Hispanics have the greatest purchasing power of any U.S. ethnic group hitting $1 trillion in 2010 and well on its way to a 50% increase to $1.5 trillion by 2015. So I think this type of buying influence requires very thoughtful understanding of what the market represents to the bottom line of U.S. companies.
Consider the following three statistics:
- 50% of all U.S. Hispanic Households earn $50K or more
- Hispanic households with $50K+ incomes are growing at a faster rate than total households.
- Hispanic incomes are growing the fastest in the $75,000 to $99,000 category
Hispanics are no longer just a sub-segment of the economy, but a prominent player in all aspects of American economic life.
In a study released in May this year, Nielsen’s director for public affairs and governmental relations noted that even though Hispanics shop less often than non-Hispanics, they tend to spend more money when they do shop. Adding that any company that wants to develop and grow in the United States has to attract the Hispanic consumer. It’s a must.
Interestingly, many companies believe that significant growth opportunities can only come from outside the U.S., but they haven’t stopped to really consider that done correctly, the Hispanic market offers unique growth prospects within our own borders. This should not be surprising given that the U.S. Hispanic population is larger than many countries considered attractive prospects by corporate America.
- Canada (33.8)
- Argentina (41.3)
- Colombia (44.2)
- Spain (46.5)
- Mexico (112.5)
In fact, if the U.S. Hispanic market were a standalone country, its current buying power would make it the 12th largest economy in the world and by 2015 it is projected to become the 9th largest! It is astounding to think the U.S. Hispanic market is one of the top ten economies in the world.
What’s more, the per capita income of U.S. Hispanics is higher than any one of the highly coveted BRIC countries (Brazil, Russia, India, and China). And as we know, most of our companies are allocating billions of dollars to expand into these countries where per capita buying power is a fraction of what it is among U.S. Hispanics. And to do so effectively, they have to deal with at least six major issues and hurdles including:
- Creating entire organizations from the ground up
- Currency exchange and devaluations
- Learning how to do business in those countries
- Grappling with inconsistent infrastructures
- Wrestling with foreign laws and restrictions
- Paying assorted duties and taxes
All the while, we have the world’s 9th largest economy in our own back yard!
If the present U.S. economy substantially benefits from Hispanics, the future U.S. economy will depend on Hispanics by virtue of demographic change and the social and cultural shifts expected to accompany their continued growth. If that doesn’t make you rethink priorities, I’m not sure what would. Are your Hispanic market strategies relevant to succeed among US Hispanics? What steps are you taking to ensure you ride the wave of this economic powerhouse to achieve dramatic growth for your company?