The Boston Consulting Group (BCG) and Snapchat’s parent company, Snap Inc., recently released a report focusing on Generation Z’s spending habits in India. The report, titled ‘The USD 2 Trillion Opportunity: How Gen Z is Shaping the New India,’ sheds light on how this generation is influencing trends in the country. With a population of over 377 million, Gen Z is the largest generation in India and currently accounts for about 43 per cent of total consumption, totaling USD 860 billion. The report predicts that this number will reach USD 2 trillion by 2035.
Pulkit Trivedi, Managing Director of Snap Inc., commented on the findings, stating that India’s 377 million Gen Z population will play a pivotal role in shaping the country’s growth in the coming decades. By 2035, Gen Z is expected to drive USD 1.8 trillion in direct spending, making them the biggest contributors to India’s consumption growth. The report also projects that by 2025, Gen Z’s direct spending will reach Rs 250 billion, with one in four Gen Z individuals already in the workforce.
Gen Z’s purchasing behavior is characterized by thorough research, with this generation conducting over 1.5 times more research than Millennials. They are significantly impacting spending in various categories, including 50 per cent 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, while USD 660 billion comes from influenced spending, influenced by their recommendations or preferences.
The report also highlights Gen Z’s reliance on images, GIFs, and immersive visuals to express themselves and connect with their peers. Nearly 80 per cent of Gen Z individuals share their shopping experiences with their inner circle through photos or video calls, showcasing the importance of visual communication in engaging with this generation. Despite the vast opportunities presented by Gen Z’s spending power, the report reveals that only 15 per cent of businesses are actively leveraging these findings. However, 45 per cent have acknowledged the potential and expressed interest in tapping into this market.
Nimisha Jain, Senior Partner and Managing Director at BCG India, emphasizes that Gen Z’s influence spans across various categories ranging from fashion, dining, to automobiles and consumer durables. She points out that this generation is driven by unique values and beliefs, leading to distinctive purchase behaviors. However, only 15 per cent of brands surveyed are actively taking steps to capitalize on this opportunity. Marketers need to recognize the significance of Gen Z’s influence and tailor their strategies to effectively engage with this dynamic cohort.
