In a saturated market, companies are always challenged when looking for growth opportunities. By and large, customer centric companies tend to grow revenue in two ways: Acquire new customers from competitors, or grow existing customer’s share of wallet.

For New Zealand companies, there’s a golden opportunity and third way to grow: By acquiring new migrants entering the country.

Here are three compelling reasons why migrants matter as a key segment for companies looking for new growth.

 

1. Migrant segment is big at 25% of population… And will only get bigger.

New Zealand has a population of 4.4 million as of 2013 Census data. The data also churned out the famous one-liner insight “1 out of 4 Kiwis are born overseas”. For the first time, people born overseas exceeded 1 million or 25% of NZ Population.

Just last month, Stats NZ for the first time shared population projections that gave us a glimpse of ethnic composition over the next 20 years.

The next Census is taking place in March 2018 and based on the continuing record levels of net migration, it’s possible the updated one-liner will be “1 out of 3 Kiwis are born overseas”.

 

2. Migrant segment is fastest growing consumer group at 11% annually since 2013.

When an international traveller arrives into New Zealand, one has to fill out the passenger arrival card at immigration. In section 2b in terms of the length of stay, If the traveller ticks “Permanently” or input 12 months or longer, it will be recorded as “permanent and long-term arrival” with Stats NZ.

Based on historical numbers, permanent and long-term migrants have been growing at a staggering 11% annually since 2013.

If you’ve been reading net migration numbers rather than arrival numbers, then you’re underestimating the actual potential new customer numbers. In the 12 months to April 2017, a staggering 350 new Kiwis arrived every single day, based on more than 125,000 migrants who intend to stay in New Zealand for 12 months or more, with Auckland netting the bulk of the arrivals at 600 per week.

 

3. Migrant segment is profitable… And more so than many realised.

Sizing up the profitability of a market segment is never easy especially if data is limited. We know anecdotally that migrants are perceived to be wealthier than those born locally, but here are some numbers to quantify that.

Government data: MBIE published a BERL 2013 research outlining the net fiscal impact of migrants and showed a clear financial contribution of migrants compared to those who are born in New Zealand. In 2013, migrants’ net fiscal impact to the central government was $2.9 billion in total or $2,653 per head. In contrast, locally born Kiwis contributed $540 million in total or $172 per head. That means migrants’ net fiscal impact is 15 times of those who are locally born.

 

Social enterprise data: Cultural Connections has just published “Migrant Banking In New Zealand 2017”. The first ever research into migrant’s banking behaviour showed that migrants actually held 10% more products than those who are locally born, because migrants have investable wealth from day 1 of arrival into New Zealand.

Within the research sample size of more than 1,000 migrants, it also highlighted migrants from different regions chose their main bank quite differently as illustrated in the two charts below.

The left chart below shows why migrants overall chose a particular bank whilst the right chart shows why migrants from China chose a particular bank. Both charts tell a very different story and this is where data can make a difference in winning or losing in a market.

 

Conclusion

Migrants make up a good chunk of our population and for good reason. Natural birth rate is not enough to run the economy engine of New Zealand, hence the immigration gateway will continue to welcome new Kiwis.

Companies need to start looking at how to categorise migrants as a separate emerging growth segment to adapt to their specific needs. Companies who already have a migrant segment play need to finetune the current strategy and develop a more sophisticated framework to service different migrant groups.

After all, not all migrants are the same.

 

Eric Chuah is the founder of Cultural Connections, a multicultural research and consulting firm working with government, NGO’s, and private sectors. Eric specialises in consumer trends and insights to help clients develop business strategies, policies, and NPS. He is currently serving as Independent Advisor for Multicultural New Zealand; Board Trustee for Auckland Regional Migrant Services; and Ethnic Media Advisor for New Zealand Human Rights Commission.