A surprising number of brands write off Asian American and Pacific Islander (AAPI) consumers as a 5.6% niche rather than a worthwhile investment.
From a marketing perspective, there are certain obstacles: Our dozens of ethnicities, hundreds of dialects, income differences and the spread of cultures make engagement a unique challenge. But our population will double by 2060, and we are well on the way to becoming the country's fastest-growing immigrant and ethnic group in the next 15 to 20 years. According to Nielsen, we have over $ 1 trillion in annual purchasing power, make up the largest segment of online shoppers, and index every other population in terms of smartphone ownership (91%) and internet access (95%).
If the standards for on-site protection continue, these attributes become advantages. Brands are forced to rely on digital content consumption, online shopping and word of mouth to win customers. All of these are things the next generation of Asian consumers are well equipped for. As my mother would say, we are tiny giants.
Over the past year, I've seen several lessons that our supposedly Asian niche brands have used to catapult themselves into the mainstream.
Niche is the next mainstream
Branding is storytelling, which of course points us to the capital of storytelling: Hollywood. The most lucrative creative franchise companies in history – Pokémon and Marvel – started out as niche video games and comics. Despite their eccentricity, both are now eleven-digit companies.
In engineering, we call this the "first 1,000 customers" phenomenon, where you would rather have 1,000 customers who pay $ 1,000 each than 1 million customers who pay $ 1 each. If the math is the same, why is it important? Because the former is much more loyal and becomes brand evangelists, who ultimately bring you a higher lifetime value.
In the next brand game for the mass market, you are much more likely to lose the price if you are specific to a niche.
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Although Asian founders in all categories represent only 11% of all companies that have received risk finance in the food sector, they are responsible for 30% of the up and coming unicorn (over $ 500 million) and unicorn companies (over $ 1 billion) decade.
Interests are the new identity
In addition to using consumers who are likely to remain loyal to your brand, it's important to consider the way you segment your audience. The identities and labels that allow us to express ourselves clearly are necessary, but sometimes the branding depends on the values and interests that bring us together: we all want to live a longer, happier and more successful life.
"And" about "or"
As second and third generation Asian Americans have an increasing share of disposable income, we need to turn to young buyers to understand demand. The next generation of Asian Americans is also in line with American consumer standards and continues to seek connections to their cultural roots. As Asians and Americans, we are hybrids of two customs, two languages and two nations, and the degree to which we refer to one or the other is constantly changing. For companies that want to keep up, the question is how to find the right balance.
Whether due to a strong sense of community at the base, the nostalgia for traditions or the social behavior brought about by education, Asians, like any cultural diaspora, will want to consume products that remind them of their homeland. Before brands made youth-preserving skin care rituals mainstream, AAPI and the American audience had little influence on the now massive Korean category of beauty care (K-Beauty). By positioning itself as an educator rather than a seller, K-Beauty platforms brought toners, serums and sheet masks to the United States to enable customers to do multi-level beauty routines and provide them with the knowledge needed to make the products their own .
As American consumers become more diverse, brands can decide whether to keep up or not. However, one thing is certain: the Asian-American consumer is becoming a monolith in the US economy, and for those who can draw this audience's attention, a former niche could prove to be a golden ticket.
This article was written by Megan Ruan of Adweek and legally licensed through the NewsCred publishing network. Please direct all licensing questions to firstname.lastname@example.org.
Originally published on May 25, 2020 at 10:41 p.m.