Asian Americans As Model Consumers
- Report Irks Some
By Steve Han Koream Journal
After leading market research firm Nielsen released a 36-page statistical report last month about the shopping habits of Asian Americans, headlines like this one in the L.A. Times soon followed: “Asian Americans’ Shopping Habits Make Retailers’ Eyes Light Up.” And, once again, Asian Americans confronted a paradox.
On the one hand, a major mainstream firm had recognized Asian Americans’ contribution to the nation’s economy and highlighted their significant buying power. On the other, those who study and work in the Asian American community couldn’t help but shake their heads at yet another example of this racial group being made out to be the model minority, or in this case, the model consumer.
The Nielsen report, titled “Significant, Sophisticated and Savvy: the Asian American Consumer 2013,” highlighted that an Asian American household spent an average of $61,400 in 2012, nearly 20 percent higher than the general household ($51,400). Nielsen also projected that the Asian American buying power in total will reach $1 trillion by 2017.
“There hasn’t been a concerted effort to provide insight on Asian American consumers,” said Betty Lo, Nielsen’s vice president of public affairs. “This report gives us an opportunity to head down that path. Although Asian Americans only make up 6 percent of the U.S. population, they have substantial buying power. A lot of American companies are struggling to find growth opportunities, so this is an important segment for them to understand.”
At almost 19 million, Asian Americans are touted as this nation’s fastest growing ethnic segment. Between 2000 and 2013, their population grew by nearly 60 percent, while the growth of non-Asian Americans was about 10 percent. And these figures certainly have helped motivate mainstream companies that may have previously ignored this minority community to start paying attention.
On the surface, the numbers appear to support Nielsen’s findings about the “significant, sophisticated and savvy” consumer. Asian Americans on average earn more than general U.S. households, said the report, and are more likely to have incomes of $100,000 or more. In 2012, an average Asian American household outspent the general household in almost every major category, including housing ($20,800 vs. $16,900), transportation ($10,100 vs. $9,000), food ($8,000 vs. $6,600) and apparel ($2,400 vs. $1,700), the report said.
However, Grace Yoo, an Asian American studies professor at San Francisco State University, contended that such figures need to be carefully interpreted. Asian Americans spend more on housing, for example, because they tend to reside in urban areas (L.A., New York and San Francisco, for example), where cost of living is comparatively higher. This then skews statistical comparisons between their average spending and the nation’s average. “Nielsen’s findings cannot be used to generalize all of Asian America,” Yoo said.
“Asian Americans live in the most expensive regions in the nation. Living in these expensive areas can totally account for higher than average spending on housing and transportation.” Indeed, though the Asian American population increased by at least 33 percent in all states except for Hawaii over the last decade, the Nielsen report said that Asian Americans still flocked to urban, metropolitan areas. “It’s true that Asian Americans are congregated in urban cities,” Lo said. “But urban cities attract all ethnicities. In the report, Nielsen compares Asian Americans to other multicultural segments, as well as to total population, so we think that everything will even out.”
The report also noted that, because Asian-headed households were more likely to have two or more adult generations living in the home, this translates into more wage earners, pushing up the overall household income and purchasing power.
“Like their household makeup, their shopping decisions involve a mix of priorities,” the report said. “Juggling the care of children and elderly parents means that they’re looking for efficiency and convenience. To that end, they have more readily adopted technology to search for options and ultimately to help with buying.” In other words, Asian Americans are turning to the Internet for their purchases, and are more likely than the general population to go online to research consumer reviews on products and look for coupons, according to the Nielsen report. An estimated 77 percent of Asian Americans have made an Internet purchase in the past year, compared to 61 percent of the general population. They are also twice as likely to spend $2,500 or more per year on Internet shopping.
Though they appear savvy shoppers looking for deals, the report also highlighted that Asian Americans are a prime example of consumers who won’t sacrifice quality for price. It cited a recent survey that suggested two in three Asian Americans are willing to pay more for quality. Asian Americans are nearly twice as likely than the general population to spend $300 or more on a watch and 36 percent more likely to spend $400 or more on a piece of fine jewelry. The report asserts that Asian Americans tended to be more brand conscious because many originated from countries where famous U.S. and global brands were seen as high-quality.
One of the report’s infographics shows that Asian Americans outspent non-Hispanic whites at upscale department stores. Over a 30-day period, Asian Americans made purchases over four times more than non-Hispanic whites at Saks Fifth Avenue, three times more at Nordstrom and almost twice more at Neiman Marcus. As intriguing as this data means, Asian American studies scholar Ji-Yeon Yuh at Northwestern University said such broad findings don’t actually tell us much about Asian American shopping habits. “It relies on a demographic category that is too general and contains too much variety to be deeply meaningful,” Yuh said. “I wonder what the shopping habits of Asian Americans are by income group, for example, or by region.”
But Kyeyoung Park, an anthropology and Asian American studies professor at UCLA, said the Nielsen findings do speak to the reality that Asian Americans, including Korean Americans, come from a consumption-oriented society. Of course, the Nielsen report “only speaks to one dimension of the Asian American community,” she pointed out, adding that it’s important to ask the question of why some Asian Americans are going after high-end brands in their shopping.
“Some Asian Americans tend to be insecure. They feel like they lack a full membership or sense of belonging as Americans,” Park said. “So they try to buy it through consuming. Particularly Korean Americans, it’s not so much that they go for quality, because what they’re really after is a brand name, from Louis Vuitton to Harvard. So although Nielsen’s report lacks critical analysis, I would say it factually speaks to reality. I wouldn’t say it’s not true.” Reports like this one create something of a catch-22 for a minority community trying to fight for a stronger voice and presence.
“The report is an attempt to convince corporate America to pay more attention to Asian Americans,” said Daniel Ichinose, project director at L.A.-based Asian Americans Advancing Justice. “[Nielsen’s report] may help the public recognize that immigrants grow our economy, in part through consumer spending.
But he added, “Unfortunately, the kind of model minority stereotypes the report perpetuates also hurt our community by making those most in need, like recent immigrants and the low-income, invisible to policymakers and service providers.”
While some Asian Americans may indeed be living a lavish lifestyle, the other side of the story is that, from 2007 to 2011, the unemployment rate soared by 89 percent while the poverty rate increased by 20 percent among Asian Americans, according to the Census Bureau’s American Community Survey. Among all ethnic groups, Cambodian Americans have the highest poverty rate in L.A. County. John S.W. Park (no relation to Kyeyoung Park), professor and chair of the Department of Asian American studies at the University of California, Santa Barbara, went so far as to say that reports like Nielsen’s are not only misleading, but also harmful. “People might get the impression that all Asian Americans are affluent, that they are a model minority, and that they are all nerdy, upper middle-class consumers,” he said.
Lo, who collaborated with the Asian Pacific American Advisory Council to compile Nielsen’s report, acknowledged that the report may leave room for counterarguments, but stressed that such efforts to highlight the habits of Asian Americans will ultimately help bridge the gap between this community and the general public.
“Several years ago, the Asian American population was statistically insignificant to even recognize,” Lo said. “We wanted to be sure as a reputable organization that the last thing we wanted was to set different baselines and put different numbers out there. Nielsen’s report includes decades of information. I think there’s power in these numbers.”
To download the Nielsen report, go to nielsen.com