Ethnic Retailing – Moving from Niche to Mainstream

Retailing is driven by people.  It is a simple fact.  The more people there are in a given area, the more retail can be supported.  Ethnic retailing in Canada is reaching a tipping point.  Just consider some of these facts:

  • 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 majority[1]

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, are well educated.  So why are retailers not jumping on this wonderful opportunity like the banks and financial institutions are?

The fact is that some retailers are seizing this opportunity particularly on the food side.  Most notable is Loblaws who 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 operational standards.  They proved the demand was there and Loblaws stepped in to buy them but has wisely left them to operate independently.  Other examples in food are stores like Freshco which has special sections that cater to the local ethnic community.  As well, there are independents like Oceans Fresh Food Market that has set up shop in the appropriate communities.

The other place where we see the ethnic impact on retailing is in e-commerce.  J.C. Williams Group produces the RetailWATCH Canadian E-tail Report, a semi-annual survey of Canadian e-commerce shopping habits.  What we have found over the past three years that we have been conducting this survey is that many Canadians—more than one-half—purchase products from outside of Canada.  These purchases 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 purchases made there, up from 10% two years ago.  The motivation for buying from Asia is lower prices, 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.

On the other hand, we continue to see retailers that ignore the fact that their customers are changing.  Take a look at the average Canadian retailer’s website. While there are more 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?  Here is a short list.

  • 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



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