There’s far less research devoted to Asian Americans than to Millennials, but with an estimated buying power of $770 billion last year (as opposed to Millennials’ $200 billion), Asian-Americans are a force to be reckoned with, according to data cited in a new Nielsen report [download page]. Indeed, given their relatively long life expectancies and young median age, Asian-American households are expected to outspend all other races and ethnicities over their remaining lifetimes, per recent research.
Citing data from the Bureau of Labor Statistics, the Nielsen report notes that Asian-Americans’ average annual expenditures, at $61,700, are 19% higher than the US consumer average of $52,000. Among the various spending categories, Asian-Americans over-index in particular in spending on housing ($22,000, 26% higher than the average consumer), food ($8,000; +19%), personal insurance ($7,900; +41%), apparel ($2,150; +28%) and furniture ($420; +17%).
The Nielsen report covers the Asian-American consumer segment from a number of different angles, combining Nielsen data with third-party figures to offer a host of intriguing statistics. Below are some highlights from the report, organized by topic.
Demographics and Regional Concentration
The fastest-growing minority segment in the US, Asian-Americans are showing a profound shift in nativity, per Census Bureau figures cited in the report. While just 21% of Asian-Americans aged 18 and older are US-born, the opposite is true for those under 18, with just 21% being foreign-born.
California is home to the most Asian-Americans (6.1 million), although their concentration is highest in Hawaii (56% of the population). Not surprising given their size, Asian-Americans’ combined buying power is highest in California ($250 billion), followed by New York ($70 billion), Texas ($56 billion), New Jersey ($46 billion) and Illinois ($30 billion), according to figures from the Selig Center for Economic Growth. In fact, Asian-Americans represent 15.3% of California’s buying power.
Examining top DMAs, LA leads with 2.3 million Asian-Americans, or 12.8% penetration, followed by New York (2.1 million; 9.8%) and San Francisco (1.8 million; 23.9%).
Food and Groceries
Citing GfK data, the Nielsen report demonstrates that Asian-Americans have an affinity for healthy foods, being 23% more likely to evaluate the nutrition of menu items, 31% more likely to eat organic foods, and 22% less likely to “allow junk food” in the home.
This translates into shopping for “fresh” foods, as Asian-Americans significantly over-index their population presence in dollar volume spent on fresh seafood (index of 247), fresh vegetables (162), and fresh fruits (127).
Overall, their top-indexing grocery items (in terms of dollar volume) are Asian noodles (378) and dried vegetables and grains (255) in the food department, and photographic supplies (213) and disposable diapers (180) in non-food departments.
Being 21% more likely to drink wine with dinner than the typical consumer (per GfK), Nielsen data shows that Asian-Americans spend $46 per store visit on adult beverages, compared to $39 for consumers overall.
Where They Shop
Asian-Americans give grocery stores the same share of their outlet visits as the general population, though they spend a smaller share of their total outlet dollars there. They’re more likely to shop and spend at warehouse clubs and drug stores, but less likely to shop and spend at mass merchandisers, dollar stores and convenience stores. Their relative avoidance of mass merchandisers could be the result of their concentration in urban metropolitan areas, the authors theorize.
When shopping, Asian-American women feel that name-brand products are worth the extra price and don’t believe that private labels are suitable where quality matters. They are, however, “deal-prone” when shopping for numerous manufacturers’ products including alcoholic beverages, general merchandise, and non-food groceries. They are more likely to pay full price for daily staples such as dairy, meat and dry groceries.
Asian-American Millennial women are more likely than average to shop for a variety of health and beauty aids, including skin care preparations and fragrances.
Financial and Travel Products
Asian-Americans are more apt than consumers overall to own a variety of financial products, per the report, including individual credit cards (80% vs. 66%), joint credit cards (40% vs. 29%) and checking accounts. They’re also more likely to use cash and credit cards as payment methods, but less likely to use debit cards and checks.
When it comes to travel, Asian-Americans outpace the general population in annual number of hotel purchases (2 vs. 1.4), airlines purchases (1.8 vs. 0.9) and auto rentals (0.9 vs. 0.5).
Asian-Americans are on the “cutting edge” of technology adoption, per the study, with 87% owning a smartphone as of Q4 2014. Among TV households, Asian-Americans are also more likely than the general population to have a tablet (66% vs. 48%), multimedia device (42% vs. 18%) and enabled smart TV (23% vs. 14%). While they spend significantly less time than consumers overall watching traditional TV, they spend more than twice the time using a multimedia device, and also spend significantly more time using the internet on a computer.
Compared to non-Hispanic whites, GfK data shows that they are 42% more likely to agree that the internet is a source of entertainment, 31% more likely to shop online, and 29% more likely to bank online.
TV and Advertising
Looking at TV ratings in February, Nielsen reveals that 3 of the 5 highest-indexing shows were episodes of “Fresh off the Boat,” with the “Shark Tank” premiere the second-highest indexing.
Almost half of Asian-American households that watch English-language TV also watch Asian-language TV, using this as a means to maintain cultural connections with their home countries. Program and ad performance are higher among those who more frequently watch Asian-language TV than those who watch infrequently. Among “dual-language” viewers, brand recall is highest when watching reality/competition, game show, and reality-non-competition genres. For those who only watch English-language TV, brand recall is highest for the talk format and news magazine genres.
Nielsen recommends that brands “keep it light-hearted” when advertising to Asian-Americans, noting that humor and tech-related ads performed best in memorability among Asian-American Millennials last year.