The annual consumer spending is slated to reach $6 tn from the existing $1.5 trillion, and by 2030, India will be a young consumer economy with 77 per cent millennials and Gen Z. But what are the millennials spending on right now? ShwethaSatyanarayan finds out.
“India is at the cusp of a great boom in consumerism and will see the emergence of several exciting new brands to cater to growing millennial population. This segment is looking for different sensibilities and product choices from their brands,” observesKanwaljit Singh, managing partner, Fireside Ventures.
With digital natives a.k.a the millennials being omni-present on all touch points, it’s not very difficult for a brand to connect with the young consumers and tell its brand story. And often, as the story and the product sell, a loyal customer base is built for a brand.
According to a Word Economic Forum and Bain & Company report, India will witness a 4x growth in consumer spend by 2030. It will add 21 million high-income and 140 middle income households. Also, the consumer spend alone is slated to go from $1.5 trillion to $6 trillion. However, the pertinent question remains what are the categories that are in tandem with the buying habits of millennials and on which the millennials don’t mind spending a little extra.
Investors Vishal Singh and KannanSitaram observe that strong trends have emerged in the market and they are the hotspots for disruption as these are the categories millennials are willing to spend a little more. They are- health and wellness; indulgences and childcare products.
Health & Wellness
Eating right and eating better has been one of the most important consumer spend for millennials, observes Sitaram. He says, “Millennials are willing to spend more money on indulgent dining options. When we say indulgent, it’s not just the dining experience, but the quality of food. They want to eat healthy food and even if such foods come at a premium cost, the millennials particularly don’t mind spending a little more on the healthy food.” According to an ASSOCHAM report, the organic food market in India has been growing at a CAGR of 25 per cent and is estimated to be worth a whopping Rs 12,000 crore by 2020.
So for the average millennial, quality of life comes with not just eating right and being health conscious, but looking and living right too, observes Sitaram. He says, “Millennials are not just looking at swanky restaurants or bucket list travels for indulgent experiences. Indulgence is happening in every sector, whether it’s a fancy salon or a premium product for skin and hair or just a remedy to relieve stress. The young spenders are making their choices very clear while spending money from their pockets. Also, living better is an indulgent for a majority of millennials. Segments like home décor get good spending as personal spaces are becoming very important for youngsters.”
Childcare and other categories of children
“The Indian millennial parents want to shape the CV of their children,” says Sitaram. Unlike the parents of other generations, the new age parents don’t mind spending on childcare products- whether it’s baby products or academic material. As a result of high demand and parents’ willingness to spend more, a host of startups have opened doors in the market. Young startups like Mom & Me, Mamaearth, Magic Crate, Flintobox, have emerged as clear winners in the popularity race.