Millennials redefining the consumer story in India – Retailers Association of India - Deloitte Report
- India and China constitute the largest share of millennials compared to all other countries across the world
- Millennials are already the chief wage earners accounting for approximately 70% of total household income
- Indian millennials spend a considerable time on online activities, averaging around 17 hours every week
- Globally, less than one-third (31%) consumers consider a product premium only because it is expensive
- Online retail expected to surge its share from 3% to 7% of the total retail market in India by 2021
NATIONAL, INDIA – 20 February, 2018 – The Indian economy seems to be set on a high growth trajectory. Consumer markets in India are expected to reap the benefit of these favorable macro- economic parameters as well as its demographics. According to the RAI-Deloitte report “Trend-setting Millennials: Redefining the Consumer Story” released today, millennials’ contribution to the Indian consumer segments is particularly noteworthy. The population cohort represents nearly 34% of the Indian population and unlike other developed countries, this generation is amongst the chief wage earners in the household in India.
As one of the youngest countries globally, India has become one of the major flag bearers of development, not only in Asia but across the world and millennials have taken the center stage. The survey gives detailed insights into the shopping journey of consumers in India from the millennials’ perspective. This generation spends most of the amount on monthly essentials followed by education and spending on utilities. Savings account for 10% of the overall or any incremental income which indicates a shift towards consumption economy rather than a savings economy which was a predominant feature of the preceding demographic cohort (Gen X – born between mid-1960s to the early-1980s).
Kumar Rajagopalan, CEO, Retailers Association of India (RAI) added,“India is a fast growing nation and for any modern retailer who wishes to stay relevant, millennials are an important customer segment. The retail consumer market in India is booming as the purchasing power and capacity both have increased. Therefore, an understanding of behavioral patterns, shopping habits and the rationale behind purchase decisions becomes absolutely vital and this report gives an understanding of those finer nuances.”
The report discusses key characteristics of the evolving customer needs of these millennials which are as below:
- Greater emphasis on health care and wellness – Research indicates that 36% of Indian millennials have a fitness app installed on their phones and about 45% think leading a healthy life is essential
- Importance of convenience – Convenience is an important consideration for millennials on account of their hectic lifestyle and hence ‘ready to eat’ product category has grown exponentially at the rate of over 28% p.a. over the last 5 years
- Value delivered by the brand - Brands that clearly define the source of their materials or establish work done for a specific cause/movement tend to strike a chord with current and prospective customers
- Need for personalization - Millennials aim at differentiating themselves from the rest of the crowd and in lieu of the same, prefer personalized product and service categories
Being a tech savvy generation, millennials are highly influenced by the usage of data analytics. Internet, e-commerce, m-commerce, digital payment wallets, social media, etc. have already laid the foundation for driving the consumer markets towards omni-channel. However, contrary to the belief of millennials shifting rapidly towards online retailing, they seem to be rather making a gradual shift towards the e-tail mode as brick-and-mortar retailing still remains a relevant channel. product touch and feel still remains one of the biggest reasons of millennials for shopping offline.
With increasing spending power of the millennials, the 18-35 year old population group is predicted to play an increasingly major and intrinsic role in the Indian economic growth trajectory. Their contribution towards the growth of various segments within the consumer markets is expected to be particularly prominent as the trend-setting millennials redefine the consumer story going forward.
“Millennials play a vital role for survival of the modern retailers and are trend setters for the shopping community. Online retail in India grew from nearly negligible in 2010, to 3% of the country’s retail market in 2015. It is further expected to grow at a CAGR of >30% in India from 2016 to 2021, driven by the shift of millennials and younger population from traditional retail to online channels. Millennials spend most of the amount on monthly essentials followed by education and spending on utilities. Any incremental income is spent towards eating out and entertainment (32.7%), apparel and accessories (21.4%), electronics (11.2%), etc. Savings account for ~10% of the overall or any incremental income. This report emphasizes the strategies adopted by retailers for growth and the approaches used by the millennials to support their buying decision. It particularly deep dives into the aspects of how millennials have led the shift in consumer behavior and showcases that contrary to the belief of millennials shifting rapidly towards online retailing, they are rather making a gradual shift towards the e-tail mode as brick-and-mortar retailing still remains a relevant channel.” says Anil Talreja, Partner, Deloitte India
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