NEW YORK — A journey of a thousand miles begins with the first few steps.
That paraphrase of a Chinese proverb sums up the status of marketers’ efforts to target Americans of Asian heritage. In the last two years, corporations have shown a growing willingness to connect with the population of 11.9 million, and spend more doing so. There is still a way to go to reach critical mass — and the apparel sector is lagging.
The growth and collective youth of the Asian-American population and the increase and concentration of the group’s buying power are driving an upswing in marketing activity, said Jeffrey Humphreys, director of the Selig Center of Economic Growth at the University of Georgia’s Terry College of Business.
Asian-Americans constitute 4.2 percent of the U.S. population based on a December 2004 Census Bureau report, “We the People: Asians in the United States.” That population is projected to grow by 2.1 million by 2009, reaching 14.1 million, Humphreys said, compared with 7.3 million claiming Asian heritage in 1990. The group’s buying power is anticipated to surge 46 percent by 2009, to $528 billion from $363 billion in 2004, and by more than fourfold from $118 billion in 1990. Five states — California, New York, New Jersey, Texas and Hawaii — represented 77 percent of Asian-American buying power and 62 percent of the group’s population in 2004.
A greater awareness of these facts, coupled with Asian-Americans’ average age of 31.6, compared with 35.3 in the broader U.S. population, spurred about $1 billion in spending last year on advertising aimed at Americans of Asian ancestry, which is quadruple the $250 million devoted to such efforts in 2001.
“There is less of a fight and more acceptance,” said Michael Halberstam, president of Interviewing Services of America, a Los Angeles-based market researcher. “There’s been more data released on this market; it takes time for it to trickle through,” he said of information such as the 2000 U.S. Census.
Leaders among today’s fashion players include Nordstrom, Macy’s and most recently Wal-Mart, said Bill Imada, president of the Asian-American Advertising Federation. A recent Wal-Mart TV spot, Imada said, portrays an acculturated Chinese-American family, speaking mostly Chinese but throwing in some English here and there, while shopping at one of the retail giant’s stores. “My child is working on a science project,” the child’s mother says in Chinese to her companion, who responds in English, “science project.”
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The Wal-Mart commercial, airing in Los Angeles and San Francisco, and set to roll out in Houston and New York, Imada noted, speaks to the need of making in-language and in-culture appeals to a group in which two-thirds of the people have been born abroad since the mid-Seventies. One of the subtleties — and complexities — of targeted appeals to Asian-Americans is that while about 84 percent of the population says it speaks English well or very well, roughly two-thirds say they prefer to speak their native language at home and in social settings. And those languages vary across 15 subcultures, with Chinese the largest, followed by Filipinos, Indians, Vietnamese and Koreans.
More broadly, apparel marketers are seen as less active in connecting with Asian-Americans than some sectors, notably finance, automotive, insurance, public service, home improvement, beauty and gaming entertainment.
“There are major categories that haven’t jumped in with two feet, like packaged goods and pharmaceuticals,” said Wanla Cheng, president of Asia-Link Consulting. “Some, such as financial services and telecommunications, have decreased their commitment,” compared with a couple of years ago. Efforts by the apparel business to communicate with the group have held steady, said Cheng, whose clients include Citibank, Verizon and General Motors.
What’s at stake?
For one thing, spending on clothes is growing at a faster rate among Asian-Americans than the U.S. overall. Purchases of women’s apparel by Asian-Americans were 15.7 percent above year-ago levels to almost $1.1 billion in the 12 months ended June 30 — five times the growth rate of consumer spending on women’s wear nationwide, which rose 3.1 percent to $95.6 billion, based on the findings of NPD Group and NPD Fashionworld.
The dollars devoted to apparel purchasing by Asian-Americans gained 44.8 percent during the six months that ended June 30, climbing to about $525 million, while spending among all Americans slowed to a gain of 2.4 percent, or $45.2 billion, NPD data shows.
In a monthly survey between April 2004 and June 2005 by the Cotton Inc. Lifestyle Monitor, 17 percent of American women with Asian forebears said they spent more than $200 on clothes “in the past month,” versus 15 percent of all American females. That data is based on a representative sample of 3,020 shoppers, including 66 of Asian heritage. During the same period, 16 percent of the Asian-American women said they didn’t buy apparel, against 19 percent of women overall.
These trends are developing even as Asian-Americans spend about the same share of money on apparel as the broader population, or 4 cents of each dollar expended in a household, based on Selig Center data. However, since Asian-American household income is higher on average than that of the U.S., a disproportionate amount of money is apparently being spent relative to the group’s numbers. For example, average annual spending on clothes for children under two, across all Asian-American households, was about $125 in 2003 — 54 percent more than the average of $81 spent on it by all U.S. households, Humphreys said, pointing out that the figures reflect the virtual absence of such spending in households without children, save for gifts.
Combined annual spending on women’s and girls’ apparel in Asian-American households totaled around $609 on average last year, 5 percent less than the $645 expended overall. A greater presence of children across a smaller number of households may explain why Asian-Americans spend more on average for clothes for their youngest children, but less on women and girls combined. Asian-American households comprise 4.6 people, on average, versus 2.8 people nationwide, said Zan Ng, chairman of Admerasia, which tracks marketing and media aimed at Asian-Americans.
The Asian-American population represents an opportunity to cultivate an audience with the country’s largest share of bachelor’s degrees — 29.9 percent, compared with 19.8 percent of non-Hispanic whites — and a difference in income that typically ranges from $700,000 to $1 million during a person’s lifetime, Humphreys said.
Still, resources allocated by marketers to target Asian-Americans are behind those devoted to the Hispanic market, largely because of the gap in population. Hispanics account for some 39 million people in the U.S.
Asked to assess the efforts of the fashion business in marketing to Asian-Americans, Imada gave apparel players a six on a scale from one to 10. That reflects the average of two ratings: an eight for designer brands such as Gucci, Prada and Louis Vuitton, and a four for mass marketers, while acknowledging exceptions such as Sears and Kmart, which have mounted marketing campaigns in Chinese and Korean.
Cheng, of Asia-Link Consulting, offered a different view. For the most part, she said, “Apparel marketers figure it’s an image category; [they] feel ‘we don’t need to talk to the Asian-American community individually.’ Gucci, Prada, and Louis Vuitton [offer the] appeal of luxury brands, but they are not targeting their marketing.”
A low level of visibility for Asian-American entertainers in U.S. popular culture has dampened the willingness of many marketers to employ Asian-American fashion models, experts said. It has also made more difficult an uphill battle for targeted ad dollars often lost to Hispanic marketers, who had already reported spending of $3.1 billion in 2004, according to Hispan Telligence, the research arm of Hispanic Business, and TNS Media Intelligence. One billion dollars was spent to target Asian-Americans last year. “It represents us as foreign, not Americans,” said Karen K. Narasaki, president of the National Asian Pacific American Legal Consortium, which, with the Asian Law Caucus and Asian Pacific American Legal Center, this year published “Asian Pacific Americans in Prime Time: Lights, Camera and Little Action.”
Despite some progress, Asian-focused media — about 700 outlets nationwide — are probably five to 10 years away from achieving critical mass with marketers across most of the country’s business sectors, contended Cynthia Park, executive vice president and managing director at ad agency Kang & Lee, an Asian-American specialist. “People are a bit more curious,” Park acknowledged. “The convincing we’re still doing [stems from] the size of the population, compared with 39 million Hispanics, and the complexity of multiple languages and cultures.” The biggest strides will come, Park predicted, when marketers begin to see Asian-Americans as consumers first, before they consider cultural nuances. “When we erase the language scenario,” she added, “these consumers aren’t that different.”
Of hundreds of roles in prime time TV, only a “handful” are portrayed by Asian-Americans, Narasaki said, citing research from last fall. For example, FOX’s “North Shore,” set in Hawaii, where half the population is Asian, features only one minor character, of eight roles, portrayed by an Asian-American.
“TV writers often say they don’t know how to write an Asian-American person, and I’ll say, ‘It’s a person, like any other American,'” Narasaki said.
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