Monday 18 / November / 2024
New Delhi: Boston Consulting Group (BCG) and Snapchat's parent, Snap Inc., have brought out a report that deep dives into Gen Z's spending habits, and how they make purchase decisions.
The report titled, 'The USD 2 Trillion Opportunity: How Gen Z is Shaping the New India,' describes how this generation is shaping the trends.
With a population of over 377 million Gen Z is the largest generation ever to live in India and their collective spending is at USD 860 billion, which is about 43 per cent of the total consumption in the country. The report says the spending trends show that it will touch USD 2 trillion by 2035.
Commenting on the findings, Pulkit Trivedi, Managing Director, India, Snap Inc., said, "India is a young nation with a 377 million Gen Z population which will shape the future of India's growth in the next two decades. Gen Z will be the biggest contributor to India's consumption growth driving USD 1.8 Trillion worth of direct spend by the year 2035".
The report adds that by 2025, Gen Z's direct spending will amount to Rs 250 billion. One out of four Gen Z are already in the workforce now and by 2025 every second Gen Z will be earning.
Gen Z buying pattern reflects over 1.5 times more research than Millennials. This dynamic cohort is impacting significant spending across categories such as 50 per cent of total spending on footwear, 48 per cent on dining, 48 per cent on out-of-home entertainment, and 47 per cent on fashion and lifestyle.
Out of Gen Z's total spending power of USD 860 billion, approximately USD 200 billion comes from direct spending, money they earn and spend themselves, while USD 660 billion comes from influenced spending, which includes purchases influenced by their recommendations or preferences.
Nearly 80 per cent of Gen Z rely on images, GIFs, and immersive visuals to express themselves and connect with their circle. They share their shopping experiences with their inner circle via photos or video calls.
The report highlights that despite the opportunities, most businesses haven't capitalised on them. The report says only 15 per cent of businesses are actively leveraging these findings. However, 45 per cent of them have registered their potential and interest to spend.
Nimisha Jain, Senior Partner and Managing Director at BCG India says "Their influence is not limited to select categories - it cuts across categories ranging from fashion, eating out, to automobiles and consumer durables. It is important for marketers to take note that this generation is driven by unique values and beliefs and therefore have distinctive purchase behaviors, however we noticed that only 15 per cent of brands we spoke to are actively taking steps to tap into this opportunity."
