Hispanic Consumers to Spend $1.3 trillion in 2015, Prompting National Economic Growth
Hispanic consumers continue to outspend other groups when it comes to groceries, used cars and phone services. Their $1.3 trillion in economic contribution drives U.S. consumer markets.
Thursday, Sept. 24, Terry College's Selig Center for Economic Growth published its annual "Multicultural Economy Report" on the state of the U.S. multicultural economy. It found that there have been notable increases among Hispanic and Asians, instigating overall national growth.
The report found Hispanic consumers will spend $1.3 trillion in 2015, which is larger than the gross domestic product of Mexico. Moreover, U.S. Hispanic spending is expected to reach $1.7 trillion by 2020. Both Hispanics and Asians will contribute $13.5 trillion in 2015 and $16.2 trillion in buying power by 2020. These consumer markets will drive overall U.S. consumer markets.
Largely, Hispanics spend most of their money on groceries, clothes, used cars and phone services. However, they're less likely to spend their wages on entertainment, health care, new cars, tobacco and personal insurance.
"The Asian and Hispanic markets will really drive the U.S. consumer market," said Jeff Humphreys, director of the Selig Center, according to a press release. "Those two groups will account for a disproportionate amount of growth. The African-American market will still expand at a rate that's compelling, but the Asian and Hispanic markets are where you see the really fast-paced growth."
According to the report, there are distinctions among different Hispanic subgroups. Cubans account for 5.3 percent of the Hispanic market, which is $70 billion in spending. South Americans are responsible for $117 billion in buying power (8.8 percent). Central Americans contribute $117 billion in buying power (8.8 percent). Additionally, Puerto Ricans and Mexicans account for $143 billion and $751 billion in buying power, respectively (10.8 percent and 56.8 percent of U.S. Hispanic market).
The "Multicultural Economy" report asserts that Hispanics and Asians account for $2 trillion of the nation's $13.5 trillion in buying power in 2015. Total buying power has increased 213 percent in the past quarter-century. This can be attributed to an increasingly diverse populace.
The data-rich study could help businesses to fine-tune their marketing efforts toward specific consumers. Within each large ethnic group, there are very distinct subgroups. These subgroups differ culturally, and they respond to advertising differently. Unique trends that originate from individual countries of origins defeat the one-size-fits-all marketing strategy.
Approximately 35 percent of Hispanics are under the age of 18, compared to only 20.8 percent of the non-Hispanic population. The report author indicated that the importance of the Hispanic consumer should be a wake-up call to corporate America.
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