largest Asian American community with more than $10 billion in buying power, and the investors in their community tend to be well-educated and loyal to the services they use.

“When people want to start doing things with their money, it’s often more comforting to do it in their own native language, even if you’re perfectly fine in English,” Schwab spokesman Glen Mathison told the San Jose Mercury News.

Direct TV, the nation’s leading provider of digital satellite television and entertainment, believes in the potential for Asian language broadcasting. Last November, it launched the Phoenix North American Chinese Channel on its Direct (R) program service. The channel broadcasts in Mandarin and includes 24 hours of news and entertainment programming from Hong Kong, Taiwan and the Chinese mainland. To get the word out, Phoenix said it would advertise in three major Chinese-language newspapers and begin an extensive media ad campaign.

Plenty of opportunities await the U.S. businesses that begin focusing on the Asian American market. Packaged goods, health care, pharmaceuticals, automobiles and travel and leisure are where some of the biggest opportunities lie, according to Asian American marketing experts.

“Some of the largest packaged goods companies are actively targeting Hispanics for the last 15 to 20 years, but few of them have done anything with the Asian American market because they have failed to see its potential,” Gitlin said.

A few packaged goods giants, such as Kraft Foods and General Mills, have begun to ease cautiously into the Hispanic market with bilingual labels and products seasoned to Hispanic tastes. Once again, however, multiple languages and cultures, as well as a dearth of research data, makes the Asian American market too challenging for most packaged goods companies.

Some marketing analysts, however, question if Asian Americans want packaged goods targeted to them. “We have done research on second- and third-generation Asian Americans, and they don’t necessarily want to be singled out,” said Cheng. “They want to be addressed as American.”

But some companies are re-thinking their marketing strategy to the Asian American market, and that includes one headed by Asian Americans. For many years, Kingston Technology, the giant Fountain Valley-based computer chip manufacturer, founded by Chinese Americans John Tu and David Sun, was like many mainstream companies. It paid little attention to the Asian American community. But recently, it began to notice that a large number of higher levels executives in the computer industry are Asian Americans.

“We have begun placing ads in the Asian American media and talking to a lot of reporters from the local Chinese-language media,” said Wei Szeto, Kingston’s vice president for strategic business development. “The U.S. is becoming more ethnically diverse, and it’s good business for Kingston to localize its ads.”

As the census figures continue to stream out, the anticipation is that American businesses will finally get it and begin paying attention to the country’s long ignored ethnic groups. “The new census numbers are reflecting America’s changing demographic landscape,” Wong said. “Very soon, Asian Americans, Hispanics and African Americans will no longer be the minority. Community Connect plans to be there to help companies reach Asian Americans, African Americans and Hispanics with relevant messages.”