An undiscovered market

By GREG B. MACABENTA
Filipinas Magazine
In October 2000, at a whole-day conference in New York organized by the Association of Asian American Advertising Agencies (A5), the forerunner of the Asian American Advertising Federation (3AF), “the business case for Asian American marketing” was the focus of discussion.

The organizers of the conference wanted to call attention to the importance of Asian Americans as a consumer market and to the fact that this was not reflected in the segment’s share of advertising dollars being spent by corporate America.

Ironically, while speaker after speaker spoke in glowing terms about the buying power of Asian Americans, not one touched on the second largest Asian ethnic group in the US and the largest in California, based on the 1990 US census: Filipino Americans.

Fortunately, I was among the speakers and my topic, entitled, “Filipino Americans, a Rich Market Waiting to be Tapped,” made up for the omission.

It happened again last March at the 3AF Asian marketing conference in Las Vegas. No discussion of Filipino consumers was held. This time, it was because the panelist invited to speak about our community admitted that she did not know enough.

Unfortunately, this seems to be the case with many US marketing firms that should logically be benefiting from this “rich market waiting to be tapped.” There is much that they do not know or appreciate about Filipinos in America.

Fil-Ams – impossible to classify

To begin with, Filipinos are caught in some form of marketing limbo. Even the US government sometimes identifies “Filipinos” as an ethnic group apart from Asians, as if we were not from Asia. Being relatively proficient in English, we are also considered “fully assimilated” and, therefore, do not require dedicated advertising and promotions campaigns. It doesn’t help that our leading print media, including Filipinas Magazine, are in English, while most other Asian publications are in their respective languages and script.

Even the number of Filipinos in the US has been uncertain. Because the 2000 US census, for the first time, drew a distinction between the “single race” and “bi-racial/multi-racial” population, demographers often tend to pick the single race figure when citing the official number of Filipinos in the US

What is not fully appreciated is that Filipinos are predominantly multi-racial because of centuries of contact and intermarriage with people from around Asia, the Middle East, Europe and the Americas. In fact, the Philippines is, quite likely, the only other country with an ethnic mix like the United States, with racial strains markedly Malayan, Spanish, Mexican and Chinese.

It took some insistence and persistence on our part among our colleagues in the 3AF to get across the fact that the total Filipino population, based on the 2000 Census, was the sum of the single race figure, 1,850,314, and the bi-racial/multi-racial number, 514,501 or 2,364,815. This made our community the second largest Asian ethnic group in the US, next to the Chinese.

Since 2000, the Asian population in the US has grown substantially, Filipinos along with it. The “2008 Statistical Portrait of Asian Americans, Native Hawaiians and Other Pacific Islanders,” recently released by the University of California in Los Angeles, tells us that Filipinos now account for 2.9 million or 19.5% of the 14.9 million ethnic Asians in America—an increase of over 22%. We’re second only to the Chinese (3.6 million) and are ahead of the Asian Indians (2.7 million), Vietnamese (1.6 million), Koreans (1.5 million) and Japanese (1.2 million).

Fil-Ams are consumers

But even 2.9 million is not a firm number, especially for marketing purposes. After all, consumers are consumers, whether they are citizens, green card holders or of uncertain immigration status. Aside from the significant number of “uncountables,” the fact that Filipinos have predominantly Hispanic surnames has resulted in undercounting and misclassification in the Census. Similarly Chinese-Filipinos or Chinoys—whose buying and consumption habits are decidedly Pinoy—are often classified as Chinese.

For this reason, the knowledgeable Filipino-owned businesses in America, like the Seafood City Supermarket chain, prefer to use what they consider the more realistic figure of 3.5 to 4 million target Filipino consumers for marketing planning purposes. A huge and profitable consumer base, any way you look at it.

The success of Seafood City appears to be proving its strategy right. The chain now has 15 stores in California and Nevada, including a 70,000-square-foot facility in Vallejo, a 60,000-square-foot branch in Sacramento and a 50,000-square-foot store in Las Vegas. Many of these stores also house some of the biggest Filipino brands, like Max Fried Chicken, Red Ribbon, Chow King, Jollibee, Ayala Corporation, PNB Express Padala, Mango Tours, Atlas Cargo and Valerio’s Bakery. These companies are selling mainly to Pinoys and are making a mint.

UCLA’s demographics

While the UCLA report gave mostly total Asian numbers, with respect to factors like median family income, employment, poverty level, education and age distribution, the report, “We the People: Asians in the United States,” based on the 2000 Census, yields some valuable details broken down by ethnicity. According to this report:

• Filipinos hold more management and white collar jobs than the US and Asian average: 83.8% versus 75.2% and 82.7%, respectively. And more high school graduates and holders of college or bachelor’s degrees or higher than the US and Asian average: 87.3% versus 80.4%.

• Our median annual family income is well above the US and Asian average: $65,189 versus $50,046 and $59,324, respectively. We are behind the Japanese (($70,849) and Asian Indians (($70,708) but are ahead of the Chinese ($60,058), Koreans ($47,624) and Vietnamese ($47,103).

• Filipinos have the lowest poverty rate: 6.3% vs. the US and Asian averages of 12.4% and 12.6%, respectively.

• We have the highest percentage of households with three or more income earners at 29.6% (“We the American Asians,” 1990 Census).

• Filipino females have the highest participation in the labor force at 65.2% versus the Chinese (56.8%), Vietnamese (56.4%), Asian Indians (54.0%) and Koreans (52.8%). On the other hand, Filipino males are second only to Asian Indians in terms of labor force participation (71.0% versus 79.1%), and well ahead of the Chinese (69.3%), Koreans (69.0%), Japanese (68.8%) and Vietnamese (67.7%).

• Home ownership is high among Filipinos at 60.0%, just slightly behind the Japanese (60.8%) and ahead of the Chinese (58.3%), Vietnamese (53.2%), Asian Indians (46.9%) and Koreans (40.1%).

• The extended family system, characterized by adult and married children living with their parents or siblings, results in a higher annual household income and makes it easier for Filipinos to buy homes instead of renting—a significant advantage in these days of home foreclosures.

• More income earners and more homeowners mean more furniture, more appliances and electronic devices, more cars, more clothes, more expenses on entertainment, communication and leisure and more consumption of food and drinks.

Prime target market

There are other key psychographic characteristics that make us a prime market target. We are acquisitive, fashion and lifestyle conscious, committed to higher education and oriented to home ownership and we hold frequent family get-togethers and will throw a party at the drop of a hat, whether it’s for a baptism, a birthday, a wedding or a wake.

Aside from the obviously high consumption of food and beverages, this family-oriented lifestyle is manifested in the proliferation of mini-vans among Pinoy households, the better for large families to travel frequently from relative to relative and to load balikbayan boxes to ship to the homeland.

In times of economic stress and fierce competition, the incremental volume that the Filipino consumer market can yield can translate into substantial profits. The heal-thy growth of businesses selling mainly to Pinoys is proof of that.

In fact, some of the large Filipino companies are not all interested in having “their” market discovered by the American mainstream. Said one manager of a fastfood chain: “We’d rather have the Pinoys all to ourselves.”

Unfortunately, this has resulted in smugness, a tendency to think that Filipino consumers are automatically and permanently “in their pockets,” even without any promotional efforts.

Nothing could be more untrue. When a Pinoy is overlooked or ignored by the mainstream, he takes it in stride. But he actively resents being taken for granted by a Filipino-owned business. Some of the largest Philippine brands, including San Miguel Beer and Sarsi, have failed in the US because of this.

Meanwhile, it looks like our undiscovered goldmine will not remain untapped for long. Major marketers like Wal-mart and Macy’s have begun to reach out to Fil-Am consumers and, more recently, McDonald’s has stepped into the scene.

Perhaps some Philippine brands had better wake up.

About the author
Greg Macabenta is the editor-in-chief and publisher of Filipinas Magazine.

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