G R E A T E R P H I L A D E L P H I A R E G I O N

The State of Hispanic Business

2

Table of ContentsPresident’s Message . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

The Greater Philadelphia Region . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Hispanic Business in the Greater Philadelphia Region . . . . . . . . . . 7

Hispanic Business Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Challenges Faced by Hispanic Business Owners . . . . . . . . . . . . . 8

Statistical Analysis of Responses to Business Challenges . . . . . 8

Financial Literacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Other Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Hispanic Consumers in the Greater Philadelphia Region: Opportunities . . . . . . . . . . . . . . . . . 10

Purchasing Habits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Growth Industies for Hispanic Consumers . . . . . . . . . . . . . . . . . 12

Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Reaching the Hispanic Consumer . . . . . . . . . . . . . . . . . . . . . . . 15

Advertising in Spanish . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Marketing and Traditional Media . . . . . . . . . . . . . . . . . . . . 15

Word of Mouth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Social Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

3

President’s MessageI came to Philadelphia 32 years ago and remember that at that time being Hispanic was a novelty . As a student at Temple University who didn’t speak English and didn’t know the American culture, I quickly made friends with Philadelphians through my job teaching Spanish including international business lenders and executives . At the time, Hispanics represented 2% of Philadelphia’s population, and roughly 15 million residing nationally . I had to cook my own Latino food and ethnic groceries were scarce; the region didn’t offer a Latino restaurant outside El Barrio . The subsequent population boom of Hispanics would have been unimaginable to me back then with Latinos growing exponentially and now accounting for 13% of the city’s population, and over 50 million strong nationally . Today, Hispanic-owned businesses in our region are growing twice as fast as non-Hispanic-owned businesses and total nearly 19,000 .

Having personally experienced this transformation and as president of the region’s leading organization for Hispanic business, it was only natural that the Greater Philadelphia Hispanic Chamber of Commerce (GPHCC) commissioned a survey of business owners and professionals to produce a first of its kind “State of Hispanic Business” report in conjunction with Temple University’s Fox School of Business . This report is a snapshot of the status of Hispanic-owned businesses and the local Hispanic consumer market . We have gathered and assembled data to offer insights and analysis about Latino businesses and consumers and to provide leading economic indicators regarding the area’s Hispanic population . Long overdue, the objective of the report is to provide business and consumer insights about this increasingly influential market and further enable businesses and organizations to be better prepared to serve Latino businesses and consumers .

As demographics across America and the Greater Philadelphia region continue to evolve, the rise in the Hispanic population continues to make an indelible mark on the business landscape . Part of our mission at the GPHCC is to promote understanding about the economic power and potential of the region’s fastest growing market segment . The GPHCC staff and membership are passionate about the regional market and its culture, and our work is being done with our children and regional economy in mind . We share in the pride of the first capital of the world’s strongest economy; we embrace the rich history that housed our nation’s first congress and we capitalize on its location . Latinos enhance our markets and the region .

In 2015 the GPHCC will celebrate 25 years of serving the region’s Hispanic business community . I am proud to say that today our region offers excellent Latino restaurants, Latin American grocery stores, and one of the largest and most active Hispanic chambers in the country . This report marks the first regional research ever conducted about the Latino business community . Our goal is to stimulate the Greater Philadelphia region’s businesses, governments and stakeholders to enhance business and economic development initiatives aligned with Latino market needs and offerings . In putting the betterment of our region’s economic health at the forefront, we believe that this initial effort will better inform the reader of the value of Latino business and consumer markets . This report commands attention . It delivers an opportunity for the region’s business community and governments to enhance strategies and investments that help develop the fastest growing business and consumer market segment . Enjoy learning about the opportunities we offer!

Truly,

Varsovia Fernández President & CEO

4

Executive SummaryHispanic businesses are the fastest growing segment of the American economy with 3 .2 million enterprises contributing $486 billion to the economy each year .1 In the Greater Philadelphia region, the number of Hispanic-owned businesses has grown 28% to 18,787 in less than a decade .2 These businesses are located across the 11 counties served by the GPHCC . The characteristics of these firms are as diverse as the heritage of their owners: some purely local while some are international, some consumer-facing while others business-facing, some mature and others growing rapidly . What these businesses have in common is that they all provide jobs for the region and display a rich cultural heritage relevant to innovation and the region’s growth . This report, consisting of survey data gathered from Hispanic business owners and professionals from throughout the region, highlights the aforementioned diversity .

It is worth noting that the diversity of this market is unique to the Philadelphia region and thus presents a set of challenges and opportunities such as access to capital and financial literacy in the business community, as well as consumer market prospects for industries including real estate and mobile technology . In spite of the challenges presented in the current business climate, Hispanic-owned businesses are drivers of the regional economy, providing jobs and employment opportunities for thousands of local residents . As contributors to the business community, 58% of our survey respondents answered that their business directly serves consumers, and 41% answered that their businesses serve other businesses .3

While many of these businesses excel financially, many have also yet to reach their full potential . Like most business owners, Hispanic business owners who responded to the GPHCC survey ranked “Attracting New Customers” as their most significant challenge, however, they ranked “Access to Capital” as the second biggest challenge facing their business .4 By providing resources and education to these Hispanic-owned businesses, the GPHCC assists them with overcoming such challenges and reaching their potential .

Understanding the region’s Hispanic consumer market is essential for businesses to thrive, whether Hispanic-owned or non-Hispanic-owned . This report also presents important insights about Hispanic consumers in the region . For example, local Hispanic consumers are relatively young, with high technology adoption rates and social media usage compared to other market segments as well as national averages . Known to be extremely brand-loyal in purchasing decisions, connecting with this young and growing market through digital platforms is a clear business advantage that will have a long-lasting impact on the region’s economy .

GPHCC programs serve to empower the Hispanic business community and spur regional economic development by providing tools for growth . While Hispanic-owned businesses have developed rapidly over the past decade within the Greater Philadelphia region, there is still much room to grow . Unlocked potential in Latino retailers and global operations is waiting to be released, and the resources at the GPHCC will play a pivotal role in realizing that potential . However, the GPHCC acknowledges that in order to have a truly comprehensive understanding of the region’s Hispanic business and consumer markets, and fully realize their potential, further research is needed . This report, its findings and insights, will help drive that change to make Greater Philadelphia one of the strongest Hispanic business communities and consumer markets in the nation .

Los Taquitos de Puebla

5

The Greater Philadelphia RegionPopulationThe Greater Philadelphia Region (GPR), GPHCC’s service area, includes 11 counties: Bucks, Chester, Delaware, Montgomery, Philadelphia, Burlington, Camden, Gloucester, Mercer, Salem and New Castle; the 6th largest metropolitan area in the United States, with more than 6 million residents .5

NEWCASTLE

CHESTER

MONTGOMERY

BUCKS

BURLINGTON

MERCER

CAMDEN

PHILA

DELAWARE

SALEM

GLOUCESTER

Boston

Providence

NEW YORK

PA NJ

DE

The Hispanic population in the region grew at twice the rate of the non-Hispanic population from 2000-2009 .6

While the Hispanic population in Philadelphia’s Designated Market Area is roughly 800,000, the Hispanic population in the GPR is over 420,000 .7 The GPR is the second largest Hispanic market in the northeastern United States and grew 58 .3% from 2000 to 2010, compared to the majority population which increased 25 .2% .8

HISPANIC POPULATION GROWTH VS . TRADITIONAL MARKET FROM 2000-2010

0%

50%

100%

Hispanic Population GrowthTraditional Market

25.2% 58.3%

The general national population growth from 2010 to 2050 is forecasted to increase by 42% while Hispanic growth is forecasted to increase by 167% . Hispanics are creating a new baby boom in the United States . The Latino baby boom will affect every aspect of American life over the next 50 years .9

“It’s no secret that Hispanic

business will be increasingly

pivotal to the future of the

American economy . The economy

of tomorrow depends on a diverse

workforce, one that will harness the

recent strides that Hispanics have

made in obtaining higher education

and adopting technology at a rate

faster than their non-Hispanic

counterparts . The numbers are

clear — the contributions

Hispanics make and will continue

to make are not only important,

but they will be necessary when

considering the percentage of

people retiring daily from the

workforce or how they are

outpacing the country in starting

their own businesses .”

— Nina Vaca, Pinnacle Technical Resources, USHCC Chair Emeritus

6

DemographicsThe Greater Philadelphia region’s Hispanic market segment represents a unique set of valued attributes; high population growth rate, high technology adoption rate, youth, and with increasing affluence and influence, all residing within a thriving local economy .

The GPR’s Hispanic community represents 21 cultural heritages . The cultural composition of the Greater Philadelphia Region is unique to the area, offering varying market segments that have yet to be singularly realized .

Findings show that the GPR Hispanic population is predominately of Puerto Rican and Dominican descent .10

The average age of the GPR’s Hispanic population is 24 .3; almost twice as young as non-Hispanics in the region .11

IncomeThe average of the median annual Hispanic household income for the 11-county region is $63,010, with eight of the eleven counties showing a median annual income of $50,000 . Burlington County has the highest median income at $82,580, and Philadelphia has the lowest median income at $34,332 . It is worth noting that the comparatively low median income in Philadelphia County is not exclusive to Hispanics, but representative of the city for which the overall median income is $41,258 .

Approximately 51 .2% of Hispanic households in the region earn over $50,000 annually, and approximately 22 .2% of Hispanic households in the region earn over $100,000 annually .12

GREATER PHILADELPHIA MEDIAN HISPANIC HOUSEHOLD INCOME

$0

$20,000

$40,000

$60,000

$80,000

COUNTIES

INCO

ME

New Cas

tle

Salem

Mercer

Glouces

ter

Camde

n

Burling

ton

Phila

delph

ia

Montgo

mery

Delaware

Cheste

r

Bucks

Average

Figure 1: Median Hispanic household income of GPHCC area counties with average

Juniata Supermarket

7

Hispanic Business in the Greater Philadelphia RegionHispanic Business OverviewHispanic small businesses are growing at twice the rate of the national average – generating over $350B in annual revenues, with some estimates closer to $650B . Yet this powerful demographic continues to be often overlooked by mainstream leadership in business and government .13

2013 COUNT OF HISPANIC BUSINESSES IN GPHCC 11-COUNTY REGION

NEWCASTLE

1,050(5.4%)

DELAWARE PENNSYLVANIA NEW JERSEY

812(4.2%)

1,658(8.6%)

1,440(7.5%)

983(5.1%)

7,785(40.3%)

1,358(7.0%)

1,000(5.2%)

104(0.5%)

983(5.1%)

2,135(11.5%)

CHESTER

MONTGOMERY

BUCKS

PHILA

DELAWARE

MERCER

BURLINGTON

CAMDEN

SALEM

GLOUCESTER

TOP 10 INDUSTRIES IN GPHCC 11-COUNTY REGION

Industry 2007 Hispanic Business Count 2013 Hispanic Business Count

Other Services 2,553 3,268

Health Care and Social Assistance 2,396 3,067

Retail Trade 2,379 3,045

Construction 2,102 2,691

Admin ., Support, Waste Management, Remediation Services

2,000 2,560

Professional, Scientific and Technical Services 1,715 2,195

Accommodation and Food Services 772 988

Finance and Insurance 343 439

Manufacturing 214 274

Wholesale Trade 203 260

TOTAL 14,677 18,787

8

According to a GPHCC/Temple Fox survey, while a large plurality of the region’s Hispanic businesses are located in Philadelphia County, a growing share is also present in the surrounding suburban counties . The suburban counties in Pennsylvania (Bucks, Chester, Delaware, and Montgomery) combine to represent 25 .4% of all GPR Hispanic businesses .

According to our survey, the plurality of Hispanic businesses are in industries that do not require a college education, such as retail trade and construction, while a lower percentage are in industries such as professional services, finance and insurance . In 2013 Hispanic businesses comprised 12% of the total businesses within the top 10 industries identified for the GPHCC Region . The most represented of the industries among Hispanic businesses was Other Services (includes establishments that provide services such as auto repair, photography, dry cleaning, and personal care) with approximately 3,268 businesses, and the least represented was Wholesale Trade with approximately 260 businesses .

Small Hispanic businesses are in business for the long haul, with survey respondents reporting having been in business five or more years, higher than national business success rates . Research also confirms that small businesses are the cornerstone of the Hispanic business community . Locally, more than 30% of firms reported employing 5-100 people and 25% of reporting firms have 1-4 employees . Locally 17% are sole owner businesses, higher than the national self-employed average of 14% for Hispanics .

Challenges Faced by Hispanic Business OwnersIn a survey conducted by the GPHCC and Temple Fox, Hispanic business owners from the GPR expressed the primary concerns facing their businesses today . According to survey results the most significant concerns facing Hispanic business owners are “Attracting New Customers” and “Access to Capital .” While business owners of all backgrounds consider attracting new customers as their biggest concern, issues for Hispanic business owners regarding access to capital pose unique challenges .

Access to Capital Bank loans are an important source of financing for starting a new business or expanding an existing one . The World Economic Forum’s Global Competiveness Report shows that bank financing has become even more difficult to obtain after 2007 in all countries as a result of the financial crisis .

GPHCC and Temple Fox interviewed numerous key stakeholders, and all interviewees mentioned access to capital as one of the greatest challenges facing Hispanic business owners .

Statistical Analysis of Responses to Business Challenges Based on GPHCC/Temple Fox projections, in 2013 there were 18,787 Hispanic businesses within the top 10 industries identified for the GPHCC 11-County Region, approximately 28% more than those counted in 2007 .

GPHCC/Temple Fox projections suggest that the sales receipts of Hispanic businesses grew from $358 billion in 2007 to $456 billion in 2013 . Approximately 30% of Hispanic business owners earn more than $100,000, whereas only 20% of all U .S . households have annual income over $100,000 .

In the Greater Philadelphia region, Latino businesses earn approximately $600 million annually and employ over 18,000 .

“When I started Wash Cycle

Laundry, I thought that I could

do it with just the money in my

bank account . That ran out a lot

quicker than I expected . It wasn’t

until the GPHCC staff put me in

touch with CBAC, a microlender,

that I considered taking on outside

capital . I had been to events with

traditional banks organized by the

SBA, and was even told by some

loan officers not to bother applying

for loans . The microloan money

allowed us to grow to the point

where we were able to service our

first contract at a university,

which later allowed us to begin

servicing the federal government

and attract equity investors who

supported our vision . Today,

we have 47 employees in three

states, and continue to grow

here in Philadelphia and

across the country .”

— Gabriel Mandujano, Wash Cycle Laundry

9

Historically, the GPHCC has seen two contributing factors impacting access to capital for Hispanic businesses: the lack of financial literacy and business education as well as language barriers .

Financial LiteracyThe Hispanic community has different financial needs than non-Hispanics . Various financial service companies like banks, insurance companies, credit card companies, and mortgage lenders that offer products tailored to meet the financial needs of the Hispanic community have the opportunity to realize enhanced growth rates relative to those available in more developed segments .

The GPHCC/Temple Fox survey revealed a need for business education within the Hispanic community to support standard business practices and documentation of finances . The lack of understanding extends from a cultural divide about financial institutions that is both personal and professional . This factor is especially valid when the impact of those who are unbanked is reviewed through a business and consumer financial resource lens .

One of the primary challenges to financial literacy is that Hispanic business owners are one of the largest “unbanked” groups in the Philadelphia area, which aligns with national statistics . This is partially due to a lack of understanding and trust of the banking system .

This results in additional costs for unbanked Hispanic business owners, from higher lending costs to the inability to have a standard cellular phone plan or acquire capital .14

Hispanic families in the Greater Philadelphia region have substantial income and credit worthiness and desire to enhance their current state . These attributes provide business opportunities for corporations willing to accommodate the language and cultural distinctions of this new consumer .

Other Concerns GPR Hispanic business owners responding to the survey also identified the following as major concerns in growing their businesses:

• In creating new product innovation and technology, some specifically pointed out that the lack of financial resources makes technological adaptation and research and development difficult for small Hispanic-owned businesses

• Growing competition

• Access to professional and entrepreneurial training . Some pointed out that traditionally, the Hispanic community has had less opportunity for formal business education

• Government laws and business regulations

• Limited talent pool makes it harder to hire employees

• Language barriers and cultural norms . With 28% of Hispanic adults only speaking Spanish, many Hispanic business owners face difficulty in communicating with both Hispanic and non-Hispanic consumers .

The GPHCC works with Latino businesses to address these challenges by providing services that facilitate best business practices education and advocacy .

“The lack of financial statements makes it difficult for Hispanic business owners to get lending from banks .”

— Mario Zacharjasz, PZS Architects,

GPHCC Chairman

10

Hispanic Consumers in the Greater Philadelphia Region: OpportunitiesHispanics in the GPR have a total purchasing power of approximately $4 .2 billion .15

Hispanic households are much more likely to be considered savers as opposed to consumers .

According to a multicultural economic study conducted in 2012 by the Selig Center for Economic Growth, it is estimated that the Hispanic purchasing power nationally is $1 .2 trillion and will rise to $1 .7 trillion by 2017, and more than half of the Hispanic population prefers purchasing with cash .

Nationally, Hispanic buying power will grow at a faster rate than all minority groups including African American, Native American and Asian .16 Hispanics are the cornerstone of future brand growth and should be recognized as such by company executives and agencies .

HISPANIC HOUSEHOLD EXPENDITURES

Housing

Transportation

Food-Home

Food-Takeaway

Personal Insurance and Pensions

Other Expenditures

Healthcare

Entertainment

Cash ContributionsApparel and Services

33%

17%8%

5%

11%

7%

7%

5%4%

3%

Purchasing HabitsThe Hispanic community is extremely family-focused . This means that any financial advice and products for the Hispanic market need to address a larger sized family, often multi-generational .

Name brands and brand loyalty are important to Hispanics . For example, Hispanic purchases of name brand hair care products is 43% higher than the total market, 15% higher than the total market for branded baby products . Additionally, Hispanics are more likely to purchase grocery foods, dairy products, and bread from convenience stores than non-Hispanics, with Spanish-preferred Hispanic households more likely to make household grocery purchases from convenience stores than other Hispanics .17 Hispanics prefer to shop with cash or debit cards rather than with credit cards . The data in the following table collected in 2012 shows that more than 50% of the Hispanic population use cash regardless of the size of purchase, whether for furniture, electronics or clothing .

“Through financial literacy training and support from the Santander Bank Foundation, we are delighted to work with the Greater Philadelphia Hispanic Chamber of Commerce in its mission to drive change and progress in the Hispanic community . We know how important it is for business owners to have positive experiences with mainstream financial institutions that can serve their banking needs . When Hispanic business leaders trust banks to offer competitive and easy to use products and services, those leaders will encourage financial services in the entire Hispanic community . We commend GPHCC for this report that lays the foundation for understanding the significant role the Hispanic community plays in the business and consumer sectors .”

— James Wujcik, Business Banking Executive,

Santander

11

CASH V . CREDIT

Pay by Cash or Debit Card Hispanic Males Hispanic Females

Gas 52 .7% 60 .0%

Dine Out 66 .1% 72 .9%

Furniture 51 .7% 57 .7%

Electronics 56 .3% 62 .4%

Clothing and Accessories 59 .1% 66 .5%

Beauty Products 71 .2% 60 .5%

Source: Hispanic Insight Center™

The Bureau of Labor Statistics reported in 2012 that the average Hispanic household spends $51,422 annually, with higher numbers in suburban counties . Data indicates that these consumers have a significant amount of disposable income, and businesses can benefit by appealing to this rapidly growing demographic .

Hispanics tend to shop less often than other consumer segment populations, but spend more per trip . Over the course of a year, Hispanics spend over $386 more per household than majority groups, and Spanish-preferred Hispanic households use fewer coupons and buy products because of promotional prices less often than majority groups .18

DOLLARS PER TRIP

$0

$10

$20

$30

$40

$50

$60

Non-HispanicHispanic(English Preferred)

Hispanic(Spanish Preferred)

0

30

60

90

120

150

Non-HispanicHispanic(English Preferred)

Hispanic(Spanish Preferred)

Source: The Nielsen Company

SHOPPING TRIPS PER HOUSEHOLD

$0

$10

$20

$30

$40

$50

$60

Non-HispanicHispanic(English Preferred)

Hispanic(Spanish Preferred)

0

30

60

90

120

150

Non-HispanicHispanic(English Preferred)

Hispanic(Spanish Preferred)

Source: The Nielsen Company

“Hispanic shoppers are a unique opportunity in that they spend about 46% more on groceries than U .S . grocery shoppers in general . That acculturation level plays a large role in where Hispanics shop . They are looking for more retail-tainment as shopping often involves more family members and is more of an activity for this engaged shopper . They are also looking for the inviting cultural cues through product placement and staffing that signal which retailers can meet their shopping needs . Just as meaningful as specific products, brands are important to the Hispanic shopper and present another form of value through trusted quality that is rewarded with loyalty . We are at an exciting time where some of the Hispanic shopping behavior is starting to change and we see this in increased usage of traditional and emerging promotional tools such as traditional couponing and digital .”

— James Nevels, Chairman, The Hershey Company

12

Growth Industries for Hispanic ConsumersFinancial ServicesThe Hispanic market’s unbanked community has a tremendous impact on consumer spending . Hispanics over the age of 18 without bank accounts who have mobile phones, account for approximately 3 .7 million consumers . This estimate of the “unbanked” population excludes the millions of Hispanics who have some kind of banking relationship but continue to use alternative financial services, such as check cashers and money-transfer operators .

HISPANIC HOUSEHOLD BANKING STATUS: PHILADELPHIA-CAMDEN-WILMINGTON MSA

Fully Banked

Underbanked

Unbanked

Unknown

42%

4%

19%

35%

According to an FDIC report, as many as 35% of these same households are unbanked, and 18 .8% are under banked . This represents as many as 65,000 households underserved by the region’s banking institutions .19 As a result, Hispanics likely constitute at least one-third of the potential under banked mobile banking market .”20

Real EstateHispanic homeownership accounted for almost half of the national homeowner growth in the past decade .

Nationally, Hispanics achieved modest growth of 84,000 owner households in 2013, but accounted for an increase of 2 .6 million owner households or nearly 47% of all homeownership growth in the country between 2000 and 2013 . Hispanics are expected to comprise 50% of all new homebuyers by 2020 .21

Hispanics are more likely than the general population to prefer owning a home not only because it makes more financial sense but also for lifestyle reasons . They believe homeownership empowers future decisions, reduces stress and provides a good place to raise a family . With the average age of GPR Hispanics so young, we should see a continuing rise in Hispanic home ownership .

“I am thrilled my company has

established a solid Hispanic

market base . According to the

National Association of Real Estate

Professionals, the median age of

the Latino population is 28 years

old, nearly ten years younger than

the total market median age of

37 years . Given that the age for a

new homebuyer is between 26 and

46 years old, Latinos are poised

to become a force in residential

purchasing over the next ten years .

My company is leading the way .”

— Carlos Giraldo, Giraldo Real Estate Group

13

Sixty-one percent of all Hispanic households consist of a married couple with children younger than 18 and they are typically larger than the households of non-Hispanic Whites, 3 .3 persons per household versus 2 .4 persons . This suggests the need for larger homes affordable to middle income tiers .22

The affordable Philadelphia housing market presents an opportunity for developers, real estate agents, consumer retailers, and others who create accessible offerings tailored to the highly differentiated needs of Hispanics .

PERCENT CHANGES IN THE GROWTH OF OWNER HOUSEHOLDS IN THE U .S . FROM 2000 TO 2012

-2%

0%

2%

4%

6%

8%

10%

201220112010200920082007200620052004200320022001

Hispanic Non-HispanicAll

AVERAGE ANNUAL

INCREASE

3.9%

0.4%

Source: U .S . Census Bureau, Homeownership/Vacancy Data, January 2013

Home ownership is viewed as a symbol of success by 32% of all Americans

• But it is viewed as a symbol of success by 56% of Hispanics

57% of Americans view home ownership as a sound economic decision

• 68% of Hispanics agree

57% of all Americans view home ownership as a path to building wealth for the future

• 73% of Hispanics view home ownership in this manner

AutomotiveNationally, Hispanic auto purchasers also tend to return to the market sooner than non-Hispanics . Hispanic customers tend to purchase new cars every 35 months compared to 39 months for non-Hispanics . The increased amount that Hispanic households spend on transportation costs may correlate with their expansion into suburban areas .23 The Bureau of Labor Statistics speculates the 8 .5% increase in transportation spending was a result of increased gas prices, which would imply that Hispanic consumers own and use personal autos . These autos are more common in suburban regions, with data confirming that almost a third of Hispanics in one of the five Pennsylvanian counties served by the GPHCC live outside of Philadelphia .

The Hispanic consumer market is the key to the automotive industry’s future .

Fiesta Calle Nueve

14

TechnologyHispanics are early adopters of technology . Hispanics are 24% more likely than their non-Hispanics peers to be the first to buy a new smartphone and 6% more likely to be the first to purchase a tablet .24

AT&T and Verizon comprise nearly 70% of the subscription share nationwide .25

Hispanics outpace all ethnic groups in mobile data service consumption including music and picture downloads, and at a growing rate . Dependence on mobile devices for Internet connectivity could explain why Hispanics have an average bill 8% higher than the general market .26

HISPANIC TECHNOLOGY OWNERSHIP (BY PERCENTAGE)

0%

50%

100%

Computer Ownership Smartphone Ownership Cellphone Ownership

C O U N T I E S

New Cas

tle

Salem

Mercer

Glouces

ter

Camde

n

Burling

ton

Phila

delph

ia

Montgo

mery

Delaware

Cheste

r

Bucks

HispanicBusiness .com states that over 25% of Hispanics spend more than six hours per day on social media sites .27

Within the GPR, overall technological adoption and smartphone usage are both above the national averages and Hispanics are three times more likely to use mobile internet than home internet within ten of the eleven counties of the GPHCC’s territory . Over 90% of Hispanics own a cell phone and over 60% own a smartphone .28

Technology is a great equalizer when approaching the Hispanic consumer . Both general market and Hispanic firms can take advantage of the high technology use by Hispanic consumers . In particular, the use of social media can reach customers outside of a business’ local area . The GPHCC/Temple Fox survey shows that 41% of the respondents’ customer base stretched over 50 miles from their location, so utilizing social media would take advantage of the technological shift as well as target a larger customer base . This addresses the number one business challenge as decided by respondents of the survey: attracting new customers .

“Providing our entrepreneurs

with the tools they need to grow

and create jobs is a large part of

why Pennsylvania continues to

be a leader in innovation . Grants

awarded through the Discovered

in PA – Developed in PA program

are strategic investments in the

incredible growth of Hispanic

businesses and their high usage of

technology provide Pennsylvania an

opportunity to enhance innovative

job and business growth across this

new market .”

— Secretary C . Alan Walker, PA Department of Community and

Economic Development

0%

20%

40%

60%

80%

100%

Total US Hispanics

US Market

Hispanics in GPHCC Region

68% 34% 45%

SMARTPHONE OWNERSHIP

15

Reaching the Hispanic ConsumerAdvertising in Spanish The use of language is a key marketing strategy Hispanic businesses should use to target Hispanic and non-Hispanic consumers .

Nielsen estimates show that 56 percent of Hispanic adults speak primarily Spanish at home, compared to 40 percent who speak primarily English .

Marketing and Traditional Media Radio, television and newspaper are still very common if not more so in Hispanic households according to most GPHCC interviewees .

According to Nielsen, real-time TV viewing still ranks high with the Latino market . Hispanics are less likely to use a DVR player than the average household (31% of Hispanic households own a DVR player versus 41% of the general market) .

Increasing market share in the Hispanic community means building brand loyalty and engagement with the community in a way that reassures that their needs are being understood and addressed .

TIME SPENT WATCHING VIDEO

Non-Hispanic WhiteHispanic

Hispanic to Non-Hispanic White Index

Monthly Time Spentin Hours: Minutes

Watching Traditional TV 125:48 142:05 89

DVR Playback 8722:01 25:16

Watching Timeshifted TV 586:50 11:52

According to Lima Consulting, marketers who can effectively engage with Latinos will find their efforts to be highly rewarding given that Latinos spend as much if not more than mainstream households per transaction, are more likely to share experiences in both online and offline channels, and exhibit higher retention rates than non-Hispanics . Latinos are good for business because they often have higher lifetime customer values than the mainstream and can generally be acquired at lower costs for those brands who authentically engage on a cultural level .

Research shows that the Hispanic consumer is influenced by value-added impressions targeted to their specific needs .29 Demonstrating cultural relevancy is an integral factor in accessing the full potential of business opportunities within the GPR consumer and business markets .

“One of my earliest memories is

going to Sears to buy a washer

and dryer with my grandparents,

parents and brothers . To a five

year old, large purchases for my

family were indistinguishable from

a family reunion . Social commerce

and decision making is part of

our culture . Latinos are culturally

pre-disposed to use social media,

and the numbers indicate that we

over-index in our adoption of social

media, mobile and social commerce

and likelihood to follow a brand on

social media .”

— Paul Lima, Lima Consulting Group

16

Businesses should leverage a mix of media and technology options to appeal to the lifestyle, culture and language preferences of the Hispanic consumers . Marketers can capitalize on new technologies to reach the young and growing Hispanic market . There is also an opportunity for businesses to build websites and apps that appeal to both Spanish and English speakers, as well as use mobile advertising and ecommerce to drive online sales .

On average, 5% - 6% of advertising is allocated to the Hispanic community despite making up 17-20% of the total population .30 Young Hispanic families are creating a new baby boom in the U .S .

Word of MouthHispanic consumers value relationships, and thus word-of-mouth is one of the most effective methods of marketing .31 Using social media is similar to word-of-mouth, but much quicker .32 “A carefully constructed viral YouTube video can spread through a population at epidemic speeds, but face to face communications spread much more slowly .”33

Social MediaFacebook, Pinterest, Twitter and LinkedIn are some of the common methods used by businesses to advertise and are even more important within the Hispanic community .

According to PEW Research Center’s report on Hispanic trends:

68% of Hispanics internet users say they use social media sites like Facebook and Twitter; compared to 58% of all US internet users who say they use social networking sites .

HISPANIC INTERNET USAGE (BY PERCENTAGE)

0%

50%

100%

Social Networking Mobile Internet Usage Internet Usage

C O U N T I E S

New Cas

tle

Salem

Mercer

Glouces

ter

Camde

n

Burling

ton

Phila

delph

ia

Montgo

mery

Delaware

Cheste

r

Bucks

Hispanics are a

marketers dream:

digitally savvy,

young and socially

connected .

17

According to Nielsen:

• Hispanic usage rates of television, smart phones, social networking, online video and other forms of entertainment, makes Hispanics one of today’s most engaged and dynamic targets .

• Hispanics are three times more likely to have Internet access via a mobile device than have Internet at home (9% vs 3%, respectively) .34

• Overall, Hispanics are 28% more likely to own a smartphone than non-Hispanics .35

• Hispanics spend 68% more time watching videos on the Internet and 20% more time watching videos on their mobile phones compared to non-Hispanic Whites .36

ConclusionThis report illustrates the tremendous impact Hispanic business as a whole is having on the nation and the Greater Philadelphia region . As the fastest growing population, it would benefit business and consumer advocates alike to support inclusion within the various systems, such as real estate and banking for the Hispanic community . GPHCC sees the need to expand upon this report and work with our partners to find the critical pathways for the Hispanic community to be appreciated and developed via traditional measures as an economic driver for the region and nation . In the meantime, we will work to support the following 2014 report conclusions:

1 . A need to further explore characteristics and dynamics of the Latino business and consumer market in the Greater Philadelphia region exists . As the 16th largest Hispanic DMA in the nation and the second largest Hispanic region in the Northeast, the GPR Hispanic market offers a unique perspective of the diversity challenge presented in a smaller environment served by one of the largest and most active Hispanic chambers in the nation .

2 . The Greater Philadelphia region has an opportunity to further educate Latino business owners and entrepreneurs regarding best practices, in efforts to accelerate their integration and help them grow to scale into mainstream markets . Educating Latino business owners ensures that children grow trusting our business systems and embrace family business growth .

3 . Report presents an opportunity to change the perception of the Latino population economics . At $63,010 annual income, we have an opportunity to better develop effective strategies for Latino purchasing power that fuel and contribute to the region .

4 . Latino businesses and consumers offer unique marketing innovation opportunities in that their use of social media and wireless technology is higher than the other minority markets . This presents an opportunity to further explore how we may reach this market most effectively using these tools . Hispanics have high social media use and are eager to participate in social commerce and mobile commerce .

The results of this report illustrate the need to further research the state of Hispanic business in the Greater Philadelphia region . Whereas most important and meaningful information has been collected, a deeper set of questions must be asked for the general market to fully comprehend the continued emerging and fast-growing Latino business and consumer markets .

El Centro de Oro Puerto Rican commercial district

18

References/Appendix1 . “History .” United States Hispanic Chamber of Commerce . N .p ., n .d . Web .2 . GPHCC/Temple Fox School of Business Research3 . GPHCC/Temple Fox School of Business Research4 . Ibid .5 . World Population Review (2014) . Philadelphia Population 2014 .

Retrieved Aug . 5, 2014 from http://worldpopulationreview .com/us-cities/philadelphia-population/

6 . Gonzales Group (2010) . A Case Study of the Philadelphia, Pennsylvania Multicultural Market . The Pennsylvania Association of Realtors . Retrieved Aug . 5, 2014 from http://www .parealtor .org/a-case-study-of-the-philadelphia-pennyslvania-multicultural-market/

7 . Nielsen Audio Philadelphia8 . Ibid .9 . http://www .nielsen .com/us/en/insights/news/2012/young-mobile-and-

growing-the-state-of-us-hispanic-consumers .html10 . GPHCC/Temple Fox School of Business Research, and US Census Bureau

(2014) . Distribution of Hispanic or Latino Population by Specific Origin: 2010 . Retrieved Aug . 5, 2014 from https://www .census .gov/dataviz/visualizations/072/

11 . GPHCC/Temple Fox School of Business Research12 . Llopis, Glenn (3/2012) . “Unlocking the Hispanic Super-

Consumer Opportunity,” Center for Hispanic Leadership at www .CenterforHispanicLeadership .com

13 . Llopis, Glenn . “America’s Corporations Can No Longer Ignore Hispanic Marketing Like Mitt Romney Did .” Forbes . Forbes Magazine, 12 Nov . 2012 . Web . 05 Aug . 2014 . <http://www .forbes .com/sites/glennllopis/2012/11/12/americas-corporations-can-no-longer-ignore-hispanic-marketing-like-mitt-romney-did/> .

14 . Fallon . Unbanked: Banking America’s Undocumented immigrants . February 2007 . Accessed August 2, 2014

15 . GPHCC/Temple Fox School of Business Research16 . Longo, D . (2013) . A 360-Degree View of the U .S . Hispanic Consumer .

Retrieved on July 27, 2014 from http://www .hispanicretail360 .com/article-a_360°_view_of_the_u .s ._hispanic_consumer-5993 .html .

17 . NPD Group (2014) . 2013 C-Store Hispanic Shopper . Retrieved on August 4, 2014 from https://www .npd .com/wps/portal/npd/us/news/press-releases/us-hispanics-more-likely-to-purchase-roceries-at-c-stores-than-non-hispanics-reports npd/!ut/p/a1/04_Sj9CPykssy0xPLMnMz0vMAfGjzOINLSwcPdwtDLzcfVwcDTzD_EwDPJxCjE0sTIEKIoEKTIJDAkw9LY0N3N29nA08jUIMHUOCgw0t3MyJ02-AAzgaENJfkBsaCgBpdJRL/dl5/d5/L2dBISEvZ0FBIS9nQSEh/ .

18 . Longo, D . (2013) . A 360-Degree View of the U .S . Hispanic Consumer . Retrieved on July 27, 2014 from http://www .hispanicretail360 .com/article-a_360°_view_of_the_u .s ._hispanic_consumer-5993 .html

19 . FDIC 2011 National Survey of Unbanked and Underbanked Households (9/2012), page 212, available at FDIC .com

20 . Prior, Francesc . (2010) . Banking the unbanked using prepaid platforms and mobile telephones in the United States . Retrieved August 1, 2014 from http://www .iese .edu/research/pdfs/di-0839-e .pdf

21 . NAHREP (2014) . Gain in Owner Households, Jobs, Income & Education Make Latinos Homeownership-Ready and Poised to Drive First-Time Homebuyer Sales if Homes were Available . National Association of Hispanic Real Estate Professionals . Retrieved Aug .5, 2014from http://nahrep .org/press

22 . National Association of Hispanic Real Estate Professionals (NAHREP), State of Hispanic Homeownership Report (2013) .

23 . A Profile of Public Transportation Demographics and Travel Characteristics Reported in On-Board Surveys . American Public Transportation Association . (May 2007)

24 . Ruiz, Roberto . “Hispanics Are the Most Digitally Savvy Group A Marketer’s Dream .” AdWeek . 17 May 2012 . Web . 30 July 2014

25 . Sharma, Chetan . “US Mobile Market Update - Q1 2014 .” CHETAN SHARMA: Technology & Strategy Consulting . N .p ., n .d . Web . <http%253A%252F%252Fwww .chetansharma .com%252Fusmarketupdateq12014 .htm>

26 . Ibid .27 . Villaneda, Rebecca . “Hispanics Use Social Media More Frequently Than

Other Ethnic Groups .” HispanicBusiness .com . 2 March 2012 . Web . 20 July 2014 .

28 . Nielsen Company (2012) . State of the Hispanic Consumer: The Hispanic Market Imperative . Retrieved on July 26, 2014 from http://www .nielsen .com/us/en/insights/reports/2012/state-of-the-hispanic-consumer-the-hispanic-market-imperative .html .

29 . Llopis, Glenn (3/2012) . “Unlocking the Hispanic Super-Consumer Opportunity,” Center for Hispanic Leadership at www .CenterforHispanicLeadership .com

30 . Cartagena, C . (2013) . Hispanics are Creating a New Baby Boom in the United States . CNN . Retrieved Aug . 5, 2014 from http://www .cnn .com/2013/10/14/opinion/cartagena-latino-boom/

31 . GPHCC/Temple Fox School of Business Research32 . Villaneda, Rebecca . “Hispanics Use Social Media More Frequently Than

Other Ethnic Groups .” HispanicBusiness .com . 2 March 2012 . Web . 20 July 2014 .

33 . “Word of mouth, social media and viral advertising .” Marketing Made Simple . Web . 23 July 2014 .

34 . Nielsen Company (2012) . State of the Hispanic Consumer: The Hispanic Market Imperative . Retrieved on July 26, 2014 from http://www .nielsen .com/us/en/insights/reports/2012/state-of-the-hispanic-consumer-the-hispanic-market-imperative .html

35 . Ibid .36 . Ibid .37 . The Nielsen Company . “Local Television Market Universe Estimates:

Hispanic or Latino TV Homes .” Nielsen 2014-2015 DMA Ranks (n .d .): n . pag . 27 Sept . 2014 . Web . <http://www .tvb .org/media/file/Nielsen_2014-2015_DMA_RANKS_Hispanic .pdf> .

Photo CreditsFRONT COVER: Top left, photo by D . Cruz for Visit Philadelphia®; Second row, center and far right, photo by David Martinez

PAGE 4: Photo by David Martinez

PAGE 6: Photo by David Martinez

PAGE 17: Photo by David Martinez

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Thank You to Our SupportersThe Greater Philadelphia Hispanic Chamber of Commerce acknowledges the following companies for their partnership and contributions to this “The State of Hispanic Business” report .

A special thanks for their work and dedication to GPHCC Business Council members James E . Nevels and James K . Wujcik, the MBA and undergraduate students of Temple University’s Fox School of Business, GPHCC Staff, and the GPHCC Membership; the engine that drives Hispanic business in the Greater Philadelphia region .

GPHCC Board of Directors

Executive CommitteeMario Zacharjasz Chairman PZS Architects

Anthony Rosado Vice Chairman Wells Fargo

A . Michael Muñoz Treasurer Revenue Collection Bureau

Luis Liceaga Secretary Impact Dimensions, LLC

MembersMiguel Amador Ritmo Wireless

Juan Dominguez Comcast

Louis A . Rodriguez Rodriguez Consulting, LLC

Raymond Yabor Havana Holdings

Daniel Betancourt Community First Fund

Claudia Dulac Bank of America

Claudia P . Roemer Wells Fargo Advisors

Varsovia Fernandez President & CEO GPHCC

Ramiro Carbonell, Esq . Stevens and Lee

Paul Lima Lima Consulting Group

Kenneth Seda CIGNA Foundation

Gregory DeShields Philadelphia Multicultural Affairs Congress

Mercy Mosquera Tierra Colombiana/Mixto

James K . Wujcik Santander

Greater Philadelphia Hispanic Chamber of Commerce200 South Broad StreetSuite 700Philadelphia, PA 19102(215) 790-3723www .philahispanicchamber .org