This document summarizes the growth of internet usage in India over time. It notes that internet penetration in India is still low at 4.2% but growing steadily. The number of daily internet users has increased by 15% annually to 32.4 million currently, with most users coming from urban areas. Regular internet users have also increased and now make up 83% of all online Indians. Internet usage is becoming more common in smaller towns and non-metro areas, accounting for 39% of users compared to 27% in 2001. Overall internet is growing in India but there remains significant potential for further growth.

1. Introducing India…

2. Since early 1990s, India has witnessed great social, political and cultural change. As the world’s
largest democracy, it’s most diverse nation and one of the fastest growing economies, India is now,
sixty years after Independence, widely regarded as an emerging superpower. India’s gross domestic
product passed the trillion dollar mark. This is the first time in history that it has been valued so
high. But, the most interesting fact is that it will pass the next trillion-dollar mark in nine years at
most- by 2016 at the latest. And the composition of that second trillion dollar market will be very
different from that of the first.
The findings from the latest study, The Bird of Gold- The Raise of India’s Consumer Market
published by the McKinsey Global Institute (MGI), reveal that if India continues on its current high
growth path, over the next two decades the Indian market will undergo a major transformation.
Income levels will almost triple and India will climb from its position as the 12th largest
consumer market today to become the world’s fifth largest market by 2025. As Indian incomes
raise, over 291 million people will move from desperate poverty to a more sustainable life, and
India’s middle class will swell by over ten times from it’s current size of 50 million to 583 million
people. By 2025, over 23 million Indians- more than the population of Australia today- will
number among the country’s wealthiest citizens. While much of this new wealth and
consumption will be created in urban areas, rural income growth will benefit too. Forecast for
India’s real GDP growth rate over the coming two decades generally range between 6 to 9 per cent
per year. MGI forecasts real compound annual growth of 7.3 percent from 2005-2025, a
marked acceleration from the 6 per cent growth of the previous two decades. In this growth
rate, average real household disposable income will grow from 113,744 Indian rupees in 2005
to 318,896 Indian rupees by 2025, a compound annual growth rate of 5.3 per cent. This is
significantly more rapid than the 3.6 per cent annual growth of the last two decades with the
exception of China, and much quicker than income growth in other major markets. For
example, US average real household income increased at a compound annual growth rate of
1.5 per cent over the past two decades; for Japan the figure was 0.25 per cent. Rising income
will create a 583 million-strong middle class. India’s raising real incomes have already had a
significant impact on poverty reduction. I
n 1985, 93 per cent of the population had an annual household income of less than 90,000 Indian
rupees, or less than $1,970 per year or $5.40 per day- an income bracket categorized as deprived. By
2005, this had dropped by about two-fifths to 54 per cent of the population, with the biggest fall
occurring since 1995. Thus more than 103 million people moved out of desperate poverty in the
course of one generation. This is all more impressive given that India’s population grew by 352
million during this period. MGI’s forecast shows that overall economic growth will continue to
benefit India’s poorest citizens and that the deprived segment will further drop from 54 per cent of
the population in 2005 to 22 per cent by 2025. India will become the fifth largest consumer market
by 2025. The aggregate consumption in India will grow in real terms from 17 trillion Indian rupees
today to 34 trillion by 2015 and 70 trillion by 2025- a fourfold increase.
After income growth, the second largest factor driving India’s development as a consumer market is
its continued population growth. India’s strength has always been in numbers and today it is the
second only to China in this respect. However, China’s strict adoption of a one-child policy means
that India’s population is growing significantly faster by comparison.

3. According to UN projections, India will overtake China to become most populous country in
the world by 2030. The rapid population growth will give India a youthful demographic
profile as its dependency ratio (the ratio of children and elderly to income earners) drop
from 60 today to 48 by 2025. This signifies a rapidly growing labour force and quickly
expanding consumer base.
Between 2010-2030, India will add 241 Million people in working-age population (and that
means the children who are currently in our education system), Brazil will add around 18 million,
while China will add a meager 10 million people during the same time. So even with all the
drawbacks that India has, this particular Indian aspect is going to prove pivotal in making India the
world leader in coming years.
The demographic outlook for the BRIC countries (Brazil, Russia, India and China) could hardly
be more different. In terms of the demographic transition model, India is at the beginning of
stage three (declining fertility, population growth), Brazil and China are at stage four (low
mortality and fertility, population trending towards stability), while Russia is already at
stage five (sub-replacement-rate fertility, declining population). Not surprisingly, the
differences in the projected change in the working-age population the economically relevant
variable are very significant in both absolute and relative terms. [Source: DB Research]
The demographic developments in the BRICs over the next 10, 20, 30 years will vary greatly. This
will impact not only economic growth prospects, but also savings and investment behavior and
potentially if somewhat difficult to quantify financial market growth prospects.
India is demographically in a substantially more favorable position than China and Russia.Brazil’s
demographic window (defined here, non-technically, as a falling dependency ratio) will close
around 2020-25, while in China and Russia it is closing right now. India, by contrast, will enjoy
a very favorable demographic momentum for another three decades. So even though in
current scenario, India may not exactly be mentioned in the same breath as US, UK and China, the
picture in next couple of decades will be quite different.

4. Under current economic scenario, 2039 would have a world very different from
the one we see today. It would be significantly wealthier, with per capita
incomes averaging $23,400 in 2007 dollars, nearly three times the $8,500 today.
The economic centre of gravity would shift to Asia, which today accounts for 21
percent of global activity, but by 2039 could account for more than half. Three
giant economies, China, India and Japan, would lead Asia’s resurgence.

12. Internet and Mobile Phone:
The Indian Internet Space
As user engagement grows with it, Internet will grow faster than all other media. In India
Internet can be viewed as a funnel. At the top level is the universe of urban population; it
offers tremendous Internet growth in urban India. Every 10th individual in urban India has
accessed the Internet.
However, Internet is also a function of many other variables, chief amongst them is a basic
level of familiarity with English, to make meaningful usage of the Internet and also
familiarity with the common access device, the PC.
In India almost three fourth of all English speaking language populations now PC
literate but of these only 55% have experienced the Internet. Thus there exists an
immediate potential for Internet converts amongst existing PC users.
After reaching the outer limit of growth amongst the English speakers, the next challenge
would be to reach out to the non-English speaking population. IRMB International and
Internet and Mobile Association of India(IAMAI) estimates that as of September 2006 there
were 38 million 'ever' users (who have used the Internet at any point in time) in India. These
include one million 'ever' users from rural India.

13. According to the Juxt India Online 2009 Study, internet in India is still at its nascent stage with
close to a 47 million user base and a user penetration level of 4.2%. The penetration is very
low, especially if our reference point is the western world and smaller countries.
Access to internet is slowly falling in place, are internet access prices are declining and
likely to go down further, computing access device prices have fallen but need to fall further,
and mobile /handheld devices are very likely to emerge as 'the next biggest' internet access
device in the country with the 3G licensing the place.
The CII IMRB report on broadband roadmap for inclusive growth, 2009 -2014 states:
1. Only 1 in 100 households in India owns a broadband connection, while 3 in 100
household own a desktop/ laptop
2. Amongst enterprises, desktop/ laptop penetration is much higher (41%), however only
18 people in 100 own a broadband connection
3. None of the 51mn 3G-enabled mobile phones are being utilized for broadband usage.
Growth Trends
The total base of internet users in India in January 2009 stands a 46.49 million. Of this
total internet user base ,39.0 million or 84% of online Indians come from rural areas.
In the last one year, Internet usage in India has shown a definite slowdown in growth. If the
overall internet using population in urban India grew by 33% during 2007-2008 to reach 40.34
million, then it has shown a marginal shrinkage of 3% in 2008-2009 touching only 39 million.
at all India level, there is a more noticeable shrinkage in internet user base number of 6%, from
49.4% million last year to 46.5 million this year.
As the Juxt India Online report explains, this shrinkage is largely a result of decline in the
numbers of occasional users, both in the urban and rural areas. Some of this decline in
occasional users is expected as a section of the occasional users are likely to graduate to
regular usage. However, the fact that very few new occasional users have got added in the last
one year is undeniable and that some of the existing occasional users may have 'lapsed' is quite
possible. The possibility of 'lapse' of some occasional users gets strengthened further by the
fact that the base of the 'regular' internet users (urban and rural) has increased by only
3.5million and that the base of occasional users has fallen by almost 6.4 million.
The Internet Universe can be divided into six exclusive and exhaustive segments based on
specific demographics. Users between the age of 18-35 are the biggest segment in India
accounting for 50% of all users on the Internet.
This has been aided by the traditional focus of Internet content providers on youth centric
applications. Like their peers in other countries, Indian youth are also more inclined to adopt
technology faster and be the leaders in showing the way to the other segments.
Overall the proportion of different segments has been stable over the last couple of years;
however as Internet penetration for households increases, the 'at home' segment like non-
working women and school children would grow in proportion over next two to three years.
Expect this growth, many content providers have come up with games stories targeting school
children and are planning to come up with women specific content in the near future.

14. Penetration
Though the users base of 'occasional' internet users has shrunk significantly and the users base
of 'regular' internet users has grown only moderately, the users base of the most active section
of internet users-the 'daily' internet users -has grown quite steadily (by 15%) to now touch the
32.4 million mark. At this level, the 'daily' internet users account for 70% of all internet users.
That is, three out of four online Indians are on the net daily. And if one looks at the base of
'regular' online Indians are on the net daily.
The Internet 'ever' user base has doubled over 2004. The number of PC literates is growing
steadily over the years and has grown by 270% over 2000! The growth of 'ever' users and
'active' users ( who have used the Internet once in the last month) has been even more
impressive with 540% and 950% growth respectively over 2000.
‘Ever’ users as a proportion of PC literates have been constant over the years at about
30%, except last year when it grew to become 54%. Thus every second PC users in India
has now experienced the Internet at any point in time; this has now created a critical
mass for rapid growth.
The trend of 'active' users as a proportion of 'ever' users has grown from 40% in 2000, to the
current proportion of 66%. This is a clear demonstration that Internet is not merely trials but
several users continue to actively use it.
Father, the growth in the 'daily' users’ base has been more remarkable among the rural users
at 25% than among the urban users (14%)
Among the 32.4 million internet users, 28.1 million, or the bulk 87% of them, still
come from the urban areas. Rural areas account for only 4.3 million (or 13%) of the total
daily internet users base.
Further, within the total base of 46.49 million online Indians, 38.5 million, or 83% are 'regular'
internet users. The balance 7.92 million online Indians, or 17% of them are 'occasional' users
of the net.
Within the base of 39 million urban online Indians, 33.15 million, or 85% of them are 'regular'
internet users. In contrast, the number of 'regular' internet users in rural India stands at 5.42
million ,implying that a good 72% of the rural online Indians are also 'regular' net users.
In sum, when seen from the entire internet users base perspective, the proportion of regular
or occasional, urban or rural internet users bases is:
Urban regular users at 71% (+10% points over last year)
Urban occasional users at 13% (-8% points over last year)
Rural regular users at 12% (+2% points over last year)
Rural occasional users at 4% (-4% points over last year)

15. In terms of penetration of internet usage among the total population in India, the number
stands at 4.2% at the all India level .The penetration levels within the urban and rural population
stand at 11.4% and 1.0% respectively. Compared to last year, the penetrations in both the urban
and rural areas have declined marginally.
While only 13%of the Indian population have 'graduate' or 'graduate plus' education
levels, almost three out of four regular internet users (76%) have a high level of education.
Less than half of the regular online Indians (48%) are 'employed’. At 30%, students
constitute the single largest occupational group among internet users. Among the
employed,85% are 'salaried' employees while the balance 15% are self employed or
business owners.
In the line with the employment profile, about 41% of the regular internet users are 'head' of
household (+4 over the last year). With 48% employment rate, this means that there are 7%
internet users who are the 'secondary' earning members of their household. The balance 52%
regular internet users are the 'dependent' members of their families.
While women account for 21% of all regular internet users (up 3% points over the last year),
only 4% of all internet users (1 in 5 online women) are housewives.
The average claimed monthly household income (MHI) of a regular online Indians is Russ.
5,930 according juxtConsult India online land survey of 28,000 households.
interestingly, the average claimed MHI of urban online Indians is only 1.4 times that of the
rural online Indians.
However, 57% of the regular internet users have claimed MHI of less than Rs. 25,000. This
means that at least two out of three regular online Indians have below the online Indian's
average MHI.
Internet trials are increasing in the small and non-metros as more users log on and feel
confident enough to become part of this global community. From 27% in 2001, the non-
metros and small towns now account for 39% of all 100% Internet users.
The growth from smaller towns is driven both by better access and by increasing awareness as
mass media and word of mouth promote Internet. The top eight metros which have been the
traditional early adapters continue to be the biggest contributors to the Internet population in
India.
However the proportion has come down significantly over 2001 and should go down even more
over the next three years as more users from the smaller cities log on.
User intimacy with internet will grow as interaction through multiple platforms and access points
becomes common. The gap between PC owners and Internet subscribers is reducing.
The number of Internet subscribers is growing steadily and has increased from 25,000 to
2.9 million in the period of 1997- 2006. More PC owners are now opting for the Internet
experience at home; from a mere 9% in 97-98, the proportion of users who own an Internet
connection has come up to 76% of the total PC owning base.

16. This growth in Internet adoption can be attributed to faster and cheaper access options driven
by broadband technology. Internet and Mobile Association of India (IAMAI) and IMRB
International estimate that this proportion should grow further with added growth coming in
from smaller towns as the PCs and Internet access technologies get cheaper.
Internet is reaching out to the less affluent sections of the society. It is not just the smaller towns
which are contributing to the Internet revolution in India; it is also being driven by the less
affluent sections of the society. It is not just the smaller towns which are contributing to the
Internet revolution in India; it is also being driven by the less affluent section of the society, the
lower socio-economic classes. It has taken a combined effort of Internet stakeholders to reduce
the initial inertia and promote this interaction.
Firstly mass media has helped in creating more awareness for the internet, especially as tool
for empowerment. Secondly PCs and Internet connections have become more affordable,
making it easier for many more people to own a PC and use the Internet. On the applications
side, several one time applications like examination results and ticketing, which are non-
communication oriented encourage the less affluent to be on the Internet.
As corporate digital divide programmers and National e-Governance Plan (NeGP) initiatives
bear fruition; usage amongst lower SECs should increase phenomenally in the next two to three
years
Access point
In a complex Internet market like India there are clear differences in how demographic
segments use different access points. Choice of primary access point is a function of disposable
income, mobility and technology expertise. Thus cyber cafes are the dominant points of access
for students, driven by convenient access of privacy.
Office gains prominence and becomes the most used point of access amongst the working
segment as it is the only media they can access easily during the office hours/ their 8-12 hours
shift. Home is the main point of access for most of non-working women as it is the most
convenient and accessible point of access for them.
Internet as category is also competing with other media and this interaction can be clubbed
into three broad areas:

17. Internet exclusive: e-mail, chat/IM, and VoLP.
Communication is the 'core benefit which initiates users into the Internet category and
continues to be a key application.
Internet competing with other media: entertainment, jobs, matrimony and news.
As users mature, they look for other applications which are also offered by other media; thus
Internet directly competes with other media and needs to offer strong differentiation building
up on the convenience factor and developing other benefits.
Hooks offered by Internet: online banking, ticketing and products.
These services are the 'extended benefits' which increase the stickiness of internet and create an
advantage over other media, these need to be used as hooks to compete against traditional
media.

18. The future
The biggest barriers to the growth of number of users and connections are driven by
perceived high cost and low awareness. However, with cost of enablers and home access
reducing, there would be a shift in this perception in the near future. To tackle awareness
issues, it is important to create user ‘pull’ by large scale interventions on educating non-
users about the usefulness of this medium. This would then have to be supported by
customization of content to suit the tastes and needs of those who would be drawn to use the
Internet.
Mobile phone / Wireless Services
The E&Y-CII report in India 2012: Telecom Growth Continues says India's wireless based
increased from 1.6 million at the beginning of 2000 to over 325 billion in October 2008.
This has been achieved with successive years of sharp subscriber growth- 69% in 2004, 58%
in 2005, 97% in 2006 and 57% in 2007. Since wireless penetration was approximately 28%
in 2008, there is still large potential for future growth. The rising wireless base is reflected in
the growing share of the total telecom base . From just 5% of the country's telecom base of
32 million in March 2006, in increased to 87% of the 300 million telecom subscribers in
march 2008. By end 2012 there are expected to be about 640 -650 million wireless
subscribers, accounting for about 90% of the total telecom base. By then , wireless
penetration would have exceeded the 50% mark. Eight of the ten most populous countries -
China, India, the US, Indonesia, Brazil, Pakistan, Russia, and Japan- are among the top ten
wireless markets.

20. Emerging areas of Growth
The net wireless addition in circle C has begun to exceed metropolitan cities. In the first nine month
of 2008, while the four metros added 10.3 million subscribers, Circle c had 11.3 million subscribers.
In 2012, the majority of new wireless subscribers will emerge from Circle B and Circle C. Based on
analysis, Circle C will garner approximately 102 million subscribers and will exceed metros, which
will have approximately 62 million subscribers.
As per the 2009 TRAI report on the Indian Telecom Services Performance Indicators, the
overall rate of growth of wireless subscription in the QE June 2009 (9.1%)was lower as compared
to the previous quarter(12.9%). Higher growth rate in the previous quarter was mainly on account
of launch of GSM services by Reliance Communications Ltd.
The total wireless Global System for Mobile Communications (GSM) and Code Division
Multiple Access (CDMA) subscriber base increased from 391.76million in March 2009 to 427.29
million at the June 2009, thereby showing a growth of 9.07%. During this quarter 35.53 million
subscribers are added. Wireless Tele-density increased from 33.71 in March 2009 to 36.64 at the
end of June 2009. The rural wireless subscribers increased from 111.63 million in March 209 to
125.95 million in June 2009. Rural subscription (12.8%) has been growing at a faster rate than
urban (7.6%) subscription. The share of rural wireless subscription is 29.5% in the total wireless
subscription.

21. GSM Services
At the end of June 2009,GSM subscribers constituted 77% of the wireless market. the
GSM subscribers wereb328.83 million at the QE June as against 297.26 million at the
end of the previous quarter, showing a growth of 10.62%. Bharti with 102.37 million
subscribers continues to be the largest GSM mobile operator followed by Vodafone
(76.45 million), BSNL(54.36 million), and Idea (47.09 million).
CDMA Services
The CDMA subscriber base increased to 98.46 million during the QE June 2009 from
94.49 million at the end of the previous quarter. The growth in this quarter was 4.19%
as against 6.58% for the previous quarter. Reliance is the largest CDMA mobile
operator with 54.19 million subscribers, followed by Tata Tele Services(37.12 million)
and BSNL (5.27million).
GSM vs CDMA
The GSM subscription has been growing at a faster and the ratio between the growth
rates of GSM and CDMA has also been increasing. In the QE June 2009, the growth
rate of GSM was 2.53 times the growth rate of CDMA, as against 2.29 in the previous
quarter.
The Prospects
The 2009 Netscribes Mobile Value-Added Services report says the total number
of subscribers (fixed subscribers – 39.42mn and mobile subscribers – 261.07mn)
was 300.49mn in 2008. GSM subscribers are expected to go up to 500mn by this
year end. The number of mobile connections is estimated at 800mn by 2012.
Total revenues are expected to increase from USD 31bn in 2008 to USD 54bn by
2012. The tele-density of the country is projected to go up from 26.2% in March
2008 to 50% by the end of the fiscal year 2009-10.

23. Indian Youth :
As per Sanjay Tiwari, CEO of FuxtConsult, the term ‘youth’ is very loosely defined and used in
India. While some interpret youth to represent the 13 -24 years olds, some others are seen to
view them as 19 -30 year olds, while some even go to the extent of broad-basing them between
19- 35 years. However, from a consumption and marketing perspective, one need to have more
clearly defined understanding of the term youth, especially since in marketing the ability to
‘independently fund a consumption decision’ is as important as the possibility to make such an
‘independent consumption decision’
Given the criticality of the ‘ability to fund independently consumption decisions’ in defining
customers, it is imperative that marketers learn to differentiate between the youth who are
capable of taking independent consumption decisions but not funding them independently, and
the ones who can. So, rather than going with a generic and vaguely defined single terminology
of youth, marketers must look separately at the young who are capable of funding their
independent consumption decision now (Generation Now) and the young who are not capable
of independently funding their consumption decision now but may be able to do so in next few
years (Generation Next).
Youth Population Projections (in millions)
2001 2006 2011 2016 2021 2026
Age group
Total 1027 1114 1197 1275 1347 1411
Below 15 years 363 360 351 343 337 328
15-64 622 702 780 854 916 967
65+ 42 52 66 78 94 116
Source: Government of India, Economic Survey 2005-06, quoting Office of the Registrar General of India

24. Proportion of Youth Population by Region 2001:
15-19
Percentage Percentage
Region to Total to Youth
Population Population
Northern 9.51 30.12
N. Eastern 10.23 29.21
Eastern 9.59 27.50
N. Western 1.01 31.87
Western 10.00 28.21
Central 9.36 28.74
Southern 9.91 27.89
20-24
Region Percentage Percentage
to Total to Youth
Population Population
Northern 8.08 25.62
N. Eastern 8.88 25.35
Eastern 8.77 25.27
N. Western 8.89 26.76
Western 9.29 26.22
Central 8.31 25.52
Southern 9.24 26.0
25-34
Region Percentage Percentage
to Total to Youth
Population Population
Northern 13.96 44.24
N. Eastern 15.91 45.42
Eastern 16.39 47.22
N. Western 13.75 33.22
Western 16.16 45.77
Central 14.89 45.73
Southern 16.36 46.0
Note: Percentages are to the total and to the youth population of the region.
Source: Source: Draft Youth in India Report, RGNIYD, 2007

25. Socio-psychologically, youth in India can be divided into 3 different categories as mentioned below:
In the Indian context, where young people usually attain financial independence and stability
somewhat later, mainly in their 20s, one may take the young between 13-24 years mostly
representing the Generation Next and the young who are 25 years or more as part of
Generation Now.
If by and large generation next does not have any great ability to independently fund their
consumption preferences and decisions, should marketers look at them as a consumer
group at all? The answer is ‘Yes, by all means’ due to three significant reasons, viz. 1) even
as dependent members of their families these Indian youth represent a sizeable pie of
discretionary ‘individual’ level consumption within the household; 2) they seem to have a lot
of influence and say even at the ‘household ‘ level consumption, especially in case of
products and services which fall i the modern technology and lifestyle domain; 3) most
importantly, they represent the market of ‘tomorrow’ and marketers who do not engage
them would do so at the cost of their own future market prospects.
With their own earnings and financial independence in the future, most Generation Next
youth will ultimately grow up to be the prime targeted consumers of tomorrow- the
Generation Now of tomorrow.

26. In term of sheer size, Generation Next is almost 270 million individuals strong out of the current
Indian population of 1.15billion, accounting for 23% of Indians. Also almost 17% of the
Generation Next youth are already the chief wage earners of their households (those who
contribute the maximum towards the monthly household expense in their house). At 263
million, Generation Now (25- 39years)also accounts for an almost equal 23% of Indians.
It needs to be remembered here that just like ‘youth’ is not a single homogenous consumer group,
so is Generation Next. In fact, Generation Next is an amalgamation of two behaviorally
distinct age groups, 13-18 years old or ‘teenagers’ and 19-24 years old or ‘young adults’.
The spread of Youth:
Considering their zonal spread, nearly 39%(majority) of the 13-24 year olds reside in Northern
India, more so because at an overall level, Northern zone concentrates a major chunk of the
Indian population; the rest 19% are from southern and 21% each from eastern and western
India. About a fourth of them are from metros (27%) or smaller towns having population of
less than one lakh and accounting for another one fourth (26%) of them, thus posing a
challenge for the marketers to look beyond the metros (top 10 towns in India).
A 2008 Hansa research study titles YES! Youth: An Emerging Segment furnished the following
details:
1. Many households have only one young person ( 60%)- especially so in the East( 74%). In
the North, nearly half have 2 or more youth- mainly male youth.
2. Many households have a single earning member. More so in the East. in the West, more than
half have at least 2 earning members.
They live mainly with their family( 95%). Their families are largely nuclear families- with or
without elders. Those with elders are more in the North and those without are more in South.
Joint families are relatively more common in the West.
The minimum Household Income (MHIO is between Rs. 8000-20,000)
Most students get pocket money (92%) between Rs. 250 -1000. Rs.100- 500 is relatively more
than in South and East. Many get over Rs. 500 in the North. Men and older youth get
relatively more pocket money per month.
Some mothers work (9%). Many work full time; exception being the West where nearly half
work past time( 46% vs 29% otherwise).
Socio-Economic Background and Education:
Among this segment, 81% are single/ unmarried and almost 18% of them are married with
children. Although at an overall level, majority of the urban population comes from SEC ‘E’
households. When we look at the Generation Next youth segment, SEC ‘C’ households form
the single biggest chunk of urban youth and 21% of the rural youth come from SEC R4 (lowest
rural socio-economic class) households.
In rural India 80% of the youth have completed their higher secondary / senior secondary,
where as in urban India 40% of youth are either graduate or post-graduate.
0.2% of the Generation Next are from wealthy households though a decent amount of whole
population (5%) of them own a silver credit card.

27. Socio-psychology:
Indian youth are very family oriented and career focused. The career and family are the most
important priority in their life. In INgene survy’2009 53% stated that family is the most important priority
in their life and the then the career (39%)
survey found 76% Indian youth believes that “it is important that my family thinks I am doing well”

28. The most preferred way of spending time is with parents and friends.

29. AVERAGE SPENDS OF YOUTH WEEKLY:
According to the TRU Teen study conducted by Research International, pre-teens and teenagers
understand money fairly well in today's time. Parents are the leading source of income for
Generation Next. Majority of them get money from their parents when they need it. There is a
striking difference between a young Indian in 2009 from what it was in 1991. Teens today are
earning to augment their allowances, something which was rare in late 1980s and early 1990s.
The economic downturn in 2008 and during early 2009 has definitely impacted the teen
spending. The average urban teen in India spends close to Rs. 132(approx. US$ 3) a week which
is lower as compared to last year rs. 200( US$ 4-5). But the number of teens spending' nothing '
in the previous week's time has come down from 13% to 8% this year.
Today's youth is on the fast track to success with aspirations soaring high. Their look out for part
time and odd jobs has increased and the need to 'Arrive' in the society has become of primal
importance. No wonder close to 30% of the teens want to achieve financial independence even
before they are out of their teens.
As youth grow older, their tendency to spend more also increases. It’s a branded world out
there and the demands just keep increasing. Of all the teens, the teens in the west zone are who
the marketers would love; they are the highest average weekly spenders. East zone teens turn out
to be very conservative in their spending patterns. There is also a significant difference in the
way younger teens spends compared to the older teens.
Teens in the age of 16 to 19 years spend twice as much as their younger counterparts.
Teens are the rising face of the Indian consumer and they have given the recession a miss as
it may seem. The projection of teens spending same or more as compared to last year is a
whopping 72% as compared to the 55% found in the previous wave. Optimism and
consumer power are doing the trick for Indian teens unlike teens in the West where they
have been struck hard with the ongoing recession.

30. SPENDS ON KEY CATEGORIES:
According to the TRU teen study conducted by Research International, 'Kapda. Ipod, and Cell
phone,' the new mantra, has replaced what used to be the description of the bare necessities of "Roti,
Kapda,aur Makan" for an Indian teen. Teens in India spend most of their cash on clothing, electronic
goods, and the ever so indispensable cell phone! These categories have become representatives of the
style statement a teens want to portray. Spending on their cell phone has become a necessity!
An Indian boy spends more than the girls in the clothing category. The boys usually prefer branded
items to differentiate themselves whereas the girls have so many different choices, branded clothing
would not be their prime preference.
The spending on cell phone expenses has turned tables. It was the girls who were spending more
than the boys last year; the scene seems to be reversed. The boys spend close to Rs.125 a month as
compared to just Rs.106 by the girls. The girls not to be left behind have their own indulgences, in the
form of beauty aids and entertainment areas. The girls would rather go out with friends and spend on
movies and their cosmetics than stay at home in front of the computer and video games.
The electronics category spending is dominated by the young teens as opposed to the older ones.
The young teens are so fascinated about the technology that at times they are the major influencers in
a high value electronics purchase in the family.
The girls spend more money on entertainment than the guys, a sign of the changing times and a
sign of the different needs prevalent in today's society.
The younger teen out pips the older counterpart when it comes to electronics purchases. It appears
that the technology learning curve, has it been proved. The teen in South splurges his cash much more
on any give category than his counterparts from across the country. Even though the numbers of
teenagers who spend are less, the ones who do spend.

31. Cell Phone usage:
Every second teen in India having a cell-phone just illustrates the power and the necessity of this
device. The increasing capabilities of the cell phone have not limited the teens from using them for
any given purpose, but the primary activity still remains communicating. The texting
phenomenon is more in the older teens where it as much as 1 in 3 teens. Speaking on the phone
with friends is more predominant amongst the boys as compared to the girls.
The cell phone has also turned into an entertainment device. With memory capacity increasing,
advanced cameras coming in, portability with music players and plug and play functionality
available, not to forget the radio and gaming, a cell-phone has become a companion when doing
nothing. In fact watching TV shows, listening to MP3s and radio are even more popular than
sending text messages.
An interesting thing to note would be that cell-phones nowadays are quite restricted in schools and
colleges that the teens go on. So a lot of their activities on the cell-phone are governed by the
circumstances in which they’re allowed to use their cell-phones.

32. Online Spending:
Shopping online considered a luxury for the rich is growing fast and Indian teens could be the next big
target. While 68% of teens shopping online love buying books, it is the practice of shopping for gifts
and flowers that is catching up. The smaller towns have a higher incidence of purchasing books online
as compared to the larger metros. This may be because in big metros the titles are available more easily
in all the big book stores as opposed to the small stores where there are just private libraries.
The teens aren’t spending much on buying movies and music online as compared to the teens in the
West. The ideology of free download and following practice of peer to peer downloading has become a
hit. The teens in the west have spent three times more on purchasing flowers and gifts online as
compared to their counterparts from south. Well, the culture of the west zone can be attributed to this
fact.

33. Media and the youth market:
The TRU Teen Study conducted by Research International shows up some of the
interesting trends in the media market. The internet has just taken the big leap in India and
teens are adopting it faster than any other media.
Internet is becoming popular than any other media as the soul source of information and
entertainment.

35. The Urban Youth:
The urban youth are gadget savvy, fun loving yet responsible with their money. Video
games, mobile phones, color TVs and motorbikes are the hot favorite assets among the
youth.
The mobile phone has also turned into an entertainment device. With the memory capacity
increasing, advanced cameras coming in, portability with music players and plug and play
functionality available, not to forgot the FM radio and gaming, a mobile phone has
become a companion when doing nothing.
A good 1 in 4 Generation Next youth in urban India feels that internet is the main source
of entertainment in their life. With free availability and accessibility of fun downloads,
games, ring-tones, chatting / e mailing, social networking sites etc., internet for teenagers
and young adults is an abode of entertainment where they spend most of their leisure time.
Most of the youth have an ‘I can do it attitude’ with 39% of them stating that they try to
solve a problem all by themselves.
More than half (55%) of the urban youth in India keep a close track of latest trends of
lifestyle, clothing etc. and are conscious of their extrinsic behavior. However, they are not
compulsive shoppers and try to strike a balance between their needs and latest trends.
Although shopping is a favorite activity for 56% of the youth, 21% of them go on a
shopping spree from time to time, while the remaining 79% of the youth claim to go for
need-based shopping.
Understanding Commonalities:
It is absolutely necessary for the marketers to understand that most of the youth in India
are high on aspirations but with low current levels of affordability to be able to live those
aspirations. Moreover, the youth in India is too varied specifically in terms of the urban
and rural divide and the regional divides, and these need to be understood well.
There are commonalities but there are stark differences as well. More than demographic
commonalities it is going to be important for marketers to understand the commonalities
in the attitude, interests and opinions of the youth and thereby influence or impact their
current or aspired lifestyle.