Diversity in a Virtual World

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Ethnicity plays a minor role in determining who's online and who's not, according to a recent study by Forrester Research in Cambridge, Massachusetts. Income, education, and the degree of comfort with technology have more impact on Net adoption. "Ethnicity shouldn't be the focus of marketing online," says Ekaterina Walsh, an analyst at Forrester. "Companies can be more successful by targeting people by their hobbies or what's relevant to them at that moment."

Still, when it comes to online access, there are some differences among ethnic households. Roughly 40 percent of Asian Americans online have been surfing for three years or more, compared to 30 percent of white households and 23 percent among blacks. More than one-third of wired African Americans are Internet newbies, and click on the Web primarily from school, public libraries and the office. Perhaps because they went digital early on, Asian Ameri cans are much more comfortable conducting financial transactions than other racial groups. That fact hasn't been lost on the financial services industry. Last year, Charles Schwab & Co., the leading discount brokerage firm online, launched a Chinese-language site. The site was a natural progression after Schwab saw rapid growth in its Chinese-American customer base when it started Mandarin and Cantonese touch-tone trading services in 1994. Asians are valuable customers as well: according to Schwab, the average balance among Asian investors is 10 percent to 20 percent higher than a typical client and they trade twice as often. Schwab's move has prompted other brokerage companies to follow: Firstrade Securities and Wyse Securities added Chinese-language sites this year. What might pop up next on the server? Front-runner Schwab is already considering a Spanish site for Hispanic American investors.

For more information about the study, contact Forrester Research at (617) 497-7090.

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