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The East Also Rises

NEW YORK – Now that apparel manufacturers and retailers have begun to address the needs of African-Americans and Hispanics, the next ethnic brass ring appears to be Asian-Americans.<br><br>A number of factors make this market attractive,...

NEW YORK – Now that apparel manufacturers and retailers have begun to address the needs of African-Americans and Hispanics, the next ethnic brass ring appears to be Asian-Americans.

This story first appeared in the July 31, 2003 issue of WWD.  Subscribe Today.

A number of factors make this market attractive, including above-average birth rates and buying power, highly educated consumers and high income levels.

Jeffrey Humphreys, director of the Selig Center for Economic Development at the University of Georgia in Athens, called Asian-Americans “a marketer’s dream.”

“There’s also the fact that it’s a very highly concentrated market,” Humphreys added. “Much of it is in California. You can focus on five states and capture most of the Asian consumer market.”

Asian-Americans are among the the fastest-growing ethnic groups in the U.S.

“The only marketing challenge is that Asians come from many different countries of origin and speak many different languages,” Humphreys said. “The group is harder to target than Hispanics and hasn’t been targeted as much as African-Americans and Hispanics. It’s a smaller market.”

Still, companies with Asian customers find them to be among the most loyal and receptive.“They’re very hip customers,” said Bud Konheim, president and chief executive officer of Nicole Miller. “They’re not as interested in cheap as they are in good.

“I don’t think other retailers or manufacturers even think about it,” he added. “The Asian population is not vocal, but there they are, buying in big numbers.”

Konheim said Asian-Americans have always been a large part of Nicole Miller’s business. In fact, the company’s best-selling sizes are 0, 2, 4 and 6.

Luxury brands such as Gucci, Prada and Louis Vuitton have big businesses in the Far East, particularly in Japan. Prada recently opened an $83 million Epicenter in Tokyo. Vuitton performs extremely well in Japan. The company even hired Japanese pop artist Takashi Murakami to design a handbag, which has become a bestseller on several continents.

Gucci reportedly makes no special overtures to Asians as a group, but buyers in the U.S. program merchandise for local customers. For example, a Gucci store in Miami, where there’s a large Hispanic population, would presumably buy different items from one in San Francisco.

Chris Michels, a researcher at MapInfo, a market research firm in Troy, N.Y., said Asian-Americans buy sports and athletic clothing and fur coats. Favorite stores include the Gap, Banana Republic, Ann Taylor, Macy’s, Express, Bloomingdale’s, Saks Fifth Avenue, Costco, Nordstrom and Old Navy, he said.

Asian-Americans are also a cultured bunch. They attend live theater and music and dance events and prefer to see a movie within its first two weeks of opening.

For companies like Nicole Miller, 9/11 took a toll, especially on the West Coast. The company has such a big Asian following that Konheim discovered 17 illegal Nicole Miller stores operating in China. “They were not licensed stores,” he said.

“We’re going to go back to Shanghai to license our own stores,” Konheim added, noting that Nicole Miller has units in Tokyo, Osaka and Kyoto, and in-store shops throughout Japan.