Decoding Spending Habits Of Young Indians: Spice, Nielsen Report

The report elaborates on consumer behaviour, youth's dreams and aspirations with respect to their short term and long term goals.

With an average age of 29, today India is one of the youngest countries in the world. More than 62% of our population is in the working age group and more than 54% of the total population is below 25 years of age. Popularly called ‘Millennials’ and ‘Gen Z’, they are the socio-economic fabric of our nation and the future. With increasing internet and smartphone penetration, this digital native generation expects customised solutions that are designed keeping them in mind. Decoding what they want, their dreams, aspirations and beliefs will be the key to serving this population for all industries and sectors alike. 

Slice, in collaboration with Nielsen, came out with a report to gather learnings about this generation and understand their attitude towards money and spending, with a special focus on their attitude to credit cards. The inferences of this study are a result of data gathered through primary research, mainly from focus groups discussions. These discussions took place between July - October 2020 and included both male and female participants between 18 - 26 years of age. The categorization was based on – Students, First Jobbers (Full time working, 0 – 2 years’ experience) and Experienced Jobbers (Full time working, 2 – 5 years’ experience). 

This is a generation who prefers to start early to make money, earn their financial independence by being less & less dependent on family money. Their attitude towards personal finance management is a blend of technology and legacy. The key factors driving today’s generation is – Digital, Appetite for credit and Budgeting, Saving and Spending. The study segments this consumer by their mindsets and deep-dives into how they approach money, spending and usage of products in this category - specifically credit cards.

Some of the key traits that stand out:

• Yolo with responsibility

While some find it difficult to save & yet live the life they want to, they believe in the need to find a balance. They are aware of their current scale and salary structure and hence are prudent with money one-dimensional about it. 

• Upskilling is the only way up

They believe in learning new things - where it’s academic, languages or a skill - by proactively seeking out short term courses that they can undertake along with their current lifestyle. Skills are centered around self-improvement & development rather than a mere check mark.

• Clear financial goals

They are fairly confident about their spending habits, believe in budgeting and setting goals for themselves in the short term and long term. Short term goals revolve around lifestyle, fitness, achieving work-life balance. Long term goals are largely centered on career, finances and family.

• Success, but on their own terms

Younger consumers are itching for their own financial freedom and be able to make decisions themselves. The drive to be ‘owners’ has never been higher, especially among First & Experienced Jobbers

• Live with certain anxieties

Work & financial stress was most common - deadlines & performance-related anxieties, not being able to save or earn more to have a lifestyle they desire. Something unique to this generation, they feel the impact of issues that are beyond their control - environment, climate change, world peace.

• Emerge as purchase influencers

Purchasing goods online is left on the youngsters by parents due to their greater familiarity with e-commerce sites & apps. Have influence on decisions regarding purchase of electronic goods - mobile phones, TVs and computers - as well as the mode of payment

• Changing the idea of Brand Loyalty

More likely to look through multiple options and choose what they consider best irrespective of brand. Place more importance on the experience and the convenience of their purchase journey, beyond just the quality of the product or service.

• Purposeful about the content they engage with

Display a strong tendency to use their smartphones for content consumption as well as social interactions. Content is largely consumed on social media, entertainment (OTT) - YouTube, Netflix, Amazon Prime, Instagram, Facebook, snapchat.

• Yet have short attention spans

Both Millennials and Gen Z spend hours a day in front of a screen but are far less likely to spend extended time periods on a single site. Due to early exposure to a vast variety of options, they have short attention spans, and switch attention easily.

4 key variations in consumer mindsets emerge:

1. The Lifestyle Seeker: These are consumers who are largely instinct driven and go with what “feels” right. As shoppers, they have a higher tendency than others to exhibit impulse purchases. Social media trends act as major influences in purchase/spending behaviour. They seek experiences and shop on a regular basis as they derive a sense of fulfilment from it. Credit card & UPI form their preferred modes of payment.
2. The Value Maximiser: As value maximixers, these consumers seek out the best deal from a purchase as well as the mode of payment. They are more likely to save towards short term goals i.e. purchasing something within a year or two and will likely have a variety of different modes of payments including payments apps, cards etc.
3. The Control Seeker: These consumers are likely to have clearly defined budgets for spending month on month. Before making a purchase, they frequently consider what products are a must have vs. good to have. They are wary of products that they don’t have a complete understanding of such as hidden charges, annual fees etc. Debit cards & e-wallets form their preferred modes of payment.
4. The Conservative: These consumers are likely to steer clear of financial products unless they get a confident review from someone they trust. They are unlikely to seek credit unless required for larger purchases, in which case they may seek out a loan. Most of their purchases are likely to be utility based and their preferred mode of payment is cash.

With money been seen as an enabler for this generation, it clearly shows that they have a prudent approach towards money for their goals and ambitions.