What is one of the fastest-growing consumer segments in the U.S.?
The answer comes from a diverse and multicultural group of shoppers—Asian Americans, Asian Pacifics, and Pacific Islanders (AAPI). Often dismissed by brands as a small niche group, AAPI consumers hold a unique and powerful position as a booming consumer market with a predicted $1.2 trillion purchasing power by 2022.
What do we know about this flourishing clientele? Well, this group of consumers is highly educated, values family, and embraces new technology with lightning speed—and your brand can't afford to miss out on their potential.
So, how do you attract the attention of this flourishing segment of digital-savvy shoppers?
Well, to effectively reach the AAPI community, brands need to understand what they value and communicate in a way that resonates with AAPI shoppers. Let's jump into understanding the buying power of the AAPI community and how you can win them over with marketing that engages and appeals to this growing consumer segment.
The Rapid Growth of AAPI Consumers
The U.S. population is becoming more diverse, and the AAPI population growth is speeding along with these changes. In just a few decades, the number of AAPI in the U.S. has exploded—and this trend is only projected to continue. For example, in 2000, Asian Americans only made up an estimated population of 11.9 million—by 2019, this number nearly doubled to 22.4 million. Current projections show a continued population boom, projected to grow to 37 million by 2060.
Increased Wages Lead to Increased Buying Power
Just because a consumer group is growing doesn't mean it's worth an investment. But, the hidden potential behind AAPI consumers is not just their jet-speed population growth (although that's certainly impressive). No, it's their buying power.
Is higher education an investment? For Asian American families, it's an investment that's paid off in trillions.
60% of Asian Americans hold bachelor's degrees or higher (compared to 35% non-Hispanic whites, 23% of African Americans, and 22% of Hispanics). On average, Asian American households have 41% higher income than the national average. This cumulative buying power adds up to real money (around $1.6 trillion by 2024, to be exact), leading to higher spending across a variety of purchases. From food to apparel, education (a whopping +128%), and other goods, AAPI households spend more than the national average.
To put it simply, AAPI consumers have both the population growth and the income to make them a powerful consumer group that brands can't afford to ignore.
So, how can you tap into this consumer segment? First, you need to understand how they approach purchasing decisions.
How do AAPI Consumers Shop?
AAPI consumers are some of the most digital-savvy shoppers in the U.S., and it's no surprise, considering 99% of Asian American households have internet access (versus 93% of the total U.S. population). AAPI consumers recognize the power of digital technology, and when it comes to shopping, they know how to use it.
Online Purchases Reign Supreme
When it comes to how AAPI consumers shop, one word comes to mind: digital. Asian Americans make online purchases at a 34% higher rate, on average than the total U.S. population. From researching products online to making purchases, this group of shoppers is comfortable using technology at every stage of the consumer journey. Online brands are in a prime position to capitalize on the AAPI consumer.
So, what are AAPI shoppers buying online?
Well, it turns out they're interested in a little bit of everything—from food and electronics to apparel and accessories. But a few product categories stand out as being especially popular among this group of consumers. Some of the most popular online purchase categories for AAPI shoppers include:
Beauty and personal care
Computers and equipment
Ultimately, when it comes to online purchasing power, AAPI consumers dominate. As active online shoppers, they spend an average of $1,151 on internet purchases a year. So, if you're a brand selling products online (and let's face it, most brands are), then the chances are that AAPI shoppers may be some of your best customers.
But, what leads the AAPI consumer to a website to shop in the first place? Look no further than right at home.
AAPI Consumer Journey Starts With Friends & Family
Often, the first step of the Asian Americans' consumer journey starts with a recommendation from a family member or friend. In fact, Asian Americans are 50% more likely to use the internet for consumer reviews, and 26% of Asian Americans agree that finding out about products and services is an important reason for using social media.
The AAPI consumer journey is informed by a rich cultural heritage that values relationships and the advice of family, friends, and community but also embraces the latest advancements in technology. This is a compelling insight for marketers because it speaks to the idea of inclusivity. To reach and engage with AAPI consumers, consider digital platforms and traditional touchpoints like family and community.
How Should Brands Engage & Communicate With the AAPI Community?
When it comes to marketing and advertising, AAPI consumers are not a monolith. They're a diverse group, and your marketing should recognize their rich cross-cultural identity. That being said, there are a few general insights that can be useful for marketers who want to reach AAPI consumers.
01—Be Present Online
Having an online presence is a must-have to attract tech-savvy AAPI shoppers. This means that digital platforms like social media and email are likely to be the most effective channels for reaching this group of consumers. Plan a social media engagement strategy, but don't forget the importance of family recommendations, so focus on creating content that can be easily shared. You're more likely to reach AAPI consumers through the people they trust most—their family and friends.
02—Invest In Excellent Customer Service
Speaking of friends and family, keep in mind that word-of-mouth recommendations are an essential part of the AAPI consumer journey. You want aunts, uncles, friends, and neighbors to speak only the best about your brand and products. So, be sure to provide them with a great product and excellent customer experience. One bad online review could lead to an exodus of a consumer community.
03—Build An Inclusive Brand
It's also worth noting that while AAPI consumers are a growing and important market, they're not always well-represented in mainstream advertising. Consider how your brand can create culturally relevant content that connects with the AAPI community. Brands can stand out by creating marketing that is inclusive and representative of the AAPI community. Not only will this help you better engage with AAPI consumers, but it will also show that your brand is committed to inclusivity and diversity.
These general insights are only the first step to reaching and engaging with AAPI shoppers. If you want to build a strong relationship with the AAPI community, ultimately, you will need to invest in getting to know them as more than a group but as diverse individual shoppers, and that takes market research.
Strengthen Your Relationships with AAPI Consumers
Before you can build brand consistency, you need to understand your consumer. Develop a stronger relationship with the AAPI consumer with actionable insights and strategies from our team of experts. Let's chat.