Meanwhile, Asian Americans in general are getting richer and richer. As the eBrokerage market gets saturated, firms will need to target such premium groups. But competition amongst eBrokerages targeting Asian Americans is already growing fast, so the firms that do not currently target this ethnic segment need to act now.
Sina.com, a leading media and service company for the worldwide ethnic Chinese population, has unveiled results of a survey carried out on 4000 Chinese Americans highlighting key trading and investment habits of this market segment.
As confirmed by Census Bureau statistics, the Asian American market is a very affluent segment. The 12 million Asian Americans are expected to spend over $250 billion in 2001, which represents a 124% growth rate in purchasing power since 1990, while the median household income of $51,205 is 15% higher than that of white households. Asian Americans present key opportunities for FSIs eager to expand their customer base, especially in online brokerage.
The results of Sina's survey confirm that ethnic Chinese Americans are an ideal target for online investment firms: over 90% of the sample claim to invest in the stock market and while 50% of the respondents identified themselves as short to mid-term investors, most of them (80% of the sample) admitted to trading online.
Brokerage firms have identified growth opportunities within the Asian American market segment and are launching specific marketing campaigns to target this ethnic group. Charles Schwab and TD Waterhouse have recently hired Chinese-speaking agents in their branches and for their call centers, while CNA Life, E*Trade, HSBC and Scottrade are advertising and partnering with sites such as Sina.com's financial channel to reach Chinese Americans.
Datamonitor predicts that the cost of acquiring an eBroking customer will rise to around $300 in 2001. As a result, eBrokerages should target their efforts at the market segments that offer the largest potential for growth. While some eBrokerages such as E*Trade and Schwab have set up websites in Chinese, some leading players still have to do so. The growing affluence of Chinese Americans, combined with the high proportion of online traders within this community is making it a prime market to target now, as competition is getting fiercer for acquiring new eBroking customers.