Tapping Buyers' Market : Consortium Reaches Out to Asian American Consumers

By EVELYN IRITANI

March 27, 1997 12 AM PT

TIMES STAFF WRITER

As former employees of large U.S. companies, Pierre Wuu and Chin Yao know what generally happens when a small-business owner asks for a discount. Nothing.

So when these refugees of corporate America struck out on their own, they decided to help other Asian American entrepreneurs grab the attention of the nation’s largest companies by leveraging them to the top of the callback list.

In a little over a year, their Asian Buying Consortium, with offices in Los Angeles and Fremont, has attracted 60,000 members, largely by signing up groups such as the Los Angeles-based Asian Professional Exchange and the Bay Area Asian American Manufacturers Assn.

Using this pool of potential consumers as bait, Wuu and Yao were able to persuade companies such as DHL Worldwide Express and AirTouch Cellular to offer their members discounts of up to 50%.

Large corporations and groups such as the American Assn. of Retired Persons have used this tactic successfully for years. But this is a relatively new concept for the Asian American community, where ethnic diversity and language barriers have made it difficult for consumers to organize or companies to penetrate.

That is changing, with the recognition that Asian Americans, the nation’s fastest-growing ethnic community, are a force to be reckoned with.

Asian Americans represent a combined purchasing power of more than $35 billion annually, with an annual household income of more than $6,000 above the national average, according to LEAP Asian Pacific American Public Policy Institute and A Magazine, a New York-based magazine targeting the Asian American community.

“There are certain buying considerations that you need to consider,” said Yao, a 26-year-old Los Angeles native. “Asian Americans are more likely than anybody else to be calling back and forth to Asia. The same thing goes for travel, whether it is business or leisure.”

But these consumers can’t always be reached through traditional marketing campaigns. The Asian American community has a high percentage of small, family-owned businesses, many of which rely on ethnic media for their news.

The Asian Buying Consortium offers an alternative. The founders have kept the annual membership fee low--$10 for individuals and $25 for companies--and have offered free membership to nonprofit organizations.

Yao said many U.S. companies have failed to recognize the unique characteristics about this diverse community, which covers hundreds of ethnic groups and includes some of the wealthiest and poorest individuals in the U.S.

For Redwood City, Calif.-based DHL, this unusual buying club is a perfect avenue into a new market that can be difficult to penetrate because of language and cultural barriers.

Recent immigrants are also more likely to have personal or business contacts overseas, giving DHL another avenue into the lucrative Asian express mail market.

“We want to target these recent immigrants who are familiar with DHL and would be doing a large amount of international shipping, which is our core business,” said David Fonkulsrud, a DHL spokesman.

Like most entrepreneurs, Jeff Lee, the owner of a small West Covina company called Ultimate Sports, doesn’t have a dime to spare. He sells his customized fanny packs and vests for fishermen through mail order and dealers, including Thrifty Payless Drugs, Big 5 Sporting Goods stores and Sports Chalet.

Since joining the Asian Buying Consortium, Lee figures he saves $40 to $50 a month on express mail and long-distance phone calls. He also hopes to drum up more business by linking his World Wide Web page to the one produced by the Asian Buying Consortium.

The consortium’s Web page (https://www.abcflash.com, which is offline temporarily because of server problems) features profiles on Asian American entrepreneurs, information on nonprofit organizations, an events calendar and a list of services available through the consortium.

Wuu said the Web site, which was launched in November with a focus on the Bay Area, is already getting close to 250,000 hits a month. The company hopes to expand to include other cities with large Asian American communities.

“The Internet is going to be a huge player in this community, whether for information or business,” he said. “If you look at the stats, out of all the Internet users, there are an abnormally large number of Asian Americans that are online and go to Web sites religiously for information.”

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Buyers’ Club

Snapshots of typical Asian Buying Consortium member

Gender: Equally divided between men and women

Typical Age: 21 to 60

Home (top five):

San Francisco Bay Area

Los Angeles

New York

Chicago

Seattle

Typical Income: $40,000 to $45,000