Booming Hispanic Market Opens Business Opportunities
The rapidly growing Hispanic population will have a profound effect on the landscape of the small business community, said marketing expert Chiqui Cartagena, who also noted that Latino women now make up the fastest growing segment of entrepreneurs in the United States.
Latinos accounted for about 15 percent of the total U.S. population in July 2007 with a spending power of $850 billion. Projections show that figure is likely to exceed $1 trillion by 2010, according to Cartagena, who is the author of Latino Boom! Everything You Need to Know to Grow Your Business in the Hispanic Market.
Cartagena spoke to an attentive audience in the packed National Press Club ballroom Thursday morning where a half-day conference, Latino Buying Power, was hosted by the Greater Washington Board of Trade.
She said 53 percent of Hispanics owned homes in 2006 and will make up 40 percent of new home buyers over the next 20 years, opening business and marketing opportunities for banks, home furnishing stores and other companies catering to home ownership. But Hispanic buying power is not limited to real estate. According to data from Geoscape that Cartagena cited, Hispanics tend to spend more on groceries, phone services, furniture, gasoline, children's clothing and footwear.
Her data show that Mexicans make up 67 percent of Hispanics in the United States, Central and South Americans make up 14 percent, followed by Puerto Ricans at 9 percent, Cubans with 4 percent and "other" Hispanics at 6 percent. Thirty-five percent of all Hispanics in the United States are under the age of 18 and 50 percent are under 34.
While Hispanic communities in the United States traditionally have been located in states such as California, New York and Texas, there's been explosive growth in areas like Raleigh and Greensboro, N.C., and Atlanta, Ga. Virginia and Delaware are also high-growth states.
Hispanic babies made up about a quarter of all U.S. births in 2006, generating Hispanic demand for baby and mom-centric products and creating marketing opportunities for businesses in those areas.
Sixty-two percent of new business owners in the United States are Latino women, according to government data. The number of Latina entrepreneurs is growing, Cartagena said in an interview with the Small Business Blog, because entrepreneurship is part of the Latin American tradition. "It's not seen as risky," she said.
A lot of these women have found success through direct sales companies like Avon, Mary Kay and Tupperware, she said. "And those women are encouraging their children to start their own business," whether it's a day care center or a food stand.
"Right beyond the baby boomers [what] we always hear about is our boom," said Cartagena, who was born in Madrid, and is now the managing director of Hispanic ventures with publishing house Meredith. "We are literally the economic backbone of this country...If you want your company to grow, you better market to Latinos or you're missing the boat."
In the Washington metropolitan area, Hispanics make up just over 11 percent of the population. African-Americans make up about 25 percent and Asian-Americans account for 8.5 percent.
"Businesses should note that in the D.C. area over 40 percent of your potential buyers are not white," Cartagena said.
In 2006, Hispanics of Mexican origin surged ahead of Salvadoreans and now are the largest group of Hispanics living in the D.C. metro area, which boasts the highest median household income - at about $60,000 - in the Hispanic market.
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