India, or Bharat, stands as one of the world’s most youthful nations, with a significant portion of its population under the age of 40.
This growing demographic diversity is rapidly transforming the consumer market, with younger generations leading a shift in spending patterns and lifestyle choices.
A report titled “The Bharatiya Consumer” by Dentsu and PhonePe delves into the distinct shopping behaviours across generations, revealing fascinating insights into how these age groups are shaping India’s economy.
As India’s working-age population grows, demand for products and services has surged. The millennial and Gen Z cohorts, in particular, are influencing market dynamics, creating a highly tech-savvy and trend-driven environment.
Their preferences for experiences, convenience, and personalized offerings are pushing brands to adapt to these new expectations.
Meanwhile, Gen X, which values reliability and long-term investments, is concentrating on categories such as healthcare and financial services.
The report dives deep into the evolving personas of Indian shoppers, exploring how each generation’s values influence their purchasing choices.
Tech-savvy Gen Z: the experience-driven shoppers
The younger generations, particularly Gen Z (aged 12-27), are leading the charge in transforming the Indian consumer market.
Known for their tech-savvy approach, they are gravitating toward experience, personalization, and convenience. With a transaction frequency 110% above the overall average, Gen Z spends predominantly in sectors like food, beverages, retail, and hospitality, underscoring their preference for indulgence and frequent experiences.
Interestingly, the report highlights that males in this generation have 22% higher transaction frequency than females, with the gap widening in top metros.
Despite their higher transaction frequency, Gen Z’s spending value drops significantly as town class level decreases.
While they transact more frequently offline (52% more often), their online spending habit is 45% higher, reflecting the increasing digitalization of their purchasing habits.
Females in this group show a higher frequency of offline transactions than males, but online shopping remains a dominant choice in smaller metros.
Gen Y: the balance of value and diversification
Gen Y (aged 28-43) represents the most diverse spending group, balancing frequent shopping habits with higher-value transactions.
This group is particularly prominent in sectors like retail, financial services, and commuting. Both males and females in Gen Y exhibit distinct spending patterns, with males transacting more frequently (27% higher) and spending more (10%) than females. This gap grows in metros, with females leading in both frequency and spending value.
One key characteristic of Gen Y is their consistent spending across town classes, with no significant decline in transaction value in smaller towns.
Additionally, this generation is increasingly investing in premium smartphone devices, signalling their integration of technology into daily life.
Interestingly, they spend significantly more online (52%) despite higher offline transaction frequency.
Gen X: traditional yet evolving
Gen X (aged 44-60) displays a more focused and traditional approach to spending, investing heavily in high-value categories such as healthcare, financial services, and agriculture.
With a smaller proportion owning premium smartphones (6%), this generation’s purchasing power is predominantly influenced by practicality and long-term value. While they transact more frequently offline, Gen X spends a significant portion of their budget online, with a 56% higher spending rate on digital platforms.
As with the other generations, the spending behaviour of Gen X increases as town class level decreases, with spending rising in smaller metros and non-metros.
Interestingly, males in this cohort transact 17% more frequently than females, with the gap widening to 26% in top metros.
The report also notes that while males lead in transaction frequency, females show slightly higher spending values, particularly in smaller and non-metro towns.
The multi-generational landscape
This multi-generational shift is reshaping India’s economic landscape, blending the country’s rich traditions with modern consumption trends.
While younger generations are driving the demand for experiences, personalization, and convenience, older consumers are focusing more on reliability and value.
The report paints a picture of a rapidly changing market where each generation’s preferences and priorities are crucial in understanding the larger consumer behaviour patterns in India.
The findings emphasize that the diverse spending habits of these generations, coupled with regional variations, are instrumental in shaping the future of India’s consumer economy.
As India continues to blend tradition with modernity, businesses will need to adapt their strategies to cater to the varied needs of Gen Z, Gen Y, and Gen X consumers across different regions.