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Why you can’t afford to leave multicultural Australians out of your marketing plan any longer 

It could be the single biggest lever for achieving market growth. But how many marketers can honestly say they’re targeting Australia’s multicultural consumers as their next untapped segment?

We explore why it’s high time you started adopting a multicultural marketing strategy and share practical steps to get behind this significant growth opportunity.

It was Procter & Gamble’s Chief Brand Officer, Marc Pritchard, who declared multicultural marketing the single biggest source of market growth in the FMCG industry for the next several years, perhaps even decades.  

In a 2021 manifesto called ‘New habits for multicultural growth’, the revered marketing leader called out the fact more than 4 in 10 US consumers come from culturally diverse backgrounds, yet brands are only scratching the surface when it comes to engaging with them.  

“We’ve been talking for years about the wakeup alarm for seizing the growth opportunity in multicultural marketing and making commitments to do better. But we keep hitting the snooze button,” Pritchard wrote.  

Looking at the opportunity through its own brand portfolio, P&G found more than half of sales growth in North America came from multicultural consumer segments over the prior year. Among top brands, P&G holds top two market share for nearly all 10 categories in which we compete among Black, Hispanic, Asian American Pacific Islander and LGBTQ+ consumers.  

“A deeper dive reveals several brands with multicultural market shares that are below the national average – we call that the ‘multicultural share gap’. Simply closing those gaps to achieve shares to be even with the national average would be worth more than US$500 million in extra sales annually,” Pritchard continued. “I’m hard pressed to find any other opportunities that even come close.” 

Notably, Pritchard pointed out the multicultural marketing opportunity is not a new one. The fact brands still aren’t getting it is therefore of particular concern.  

“We simply have a lot of entrenched marketing habits, and old habits are hard to break. They’re comfortable, safe, and they’ve worked for us in the past – all key factors when you consider how perilous marketing can be in today’s world,” he stated.  

The facts and figures 

In an Australian context, the multicultural marketing opportunity is even more significant based on percentage of population. According to Australian Bureau of Statistics (ABS) 2021 Census data, 29.3% of the population in Australia was born overseas. That’s 7 million people. The figure was up from 6.1 million just five years earlier and compares to a ratio of 17.7% back when the first Census was done in 1911.  

In addition, 22.2% of people living in Australia who are Australian born have one or both parents born overseas. That means 51.5% of the 26 million of us recorded living in Australia in 2021 are first or second-generation multicultural Australians. 

“Australia is one of the most multicultural nations of earth,” comments CulturalPulse CEO, Reg Raghavan. “Post-Census, newspapers reported the average Australia was a white female between 30-39. This makes little sense.  

“Australians born overseas or with a parent born overseas will rise to 56% in only two years. Multicultural is now mainstream.” 

There are several other important facts many marketing professionals may not be aware of which further illustrate why multicultural marketing requires a more strategic, proactive approach.  

In 2021, 5.8 million people (22.8%) reported using a language other than English at home, up from 4.9 million people in 2016. The most common languages spoken outside of English are Mandarin (2.7%), Arabic (1.4%), Vietnamese (1.3%), Cantonese (1.2%) and Punjabi (0.9%). However, the fastest growing language over the five years between Census surveys is Punjabi, with 107,000 more speakers in 2021, an increase of 80.4%. In 2021, almost three quarters (74.3%) of people who used Punjabi at home were born in India. In all, 300+ languages are spoken at home in Australia, and more than 300 ancestries are identified with. 

Where are these culturally and linguistically diverse (CALD) consumers located? The short answer is everywhere. States with the highest proportion of overseas born constituents are WA (32.3%), Victoria (29.9%) and NSW (29.3%). But areas with the highest proportion of their population born overseas are situated in urban New South Wales and Victoria. The ABS suggests the reason for this may be to settle with other migrant communities, or to access support services, employment or education. The suburb with the highest percentage of multicultural citizens in Auburn in western Sydney at 61.7%, while the statistical area level 3 (at least 20,000 residents) with the highest number of countries by birth (183) was Sydney Inner City.  

The cultural make-up these consumers identify with may also come as a surprise. The top five countries by birth are: England (3.6%, 927,000), India (2.6%, 673,000), China (2.2%, 549,000), NZ (2.1%, 530,000), and the Philippines (1.2%, 293,000). Yet the largest increases by ethnicity over the last five years are India (47.9% increase), Nepal (123.7%), Philippines (26.5%), China (7.9%), Vietnam (17.6%). Proportionately, the number of people in Australian born in England has decreased from 6.6% in 1971 to 3.6% of the population in 2021.   

It’s also worth noting 3.2% of the total population identified as Aboriginal or Torres Strait Islander in 2021 (812,728), up from 2.8% in 2016 (649,171).  

Grouped into continents, these figures show 57.2% of the Australian population as from European ancestry (including 46% North-West European and 11.2% Southern and Eastern European), 33.8% from Oceania (including 29.9% Australian); 17.4% from Asia (including 6.5% Southern and Central Asia, 6.4% North-East Asian, and 4.5% South-East Asian), 3.2% from North African and Middle Eastern countries, 1.4% from the Americas, and 1.3% from Sub-Saharan Africa.  

In the 2021 census, the top 10 commonly nominated individual ancestries as a proportion of the entire Australian population were: English (33%), Australia (29.9%), Irish (9.5%), Scottish (8.6%), Chinese (5.5%), Italian (4.4%), German (4%), Indian (3.1%), Aboriginal (2.9%) and Greek (1.7%).  

Put all these figures together, and the size of the multicultural prize in demographic terms is huge. However, it can be more challenging to express this in commercial terms. Diversity Council Australia references MultiCall figures from 2013 reporting the Australian ‘multicultural market’ has an estimated purchasing power of more than $75 billion per year.  

A 2017 Nielsen Ethnic-Australian Consumer Report found migrant-Australian FMCG expenditure is growing at a faster rate than Australian-born. The report predicted migrant-Australians’ spend will grow at a faster rate than their Australian-born counterparts, accounting for over $4.4 billion in incremental revenue. This will result in the migrant-Australian shopper contributing a total of $18.7 billion, or 28%, of the total FMCG retail channel. 

Why multicultural consumers are good for brands 

So aside from sheer numbers, what makes multicultural consumers such a commercially appealing opportunity for brands today?  

For one, it expands the total addressable market. For another, it gives brands momentum to diversify and develop products and services for different cultural and linguistically diverse markets. Just take The A2 Milk Company example. The ASX-listed FMCG has made significant efforts to expand its support of the Daigou network through events and outreach in order to better engage and educate a wider array of customers about the benefits of A1 protein free dairy and its refreshed a2 Platinum products. 

Fuelling innovation and creativity, as well as inspiring new product concepts and business models, are extra benefits that come from cultural cognisance and inclusivity. 

For Raghavan, understanding a consumer’s cultural lineage and how this informs their brand affinities, behaviours, consumption patterns and who they trust and listen to gives brands a toolkit to service customers in a more granular, authentic way. 

“Brands can target specific niche markets within different ethnic communities, and tailor marketing strategies and products to meet specific cultural preferences,” he says. “Identifying segments and niche markets can aid acquisition and loyalty. It can give you an ability to find a differentiator against competitors.” 

Being a brand that is more social and relatable, especially in the eyes of younger audiences, is a further growth outcome. As was reported in the 2023 JCDecaux report, Gen Z: The IRL Opportunity, 71% of younger consumers will pay more for good and services aligning with their core beliefs.  Snapchat found 44% of Gen Z globally think it’s more important brands build connections with them. Achieving this means creating authentic brand experiences and more accurate reflections of broader society. And how much more authentic can you get than by recognising the cultural diversity of your consumers? 

To put it in the language of acquisition, multicultural marketing can broaden your market reach.  

“Embracing multicultural diversity allows us to tap into untapped markets, attracting a wider range of customers from diverse backgrounds,” Raghavan says. “Understanding the preferences and needs of different cultural communities enables us to create targeted campaigns that resonate with specific customer segments. 

“By celebrating multicultural diversity, we enhance brand’s visibility and attract customers who value inclusive and culturally aware brands.”  

Further through the funnel, a multicultural approach helps marketers understand the unique needs and behaviours of diverse customer segments, thereby providing the know-how to deliver personalised experiences and foster stronger customer relationships. 

“Demonstrating cultural sensitivity in marketing builds trust and strengthens the bond with multicultural customers, increasing loyalty,” Raghavan continues. “Embracing multicultural diversity allows us to create genuine brand experiences that align with the values and cultural backgrounds of customers.” 

“By celebrating and embracing multicultural diversity, we make our customers feel valued and represented, fostering a sense of connection to the brand.”  

By fostering a sense of community and belonging, brands can create loyal brand advocates who actively promote those brands within their own cultural networks. Don’t forget, brand awareness and loyalty don’t often exist new migrants either. Many new multicultural Australians don’t know the difference between CommBank, ANZ, NAB or Westpac, nor have they developed a preference between Coles, Woolworths or Aldi. But this can quickly change and be influenced by the referrals they receive from multicultural friends and family who have been in the country for longer.  

“Satisfied multicultural customers who feel seen and respected are more likely to spread the word about their positive experiences, generating valuable word-of-mouth referrals,” Raghavan says. “By providing exceptional multicultural experiences and demonstrating commitment to diversity, we can turn loyal customers into brand advocates who enthusiastically refer brands to their networks.”