- Out of total spending, $200b stems from direct earnings while $660b is influenced spending.
- Marketers must recognise and respond to the unique values and beliefs that characterise this generation.
With over 377 million individuals, Gen Z represents the largest generation in India’s history, commanding a remarkable $860 billion in collective spending, equating to about 43 per cent of the country’s total consumption.
This figure is projected to soar to $2 trillion by 2035, positioning Gen Z as a pivotal force in shaping economic growth, according to a report by Boston Consulting Group (BCG) in collaboration with Snap Inc.
Pulkit Trivedi, Managing Director, India at Snap Inc., articulates the significance of this demographic, asserting that they will play a crucial role in driving India’s consumption growth over the next two decades.
By 2025, Gen Z’s direct spending is expected to reach Rs250 billion, with one out of four members already participating in the workforce.
The demographic’s spending habits are characterised by a thorough research process—over 1.5 times more than that of Millennials—reflecting a robust and deliberate approach to purchasing.
The report highlights the diverse spending patterns of Gen Z, indicating that they account for substantial expenditure across various categories: 50 per cent on footwear, 48 per cent on dining, and 47 per cent on fashion and lifestyle.
Intriguingly, within their total spending power, approximately $200 billion stems from direct earnings, while $660 billion is influenced spending, demonstrating the significance of peer recommendations and social connections in their purchasing decisions.
Visual communication plays a crucial role in how Gen Z interacts with brands and shares experiences.
New opportunities
Nearly 80 per cent rely on images, GIFs, and immersive visuals to express their identities and connect with peers, underscoring the need for brands to engage with this generation through visually compelling marketing strategies.
Despite the evident opportunities for businesses, the report reveals a concerning trend: only 15 per cent of companies are actively capitalising on the insights provided.
However, 45 per cent have recognised the potential of this demographic and expressed interest in adapting their strategies accordingly.
As Nimisha Jain, Senior Partner and Managing Director at BCG India, emphasizes, Gen Z’s influence transcends multiple sectors, including fashion, dining, automobiles, and consumer durables.
To effectively engage with Gen Z, marketers must recognise and respond to the unique values and beliefs that characterize this generation. The disparity between the enormous spending potential of Gen Z and the limited response from brands illustrates a significant gap that requires urgent attention.
As the generation continues to mature, their impact on consumer trends will only intensify, presenting both challenges and opportunities for businesses willing to adapt to their distinct purchasing behaviours. Embracing these insights could pave the way for innovative marketing strategies that resonate with the aspirations of a generation poised to shape the economic landscape of India.