Asian-Americans represent the highest percentage of entrepreneurs of any ethnic or racial group in America, and are in the fastest-growing area of the U.S. economy today. According to the U.S. Economic Census 1996 and Asian-American Almanac, there are over 603,000 Asian-owned business in the United States, with $100 billion in total billings.
These businesses represent great opportunities for business-to-business marketers. There are two key categories that are naturals: telecommunications and fin ancial services. While some companies are doing a good job at serving these needs for Asian-Americans, others are largely ignoring this market.
What are the opportunities and challenges of serving this community? We’ll address that in a moment. First, a bit of background.
A DIVERSE GROUP
Contrary to popular perception, Asians are not homogenous any more than Europeans are. Asians are a highly diverse group comprised of people from different countries and cultures, and speaking different languages. There are six nationalities that constitute approximately 85% of Asians in this country (in order of population): Chinese, Filipino, Asian Indian, Japanese, Korean and Vietnamese. And these are the top six segments of entrepreneurs in the United States:
– Korean: 11.6%
– Asian Indians: 10.4%
– Chinese: 8.7%
– Vietnamese: 8.3%
– Japanese: 8%
– Filipino: 4.4%
Aside from the fact that Asians culturally tend toward entrepreneurship, there is another driving factor that has enhanced this particular characteristic among those living in this country – they are immigrants. Over 75% of Asian-Americans are foreign-born. As immigrants who for the most part come to these shores with language and cultural barriers, they have difficulty obtaining jobs in the mainstream American sector. Most are cognizant of this fact prior to their arrival, and mentally prepare themselves to start some sort of a business. Even those who have had professional or white-collar jobs back home – some with advanced degrees – often resign themselves to beginning life anew by starting a business or getting a blue-collar job that does not require English-language skills.
Consequently, according to the 1992 U.S. Economic Census, two-thirds of Asian-American-owned businesses are in the service and retail industries.
– Service: 46%
– Retail: 21%
– Finance: 10%
– Construction: 5%
– Transportation: 4%
– Wholesale: 3%
– Manufacturing: 3%
– Agriculture: 3%
– Other: 5%
Service and retail businesses are comparatively the easiest to start up for a variety of reasons. They require little capital, little staffing, and often have operation templates they can readily access. For instance, there is a preponderance of Chinese restaurants and Korean grocers in the largest metro areas in this country. These businesses have turn-key set-ups that entrepreneurs can buy into, so that they do not have start from scratch.
As immigrants acclimatize to American ways, they may “graduate” from having blue-collar jobs or being entrepreneurs to migrating into white-collar occupations. In the case of entrepreneurs, however, it sometimes means that the longer they operate a business, the more their revenues increase, which, in turn, perpetuates the continuation of their business.
The numbers speak to the success of Asian-owned businesses in the United States: The 153,096 Chinese-owned businesses in the country show gross annual receipts in the $30 billion range, according to the 1992 Census. This is followed closely by the $19 billion grossed by country’s 93,340 Asian Indian firms and the $16 billion from Korean businesses.
ON THE LOOKOUT
While some companies are doing a good job of reaching Asian consumers to market various telecommunications services, businesses – which have an even greater need for such products and services – have been largely ignored.
Small businesses are constantly on the lookout for ways to operate more efficiently, and new technology can certainly help them accomplish that.
Their needs go beyond the obvious local, long distance, domestic and international telephone services. They encompass other custom calling features, such as call waiting, call forwarding, three-way calling and voice mail. Additionally, Asians businesses require wireless service, pagers/beepers, additional phone lines for access to Internet and DSL. They also require hardware, such as cellular phones, computers and the accompanying paraphernalia.
In the financial services arena, first and foremost we constantly hear about Asian-Americans’ frustrations in obtaining loans, particularly from the larger banks that are perceived to have stricter rules and less-personal service. (This complaint, incidentally, is one voiced by immigrants from all over the globe.)
Establishing credit, a catch-22 process to these new immigrants, is very frustrating. The remedy is often borrowing from relatives or going to smaller banks or Asian banks, which are less stringent and provide the type of customer service these immigrants require.
DIFFERENT BEHAVIOR
Customer service is one area that requires somewhat different behavior when dealing with immigrants, certainly recent ones and, in many cases, even those who have been in the United States for some time.
Both the psychology and reality of displacement generate a greater need for assistance. There is the obvious language barrier for many when they arrive on these shores. Add to that their lack of familiarity with the procedures and processes in financial services, and you can imagine the confusion such immigrants can feel.
The level of service they are looking for, which they often find at Asian banks or at American banks with well-trained Asian staff, involves in-language service, but also more hand-holding where the staff will explain processes in detail, help them to fill out the forms, and allay anxieties and concerns along the way.
A most vivid example of such service is Asian real estate agents. For prospective home buyers, these agents go beyond just brokering the sale. They will help clients obtain mortgages by selecting the appropriate companies and filling out all the forms. They will also help with all the paperwork for the purchase of the homes, and often attend the actual closings with their clients.
A bank in Texas, for example, that was purchased by a Chinese entrepreneur, became the largest bank in the area simply by offering Asian and Hispanic immigrants this type of attentive service.
There are additional opportunities for business and healthcare insurance. Most immigrant businesses are either struggling to start up or stretched to fulfill expansion goals. Few appear to be thinking of the various forms of insurance they might need as entrepreneurs.
To identify the needs gaps of Asian businesses, the best test is to ask yourself what you would be feeling – what your needs would be – if you were to emigrate to Asia with your family and had to start a business. If you were to find yourself in a country whose language you did not speak and where you were unfamiliar with the business systems, what kind of help would you need? And there you’ve got the answer to where your business opportunities might be with Asian-American businesses.
Network
