New Delhi: Millennials, the population group between 18 and 35 years of age, are all set to take the centre stage in consumer markets and redefine India’s consumption story with their increasing number in the working age population, said a report released by consulting firm Deloitte India and lobby group Retailers Association of India.
According to the report, titled “Trend-setting millennials: Redefining the consumer story”, millennials, also known as Generation Y, are the chief wage earners in India with a 47% share in the working age population. Being the largest demographic group in India and globally, millennials are characterized by high levels of disposable income and as digitally connected individuals, driving various consumer segments towards rapid growth and development.
“Globally, India is leading in terms of millennial population. Generation Y (millennials) is accounting for nearly half of the working age population in India. There is Gen Z, born after 2000s, which has a completely different set of tastes and preferences but it is still the Gen Y which is driving and dominating the entire consumer market,” said Anil Talreja, partner at Deloitte India.
Globally, millennials account for 27% of the world’s 7.4 billion population, according to the report. In India, millennials are 34% (at 440 million) of the country’s total population.
While most of the monthly income of the millennials is spent on essentials, followed by education and utilities, the incremental income is primarily spent on entertainment and eating out (32.7%), apparel and accessories (21.4%) and electronics (11.2%).
In departure from the previous generations, savings account for only 10% of both overall and incremental income of the millennials, thus providing a consumption boost. “This indicates a shift towards consumption economy rather than a savings economy which was a predominant feature of the preceding demographic cohort (Gen X – born between mid-1960s to the early-1980s),” the report added.
Contrary to the popular belief that millennials are completely engaged in online retail channels, the report highlights that millennials primarily prefer offline retail modes and are gradually shifting towards the online mode, given the convenience and wider options on online channels.
By spending around 17 hours a week on the internet, millennials are gradually driving the market towards an omni-channel approach, the report said.
“It is true that millennials use digital methods to research a product before taking the decision to buy. However, shopping decisions are not necessarily purely based on channel. They are based on availability and convenience—any channel that offers them the right kind of convenience and fulfils other criteria such as touch, feel and service level would help the millennials in making the buying decision,” said Kumar Rajagopalan, chief executive at Retailers Association of India, in a statement.
Gender wise, the men among millennials are more likely to make all their purchases online (40%). Additionally, millennials are increasingly becoming more health conscious and prefer personalized product and service categories.
Going forward, consumer goods companies will have to adopt alternate approaches to tap into this emerging population group. As per the report, the companies will have to adopt an omni-channel strategy, make marketing and communications more personalized and proactively focus on social media with product launches and live engagement campaigns.
Narinder Singh Dhingra, chairman and managing director at Numero Uno Clothing Ltd, agreed. “Changes are bound to happen among retailers. We are starting to extensively focus on social media marketing to make a personal communication with the consumers. People prefer online channels to make a purchase because of convenience and discounted prices. That being said, there are certain categories (where touch and feel of the product is important) which will probably not make a good online purchase,” he said.livemint