Asian Immigrants Provide New Marketing Opportunity in Canada
By Linda Winick
A dramatic increase in the number of Asian immigrants in Canada will have major implications for food manufacturers and retailers.
In the next four years, this group will account for $5 billion in incremental spending. Manufacturers and retailers need to recognize this tremendous opportunity and develop an ethnic strategy now, says Bernice Cheung, Ethnic Practice Area Lead with the Nielsen Company, the market research firm.
It is projected that 72% of the population growth in Canada will come from minorities. More than half of this growth (55%) will be Asian. And by 2031, these immigrants – some 6.3 million people from China and South Asia -- will represent 1 of 3 residents in Canada.
In a presentation at the SIAL international food show in Toronto recently, Cheung urged manufacturers and retailers to prepare for these Asian immigrants by asking themselves five key questions:
- Do you know this consumer?
- Have you quantified the opportunity?
- Is your company appropriately aligned?
- Do you track performance on ethnic initiatives?
- Have you piloted a new initiative?
Cheung said Asian families tend to be larger, including more children and seniors per household. On average, these families are a full decade younger and more highly educated than native-born Canadians. Foreign-educated Asian immigrants have lower incomes, while Canadian-educated immigrants actually earn more.
As a group, South Asians tend to be very religious with 97% reportedly having a religious affiliation. “Because many religions have dietary needs – such as vegetarian – you can create products that fulfill these needs,” advised Cheung. And a sub-group of well-to-do immigrants who come through self-employed, investors and entrepreneur immigration classes are candidates for premium products, she added.
Asian shoppers are very loyal to national brands, and view them as a strong indicator of quality, she said. Bad experiences with unsafe and contaminated products in their homelands make Asians highly distrustful of store brands. Meanwhile, Asian consumers believe that organic foods represent increased safety in food.
Asian immigrants do not trust unfamiliar products, according to Cheung. So building brand awareness is essential for manufacturers looking to capture a share of this market.
She said Chinese love ethnic grocers and warehouse clubs, while South Asians love discount banners and drug stores. Asian shoppers compartmentalize their purchases, visiting two or more stores as part of their planned trip (for example, a traditional banner and an ethnic store). In fact, 90% of Chinese immigrants and 80% of South Asian immigrants employ the two-list shopping strategy. Manufacturers should make sure they have a presence in ethnic stores, she urged.
Asian consumers view grocery shopping as fun, family time. They are likely to have the entire family -- three generations -- included on their shopping trip. While in the store, more than half of them (56%) actively seek a demo in-store before buying.
“They treat grocery shopping as a family excursion, with multiple decision-makers involved in the purchase decisions,” explained Cheung. So retailers would be well-served to create a fun, interactive store environment.
She offered several other marketing suggestions:
- Deals, such as direct price cuts or buy-one-get-one, are very popular with Asians.
- TV is more important to Asians than Canadians for getting food and beverage information.
- Direct mail is a good choice for reaching Asians, since they tend to live in concentrated geographic areas.