Canada is one of the most multicultural nations in the world—and especially so among developed countries. According to Statistics Canada, about one in five residents was foreign-born in 2011, the highest percentage among G8 nations. Other recent studies have shown Canada to be the most culturally diverse of any Western country, according to a new eMarketer report, “Canada Multicultural Marketing: Segmentation by Ethnicity Is Not Enough.”
This demographic trend is expected to continue. By 2031, foreign-born residents will exceed one-quarter of the country’s populace, Statistics Canada predicted. For a good portion of that period, Chinese and South Asians will make up the largest segments of that immigrant population, according to Environics Analytics.
Spending power data has most brands taking closer notice of recent immigrant potential. Not only do recent immigrants represent a new and consistently growing consumer base, they are also arriving in better financial position than previous generations, reflecting the current skew in Canada’s immigration policy toward admitting skilled professionals.
Environics Analytics’ research illustrates the socioeconomic position of ethnic groups in Canada. Household spending from the two largest groups (South Asians and Chinese-Canadians) combined accounted for nearly 9% of total consumer expenditure in Canada in 2013, a proportion similar to these groups’ share of the overall population. More telling, however, is the substantially higher rate of spending growth among these two populations compared with the average consumer in Canada. South Asians and Chinese-Canadians reported 2013 household spending growth of 9% and 5%, respectively, vs. just 2% for the average consumer household, according to the company’s “Ethnic Marketing in Canada” report.
Overall, visible minority ethnic groups far outpaced the average nonvisible-minority resident in consumer spending growth from 2008 to 2013. Nonvisible-minority spending during the period rose by just 13%, compared with growth rates in excess of 100% for Latino and Arab-Canadians, 76% for South Asians, 40% for Chinese-Canadians and 78% for other visible minorities.
Multicultural consumer spending power is attractive for brands in Canada looking for new sources of consumer growth. But segmenting along ethnic lines alone—a popular approach for brands first entering the multicultural market—is not enough. Using demographic and behavioral targeting tactics is a must for marketers looking to reach ethnic groups active across digital channels.