Climbing up the income ladder
by Indicus Analytics Private Limited
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Affluent households with chief wage earners in their middle age form a sizeable segment of urban SEC A households. As the second largest SEC A sub-segment, this group is comprised of one-quarter of ...
Affluent households with chief wage earners in their middle age form a sizeable segment of urban SEC A households. As the second largest SEC A sub-segment, this group is comprised of one-quarter of all urban SEC A households. The chief wage earners in this group are well-educated businessmen or professionals, and are generally in the age group of 35-44 years. The defining characteristic is that they are all married with young children. Households have, therefore, usually three-four members, and most families have one or two children. Though this segment includes both joint and nuclear families, the households are predominantly nuclear families and just 16% have one or two senior citizens.
These small, well off families are largely dependent on the earnings of the chief wage earner, though in nearly one-third of the households, there are other earning members as well—spouses or parents. Most spouses are homemakers, who do not necessarily need to go out to work. Yet, they are, for the most part, well-educated and quite capable of being employed outside the home. The earning potential is, therefore, high in this segment, and the next generation is also being groomed to study higher skills, in all probability abroad.
The head of the household is usually a graduate; many are professionals. While self-employment accounts for around 40% of the chief wage earners in this segment, the majority hold salaried jobs. The sectors of employment are diverse—education, health and social work being the most common fields, followed by manufacturing. Construction, real estate and trade, both wholesale and retail, are other sectors that offer the maximum potential to those who may not be very well-educated or who may not even hold graduate degrees, but who have basic business skills and families or other connections to start off small enterprises on their own. The chief wage earners in this segment are well-settled in their careers.
As affluent households in their middle years, the majority live in houses they own, a higher percentage than the SEC A households in their younger years. These families are climbing up the income ladder and the ownership of consumer durables is high—not just vehicles and large TVs, the latest in microwaves and fridges are becoming the staple in many urban affluent kitchens.
These households are the ultimate consumers of the new and the trendy. They are well-connected to the world through traditional media as well as through the Internet. They travel for holidays, within India and abroad. These families have the desire and the ability to get their children the best the world has to offer. Not all families are super-rich, but this segment is weighted towards the higher-income categories.
When it comes to location, it is but natural that while there are many households that fall in the highest income category, earning more than Rs.15 lakh per year, the highest number is in Mumbai, India’s financial and commercial capital, followed by Delhi and other metros. Yet, smaller cities such as Nagpur, Faridabad, Vadodara, Lucknow, Rajkot, Coimbatore, Surat, Durg, Ernakulam and Dhanbad also have a sizeable number of these SEC A households in their middle years. Interestingly, if we look at the proportion of households in the top income category, Gandhinagar, Chandigarh and Faridabad stand out. The beauty of India’s urban consumer geography is that pockets of affluence are found in all regions and demand is spread out across the country.
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