New Delhi: The Boston Consulting Group (BCG) in collaboration with Snapchat's parent company, Snap Inc., has released a comprehensive report that delves into the spending habits and purchasing decision-making processes of Generation Z.
Title: 'The USD 2 Trillion Opportunity: How Gen Z is Shaping the New India'
This report elucidates the manner in which Generation Z is influencing trends and shaping the economic landscape of India.
Generation Z, with a population exceeding 377 million, stands as the largest generation to inhabit India. Their collective spending power reaches USD 860 billion, constituting approximately 43 percent of the nation's total consumption. The report posits that this spending trend is poised to surpass USD 2 trillion by the year 2035.
In an interview, Pulkit Trivedi, Managing Director of India at Snap Inc., remarked, "India is a nation characterized by its youth, with a population of 377 million Gen Z individuals who are poised to significantly contribute to the country's growth over the next two decades. Gen Z is expected to drive India's consumption growth, contributing USD 1.8 trillion in direct spending by 2035."
The report further indicates that by the year 2025, Generation Z's direct spending is projected to reach approximately Rs 250 billion. Currently, one in four members of Generation Z are employed, and it is anticipated that by 2025, every second individual from this generation will be contributing to their earnings.
The buying behavior of Generation Z is marked by over 1.5 times more research compared to their Millennial counterparts. This cohort is exerting a significant influence across various sectors, including footwear (50 percent of total spending), dining (48 percent), out-of-home entertainment (48 percent), and fashion and lifestyle (47 percent).
Out of the total spending power of Generation Z, around USD 200 billion is attributed to direct spending, which is money they earn and spend independently. The remaining USD 660 billion is attributed to influenced spending, which encompasses purchases influenced by their recommendations or preferences.
The report also notes that approximately 80 percent of Generation Z rely heavily on images, GIFs, and immersive visuals to express themselves and connect with their social circles. They frequently share their shopping experiences with their close friends and family through photos or video calls.
Despite the vast opportunities presented, the report highlights that the majority of businesses have not fully capitalized on these trends. It is estimated that only 15 percent of businesses are actively leveraging these insights. However, 45 percent have recognized the potential and expressed an interest in spending.
Nimisha Jain, Senior Partner and Managing Director at BCG India, stated, "Their influence extends across a wide spectrum of categories, from fashion and dining to automobiles and consumer durables. It is crucial for marketers to acknowledge that this generation is guided by unique values and beliefs, which in turn shape their distinct purchasing behaviors. However, our research indicates that only 15 percent of the brands we have engaged with are proactively addressing this opportunity."
