Affordability dictates asset ownership

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Affordability dictates asset ownership

The heterogeneity that characterizes the modern Indian consumer has created a maze that marketeers would like to unravel in order to target their products and services precisely. In this fortnightly series, Indicus Analytics presents the various facets of urban consumers, across geographies and socio-economic groups.

The second largest sub-segment of urban SEC E households is formed by households whose chief wage earner is middle-aged and married with young children. The chief wage earner is an unskilled worker with low levels of education-a majority have completed just primary school.

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With little educational backing, most of the chief wage earners have managed to find work as casual workers; while a little less than one-third have their own businesses, which would include small kiosks, hand carts, etc., essentially in the trade sector. A little over one-quarter of chief wage earners have regular salaried jobs at the lowest level in small businesses or households.

Broadly, the source for livelihood in this category comes from the unorganized sector, with just about 7% working with the government or private sector companies. Those who work in large firms or the public sector would have completed middle school, but again, would be at the lowest rungs of income.

When it comes to sectors of employment, construction and real estate account for jobs to almost half the segment, followed by manufacturing, transport and communication, and agriculture and related activities. The presence of the last category shows low education and skill base restricts employment to primary activities.

Even in metros, there is a minuscule percentage of people involved in cropping, fishing, etc. This sector forms a major source of livelihood in urban areas of districts such as Medinipur, Bellary, Jalgaon, etc.

Households in this category typically consist of four to five members. These are, to a large extent, nuclear families and less than 10% have senior citizens. Around 40% have more than two children, even in the lowest income segments in urban areas. As expected, northern districts show greater tendency for more children; more than 60% of the households have more than two children in six towns—Jodhpur, Bikaner, Aligarh, Bareilly, Bhavnagar and Gwalior.

The spouse of the chief wage earner also has low levels of schooling—less than one-third have made it to middle school. In most households, the spouse is a home maker, taking care of the children. In about one-fifth of the households, the women are also employed outside the homes. Interestingly, in Vellore, Erode, Dharwad and Virudhunagar, more than 40% of the spouses are earning, while Srinagar has the lowest participation of spouses in this category.

In most households, the chief wage earner is the sole earning member and annual household incomes fall predominantly in the lowest income class of less than Rs. 3 lakh a year. Yet, as these earners are settled in their careers and families, more than half the households own houses. A little more than one-third of the households stay in rented houses, while a mere 7% live in employer-provided accommodation. The smaller towns with more affordable real estate prices see higher ownership of houses even among this segment.

When it comes to asset ownership, households in this category clearly go in for two-wheelers as the vehicle of choice, basically for reasons of affordability. Still, the penetration of two-wheelers is low with just 25 % of these households owning a two-wheeler. Even when the need for a four-wheeler is high given the size of family in a typical SEC E middle-year household, ownership of car is this category is rare.

Ownership of refrigerators and microwaves is low while television penetration level is high. This segment is not as net-savvy as the younger SEC E households, and it is television that score

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Affordability dictates asset ownership

  1. 1. Published: Mint dated 25th April, 2011The heterogeneitythat characterizesthe modern Indianconsumer hascreated a mazethat marketerswould like tounravel in order totarget theirproducts andservices precisely.In this fortnightlyseries, IndicusAnalytics willpresent the variousfacets of urbanconsumers, acrossgeographies andsocio-economicgroups Indicus Consumer Data Products
  2. 2. The second largest sub-segment of urban SEC E households is formed byhouseholds whose chief wage earner is middle-aged and married with youngchildren. The chief wage earner is an unskilled worker with low levels of education-amajority have completed just primary school.With little educational backing, most of the chief wage earners have managed to findwork as casual workers; while a little less than one-third have their own businesses,which would include small kiosks, hand carts, etc., essentially in the trade sector. Alittle over one-quarter of chief wage earners have regular salaried jobs at the lowestlevel in small businesses or households.
  3. 3. Broadly, the source for livelihood in this category comes from the unorganizedsector, with just about 7% working with the government or private sector companies.Those who work in large firms or the public sector would have completed middleschool, but again, would be at the lowest rungs of income.When it comes to sectors of employment, construction and real estate account forjobs to almost half the segment, followed by manufacturing, transport andcommunication, and agriculture and related activities. The presence of the lastcategory shows low education and skill base restricts employment to primaryactivities. Even in metros, there is a minuscule percentage of people involved incropping, fishing, etc. This sector forms a major source of livelihood in urban areas ofdistricts such as Medinipur, Bellary, Jalgaon, etc.
  4. 4. Households in this category typically consist offour to five members. These are, to a largeextent, nuclear families and less than 10% havesenior citizens. Around 40% have more than twochildren, even in the lowest income segments inurban areas. As expected, northern districtsshow greater tendency for more children; morethan 60% of the households have more than twochildren in six towns—Jodhpur, Bikaner, Aligarh,Bareilly, Bhavnagar and Gwalior.The spouse of the chief wage earner also haslow levels of schooling—less than one-third havemade it to middle school. In most households,the spouse is a home maker, taking care of thechildren. In about one-fifth of the households, thewomen are also employed outside the homes.Interestingly, in Vellore, Erode, Dharwad andVirudhunagar, more than 40% of the spousesare earning, while Srinagar has the lowestparticipation of spouses in this category.
  5. 5. In most households, the chief wage earner isthe sole earning member and annualhousehold incomes fall predominantly in thelowest income class of less than Rs. 3 lakh ayear. Yet, as these earners are settled in theircareers and families, more than half thehouseholds own houses. A little more than one-third of the households stay in rented houses,while a mere 7% live in employer-providedaccommodation. The smaller towns with moreaffordable real estate prices see higherownership of houses even among thissegment. When it comes to asset ownership,households in this category clearly go in fortwo-wheelers as the vehicle of choice, basicallyfor reasons of affordability. Still, the penetrationof two-wheelers is low with just 25 % of thesehouseholds owning a two-wheeler. Even whenthe need for a four-wheeler is high given thesize of family in a typical SEC E middle-yearhousehold, ownership of car is this category israre.Ownership of refrigerators and microwaves islow while television penetration level is high.This segment is not as net-savvy as theyounger SEC E households, and it is televisionthat scores much higher than all other media;even radio gets one-fourth of the time spent onan average by a household on watching TV.

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