Last month Nielsen released its report Resilient, Receptive and Relevant highlighting the spending habits of African-Americans in the United States. The document, filled with usable data does not adequately address the opportunities for Black entrepreneurs.
Atlanta Black Star has extracted the five industries we believe Black entrepreneurs should dominate. There are already positive signs in each industry, but the opportunities remain plentiful.
Beauty and Personal Care
Essence’s 2009 Smart Beauty research study found that African-American women spend $7.5 billion annually on beauty products and spent 80 percent more on cosmetics and skin-care products than the general market. According to celebrity makeup artist Sam Fine, Black women are spending more at the counter because “there’s little satisfaction. She keeps buying with the hope that this product will do what it’s supposed to do.”
Good news: Brands like Iman Cosmetics are generating over $25 million a year in revenue.
In addition, Black women have decreased millions of dollars spent on relaxers and weaves as they transition to natural hair care.
According to a 2009 study by Mintel, an international market research firm, big brands like L’Oreal USA and Alberto Culver Company, which account for more than one-third of the market, have both experienced sales declines in recent years thanks to the emerging black-owned natural hair market.
Earlier this year, Michael O’Neil, vice president of sales at Ultra Distributors revealed that the combined annual revenue of major natural hair brands Mixed Chicks, Curls, Kinky-Curly, Miss Jessie’s, Shea Moisture and Jane Carter Solution has soared from less than $10 million in 2009 to about $150 million.
Sources: www.wwd.com, www.businessweek.com
African-Americans watch more television than any other group at seven hours and 17 minutes per day compared to five hours and 18 minutes of viewing for total market, according to a 2013 report by Nielsen. A 2011 report by the Kaiser Family Foundation found that Black kids consume 4 1/2 more hours of media every day than their white counterparts.
With very little programming featuring Black child actors and cartoons with Black superheroes, the adults aren’t faring much better. Gone are the days of ABC’s My Wife and Kids, Fox’s The Bernie Mac Show, and the CW’s Everybody Hates Chris. The number of scripted, live-action shows on broadcast television (CBS, NBC, ABC, FOX ) with an all- or majority-Black cast is zero.
Good news: Writer and producer Shonda Rhimes is reigniting the conversation around a Black lead on a prime time show, in addition to Black writers and producers guiding a multiracial cast on broadcast television.
BET, the most watched network among African-Americans according to Nielsen, has ramped up its offering of scripted shows as well.
Source: www.nielsen.com, www.bet.com
Technology Innovation, Digital
African-Americans continue to be resilient in their role as early adopters of technology, as 14 percent are more likely to spend time on Telecom/Internet service sites.
The 2013 Nielsen report found that 71 percent of Blacks own smart phones, compared to 62 percent of the total population. African-Americans are 44 percent more likely than total market consumers to create a social media profile and spend 37 percent of their smart-phone time on social networking sites, namely Facebook.
African-Americans continue to adopt new shopping technologies at a faster rate than Caucasians, with 18 percent using their mobile devices to make purchases as compared to 10 percent of Caucasians.
Black entrepreneurs are facing major roadblocks in their attempt to elevate beyond a consumer. Only about 1 percent of entrepreneurs who received venture capital in the first half of last year are Black, according to a study by research firm CB Insights.
Sources: www.nielsen.com, www.cnn.com
Black travel and tourism is a $40 billion industry – a big business made bigger because African-Americans tend to travel in groups and use a variety of online resources to help them with travel planning. Despite the hefty number, according to Michael Bennett of Black Meetings & Tourism, Blacks are not capitalizing on their own spending power.
In 2012 he stated:
*Of the well over 600 Convention and Visitors Bureaus (CVB) across the country: Less than 10 have an African-American as a president/CEO.
*Over the past 20 years, we’ve had fewer than 25 CVB presidents/CEOs combined.
*Black hotel ownership stands at 500, though most are owned by business magnate Robert Johnson’s RLJ Companies.
*By contrast, Asian American Hotel Owners Association owns upward of 40 percent of all hotels in the United States.
*We don’t control the marketing and advertising dollars. Most destinations hire large Madison Avenue firms who do not employ African-Americans in managerial or creative positions.
Sources: www.nielsen.com, www.blackmeetingsandtourism.com
Read more: http://atlantablackstar.com/2013/10/15/5-industries-black-people-should-dominate-based-on-our-consumption/