Gen Z: Brands are chasing 37.7 million Indians for the $1.4 trillion they could spend

India’s massive Generation Z population, currently estimated at 37.7 million people, is changing the country’s consumer landscape. As more and more of them enter the workforce, brands are scrambling to cater to this new, influential demographic, which is expected to account for a significant portion of India’s consumer spending. According to a joint report from Boston Consulting Group (BCG) and Snap Inc., Generation Z already influences a staggering 43% of household consumption and contributes $860 billion to the economy, $200 billion of which comes directly from their own income.

Also Read: India’s ‘swipe-up’ generation will swipe right on festive offers

The report further estimates that around 36% of India’s Generation Z will be in the workforce by 2030, driving an impressive $730 billion in direct spending and a total of $1.4 trillion when influenced spending is included. These numbers highlight why brands are working to position themselves as Gen Z favorites, as this cohort is expected to shape the future of consumer behavior in India. As the economic influence of India’s Generation Z continues to grow, brands are being forced to rethink their behavioral strategies. Personalization, affordability and responsiveness to trends are critical to attracting this tech-savvy generation. The festive season is expected to witness further increase in their spending, providing a glimpse of the future consumer landscape in India.

Amazon, Flipkart’s plans

E-commerce majors like Amazon and Flipkart are taking aggressive steps to capture the attention of this app-savvy swipe-up generation. Amazon Fashion has launched a dedicated next-gen store while Flipkart has launched Spoyl, an app-in-app fashion platform for young shoppers. Flipkart’s fashion subsidiary Myntra has also launched Fwd, a platform specifically tailored for Generation Z. The focus on addressing Generation Z’s online shopping habits reflects their important role in driving the growth of India’s e-commerce sector.

For Meesho, one of India’s leading online marketplaces, Generation Z shoppers are an important target group, with one in three users being under 25 years old. Zeba Khan, director of fashion and beauty at Amazon India, noted a “three-fold jump” in Gen Z customers after the launch of the Next Gen Store. She also highlighted the challenges in targeting this group, saying, “India’s diverse demographic presents a challenge for fashion brands targeting Generation Z…Price sensitivity is a key factor for a significant portion of the population seeking value for money and looking for affordable options. Khan told ToI.

The influence of social media on Generation Z

Generation Z’s relationship with technology is fundamentally different than that of previous generations. As digital natives, they grew up in a world where swiping, scrolling and sharing are natural. Social media platforms, particularly Instagram and Snapchat, play a central role in shaping their preferences, behaviors and purchasing decisions. Their penchant for social media-driven consumption is evident as brands across industries, from fashion to consumer electronics, adapt their strategies to engage with this highly connected audience.

Aman Gupta, co-founder and chief marketing officer of wearable brand BoAt, pointed out how Generation Z’s preferences are changing the industry. “Gen Z’s preferences, behaviors and aspirations are transforming industries and we design our business strategy with them at the core… we value personalization, affordability and durability – key factors that Gen Z values ​​in their purchases,” Gupta told ToI, and added that Generation Z is expected to contribute significantly to BoAt’s revenue in the next three to five years. This trend is fueled by the increasing use of wearable technology among younger consumers.

The power of social media influence is undeniable. Brands that do not align with Gen Z values ​​or appear overly commercial risk being canceled by this generation. Gaurav Khatri, co-founder of Noise, a homegrown wearable brand, said, “They are quick to reject brands that seem disjointed or overly commercial. To do this, we have to remain agile and constantly develop our products.”

Festive Season: A Gold Mine for Brands

As India enters the festive season, brands are gearing up to capitalize on the surge in consumer spending by Gen Z. Dhruv Dhawan, Head of Ads at Disney+ Hotstar India, predicts a 47% increase in spending during the three-month festive window. with an average budget of Rs 25,000. This time represents a unique opportunity for brands to tap into the shopping spirit of this young, app-focused generation.

The consumer behavior of Generation Z differs significantly from that of their Millennial predecessors. Nandita Sinha, CEO of Myntra, noted that Gen Z shoppers shop eight to nine times a year, compared to five to six annual purchases for Millennials. This accelerated buying cycle is driven by their commitment to global trends and rapid new product launches.

Contrary to the belief that Generation Z lacks disposable income, over 70% of them have side hustles, making them a lucrative target for brands. Their propensity for frequent purchases combined with their focus on trends rather than brand loyalty makes them a dynamic and challenging audience for marketers to retain.

From fashion to technology: The wide reach of Generation Z

Generation Z’s influence extends across a wide range of sectors beyond fashion. According to Nimisha Jain, senior partner and managing director at BCG, their impact is evident in industries ranging from automotive to consumer durables. For Gen Z, trends take precedence over brands, making it harder for companies to keep them engaged, she said.

This sentiment is echoed by Danny Jacob, head of marketing at Titan’s Fastrack, which has introduced sub-brands and targeted campaigns to capture more of the Gen Z market. Fastrack’s recent product launches, such as the Fleek and Gambit collections and the Vyb brand, have increased sales significantly, driven in part by Gen Z shoppers.

(With ToI inputs)