Ethnic retailing in Canada is reaching a tipping point. Just consider…
• 305,000 immigrants come to Canada every year
• They make up a $100+ billion marketplace
• 20% of the Canadian population is foreign born
• $1 in $3 spent on consumer goods is spent by ethnic consumers
• By 2017, one-half the populations in Toronto and Vancouver will be ethnic majority1
The two largest immigrant groups in Canada are East Asians (Chinese, Korean, Japanese) and South Asians (Indian, Pakistani, Sri Lankan) that will grow by 16.9% and 20.8% respectively over the next five years.2 These populations are younger and, in many cases, well educated.
So why are retailers not jumping on this wonderful opportunity like the banks and financial institutions are?
There are a few companies that see which way the wind is blowing; Loblaws bought T&T a few years ago. T&T was developed by a very smart Chinese entrepreneur who saw the opportunity for a Chinese grocery store with Western-style operations. It proved the demand was there and Loblaws bought in, but T&T has wisely been allowed to operate independently.
The lack of physical retail options for new Canadians means many of them turn to ecommerce. J.C. Williams Group produces the Canadian E-tail Report, a semi-annual survey of Canadian e-commerce shopping habits. We have found over the past three years that many Canadians — more than one-half — purchase products from outside of Canada that are distributed across the U.S., Asia, and Europe. While the U.S. continues to be the location where the most cross-border purchases are made, Asia is number two with more than 13.5% of online purchases — up from 10% two years ago.
Granted, lower prices drive a lot of e-business to Asia, but we also believe that Asian websites offer products that are familiar to ethnic Canadians. Many of these products may not be widely available in Canada.
It’s obvious that many retailers simply don’t understand (or chose to ignore) their changing customer base. Take a look at the average Canadian retailer’s website. While there are increasing numbers of black models, the Asian and South Asian models are mostly not there. This does not reassure these customers that the retailer even knows that they exist.
So what should retailers be doing?
• Learn the facts about how many ethnic customers exist and where they are in the trade areas of your stores
• Learn about the preferences of these customers and how that should affect your products
• Look at your workforce. Make sure that your sales people can communicate with these new customers
• Develop a plan now. It is the future!
1 Ethnicity Marketing + Advertising
2 Statistics Canada/J.C. Williams Group