Tracking young households
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Urban consumers have varied socio-economic profiles, and when it comes to consumption patterns, the educational and occupational profile of the chief wage earner matter just as much as his or her life ...
Urban consumers have varied socio-economic profiles, and when it comes to consumption patterns, the educational and occupational profile of the chief wage earner matter just as much as his or her life stage, fam- ily type. The broadest five categories can therefore be sub-segmented by the life stage of the chief wage earner to get a deeper understanding of household pro- files. In this piece, we take up the young- est and most affluent households in ur- ban India--where the chief wage earner is usually a graduate, in the age group 25-34 years.
SEC A is the most educated of all cate- gories, and the young chief wage earners are at the beginning of their careers.
There is a mix of businessmen and pro- fessionals, while the majority have regu- lar salaried jobs as executive or manag- ers in companies. These chief wage earners work in many different sectors, with a little more than a third taking up education, health and social work-relat- ed careers. These include those who are self-employed, professionals or in sala- ried jobs--not just professors, school teachers and doctors but also chartered accountants, lawyers, masters of busi- ness administration (MBAs), architects and engineers--all of whom find a role to play in social work. The booming real estate industry has also absorbed many from this segment, while manufacturing companies and government jobs are the next two sectors offering maximum em- ployment to these well-educated young people.
If you look at the income distribution, a large majority fall in the lowest brack- et, earning less than `300,000 a year. But remember that these are small house- holds, usually one or two members, and the picture changes. There are many already earning more than `1,500,000 a year and these households are spread all across the country. When it comes to ex- penditure in this income segment, Mumbai and Delhi lead, with cities such as Nagpur, Vadodara, Patna, Lucknow, Indore and Surat ranking among the top 20 largest markets.
As these are young households, around a little more than half of the chief wage earners are married, but do not have children yet. Household sizes are, therefore, small. In fact, more than a third of these young rich households are one-member households and anoth- er one-third constitute two-member households, usually couples. These fam- ilies will grow as the chief wage earner gets married and has children. These households will move into the next life stage, more settled in life, commanding much higher incomes and more diverse consumption patterns.
However, already, these young house- holds have done quite well for them- selves; almost a third live in houses they own and are moving up in life purchas- ing consumer durables. To give just one example, on an average, across India, 4% of these households have bought an LCD/plasma TV, and apart from the metros, there is higher than average penetration even in cities such as Amrit- sar, Jabalpur and Visakhapatnam.
This is a small segment but irrespec- tive of where they live, young people are bound by the same aspirational values, and with assured incomes and easy pur- chase schemes, gizmos and gadgets are among the first items to be picked up.
The higher aspirations show up not just in durables but in food patterns, eating out and in modes of entertain- ment as well. Whatever they have, they are in the market for an upgrade.
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