India’s growth narrative revolves around consumption, buoyed by its billion-plus population and a young demographic inclined towards spending. Notably, India is set to emerge as the world’s third-largest consumer market, trailing only the US and China. According to Fitch Solutions, consumer spending is projected to soar by 7.1% year-on-year from 2023. According to the World Economic Forum, consumer spending is expected to surge from the current $1.5 trillion to nearly $6 trillion by 2030, marking a substantial surge in economic activity.
As an economy goes more towards consumption, the consumer wallet holds more and more importance vis a vis other factors like government policies, inflation, etc. While the old adage “follow the money” may have a different context, it holds tremendous importance when building a business. If building a business, there is no better way to ensure survival than to understand and serve the influencing customers of tomorrow: the Gen Z.
This generation, born between 1997 to 2012, entering the workforce is becoming the dominant consumer group and influence in a manner unparalleled by any previous generation. With an estimated 116 million Gen Z consumers in India forms 52% of population as of 2021; higher than global average of 47%. Gen Z consumers currently aged between 12 and 27 years, are about to become the major center of spending and attraction for marketers.
Let us understand the driving force for consumption behind this Generation.
Influencers and Influencing
Gen Z in India presents a compelling avenue for brands to excel in digital engagement. With 64% of them trusting information from social media and the Internet, and 63% preferring online shopping, this generation heavily relies on online reviews and recommendations. Reviews on platforms like Facebook, Instagram, and dedicated review sites wield significant influence. Brands with strong online presence and engaging social media campaigns are winning their hearts. Influencers, with their established credibility in specific niches, hold considerable sway over Gen Z’s purchasing decisions. By leveraging their omnichannel presence, brands can engage directly with their audience, by providing personalized interactions, such as engaging through comments, hosting live sessions, and conducting polls, thereby shaping their purchasing decisions.
Unique Style
Gen Z emphasizes individuality and is willing to pay a premium for products or services that reflect their unique style. A brand that talks to this group on the things that they value, is sure to make a mark. Gen Z are more likely to influence other buyers in same or other age groups through social media updates to show products matching their style.
Capable to Change Trends
Gen Z are social media wizards, they effortlessly navigate platforms and consume content. Their tech-savviness extends beyond entertainment; they’re resourceful online detectives, meticulously researching to find the best deals and leveraging online resources to their advantage. Also, to find the best value for money they can relentlessly research, making a strong online presence and competitive pricing crucial for brands.
Gen Z are resourceful, persistent, and can influence online trends before committing to a brand.
Aware and Concerned about mother Earth
A Gen Zer’s priorities are transforming. Shaped by recent global events (pandemic, climate change, etc.), Gen-Z Indian consumers are increasingly concerned about climate change, global conflicts, misinformation, health, inflation, polarization, and rights and freedom. As per research by the Indian Retailer Bureau, about 89% of Gen Z strongly focus on environmental friendliness, 84% on diversity in advertising, and 82% on employee demographics. They now look for trust and transparency from brands. Trustworthiness now rivals traditional factors like customer service, value, ethics, and quality in importance.
Gen Z isn’t afraid to voice their opinions online, actively promoting brands they love and holding others accountable.
88% want the Best Deal
Unlike Millennials who came of age during economic prosperity, Gen Z is growing up in a world shaped by the pandemic. This has fostered a generation acutely aware of financial realities and prioritizes value for money.
Research by Mintel India indicates that a staggering 88% of Gen Zers are looking to obtain the best deal on every purchase, underscoring their commitment to financial savviness. According to Saptarshi Banerjee, Senior Lifestyle Research Analyst at Mintel Reports India, affordability and value are paramount for Gen Z consumers, who are seeking innovative solutions without compromising on their living standards.
Why Catering to Gen Z?
Gen Zer’s are becoming powerful in terms of a surge in purchasing power and disposable income. With a staggering population exceeding 472 million, they represent a substantial consumer base that businesses cannot afford to overlook. Their digitally savvy nature, coupled with a strong presence on social media and various online platforms, amplifies their influence far beyond their immediate circles. Engaging with Gen Z means tapping into a demographic that actively interacts with brands online, shaping brand perceptions and reputations through their shared experiences.
This generation is driven by a powerful combination of distinct values and priorities, such as sustainability, social responsibility, and individuality which drive their consumer choices. Aligning this opens the door for local Indian brands as their commitment to smaller environmental footprints and transparent business practices resonates deeply with Gen Z’s values, fostering trust and loyalty. Furthermore, understanding Gen Z’s preferences can provide valuable insights into emerging trends and market demands, enabling businesses to stay relevant and competitive in an ever-evolving landscape. As businesses embrace the Gen Z generation, they position themselves for sustainable growth and success in the years to come.
J.hirani provides strategic advisory services to manufacturing, service brands, product brands, online/ offline business. Read our capabilities.
Nicely Explained?
Absolutely right, GEN-Z those have born in between 1997 to 2012 are always trend setter. They are the greatest thinker about futuristic policies, sustainable world, Solutions towards global warming, they always want to overcome the problems by their own.
They’re growing up now
They’re prioritizing saving money batter then us
They love to travel not only for travel but explore new places by their importance in history.
They’re prone to anxiety.
They see gaming as more than a hobby.
Their environmental attitudes aren’t as strong as you think
They might define AI adoption very well rather than us
They shape culture through social media..
So inshort, they are more responsible for their future..
Generation Z has capacity to use their capabilities in advance equipments with resources.