insightyoung : Introducing india


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a comprehensive data oriented document of youth (15 to 25years) insights in India. please mail me if you require a copy of this report. ( see more at

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insightyoung : Introducing india

  1. 1. Introducing India…
  2. 2. Since early 1990s, India has witnessed great social, political and cultural change. As the world’slargest 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 domesticproduct passed the trillion dollar mark. This is the first time in history that it has been valued sohigh. But, the most interesting fact is that it will pass the next trillion-dollar mark in nine years atmost- by 2016 at the latest. And the composition of that second trillion dollar market will be verydifferent from that of the first.The findings from the latest study, The Bird of Gold- The Raise of India’s Consumer Marketpublished by the McKinsey Global Institute (MGI), reveal that if India continues on its current highgrowth 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 largestconsumer market today to become the world’s fifth largest market by 2025. As Indian incomesraise, over 291 million people will move from desperate poverty to a more sustainable life, andIndia’s middle class will swell by over ten times from it’s current size of 50 million to 583 millionpeople. By 2025, over 23 million Indians- more than the population of Australia today- willnumber among the country’s wealthiest citizens. While much of this new wealth andconsumption will be created in urban areas, rural income growth will benefit too. Forecast forIndia’s real GDP growth rate over the coming two decades generally range between 6 to 9 per centper year. MGI forecasts real compound annual growth of 7.3 percent from 2005-2025, amarked acceleration from the 6 per cent growth of the previous two decades. In this growthrate, average real household disposable income will grow from 113,744 Indian rupees in 2005to 318,896 Indian rupees by 2025, a compound annual growth rate of 5.3 per cent. This issignificantly more rapid than the 3.6 per cent annual growth of the last two decades with theexception of China, and much quicker than income growth in other major markets. Forexample, US average real household income increased at a compound annual growth rate of1.5 per cent over the past two decades; for Japan the figure was 0.25 per cent. Rising incomewill create a 583 million-strong middle class. India’s raising real incomes have already had asignificant impact on poverty reduction. In 1985, 93 per cent of the population had an annual household income of less than 90,000 Indianrupees, or less than $1,970 per year or $5.40 per day- an income bracket categorized as deprived. By2005, this had dropped by about two-fifths to 54 per cent of the population, with the biggest falloccurring since 1995. Thus more than 103 million people moved out of desperate poverty in thecourse of one generation. This is all more impressive given that India’s population grew by 352million during this period. MGI’s forecast shows that overall economic growth will continue tobenefit India’s poorest citizens and that the deprived segment will further drop from 54 per cent ofthe population in 2005 to 22 per cent by 2025. India will become the fifth largest consumer marketby 2025. The aggregate consumption in India will grow in real terms from 17 trillion Indian rupeestoday 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 isits continued population growth. India’s strength has always been in numbers and today it is thesecond only to China in this respect. However, China’s strict adoption of a one-child policy meansthat India’s population is growing significantly faster by comparison.
  3. 3. According to UN projections, India will overtake China to become most populous country inthe world by 2030. The rapid population growth will give India a youthful demographicprofile as its dependency ratio (the ratio of children and elderly to income earners) dropfrom 60 today to 48 by 2025. This signifies a rapidly growing labour force and quicklyexpanding consumer base.Between 2010-2030, India will add 241 Million people in working-age population (and thatmeans 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 thedrawbacks that India has, this particular Indian aspect is going to prove pivotal in making India theworld leader in coming years.The demographic outlook for the BRIC countries (Brazil, Russia, India and China) could hardlybe more different. In terms of the demographic transition model, India is at the beginning ofstage three (declining fertility, population growth), Brazil and China are at stage four (lowmortality and fertility, population trending towards stability), while Russia is already atstage five (sub-replacement-rate fertility, declining population). Not surprisingly, thedifferences in the projected change in the working-age population the economically relevantvariable 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. Thiswill impact not only economic growth prospects, but also savings and investment behavior andpotentially if somewhat difficult to quantify financial market growth prospects.India is demographically in a substantially more favorable position than China and Russia.Brazil’sdemographic window (defined here, non-technically, as a falling dependency ratio) will closearound 2020-25, while in China and Russia it is closing right now. India, by contrast, will enjoya very favorable demographic momentum for another three decades. So even though incurrent scenario, India may not exactly be mentioned in the same breath as US, UK and China, thepicture in next couple of decades will be quite different.
  4. 4. Under current economic scenario, 2039 would have a world very different fromthe one we see today. It would be significantly wealthier, with per capitaincomes 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 21percent of global activity, but by 2039 could account for more than half. Threegiant economies, China, India and Japan, would lead Asia’s resurgence.
  5. 5. Internet and Mobile Phone:The Indian Internet SpaceAs user engagement grows with it, Internet will grow faster than all other media. In IndiaInternet can be viewed as a funnel. At the top level is the universe of urban population; itoffers tremendous Internet growth in urban India. Every 10th individual in urban India hasaccessed the Internet. However, Internet is also a function of many other variables, chief amongst them is a basiclevel of familiarity with English, to make meaningful usage of the Internet and alsofamiliarity with the common access device, the PC. In India almost three fourth of all English speaking language populations now PCliterate but of these only 55% have experienced the Internet. Thus there exists animmediate potential for Internet converts amongst existing PC users. After reaching the outer limit of growth amongst the English speakers, the next challengewould be to reach out to the non-English speaking population. IRMB International andInternet and Mobile Association of India(IAMAI) estimates that as of September 2006 therewere 38 million ever users (who have used the Internet at any point in time) in India. Theseinclude one million ever users from rural India.
  6. 6. According to the Juxt India Online 2009 Study, internet in India is still at its nascent stage withclose to a 47 million user base and a user penetration level of 4.2%. The penetration is verylow, 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 andlikely 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 accessdevice 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 100household own a desktop/ laptop 2. Amongst enterprises, desktop/ laptop penetration is much higher (41%), however only18 people in 100 own a broadband connection 3. None of the 51mn 3G-enabled mobile phones are being utilized for broadband usage.Growth TrendsThe total base of internet users in India in January 2009 stands a 46.49 million. Of thistotal 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 theoverall internet using population in urban India grew by 33% during 2007-2008 to reach 40.34million, then it has shown a marginal shrinkage of 3% in 2008-2009 touching only 39 all India level, there is a more noticeable shrinkage in internet user base number of 6%, from49.4% 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 thenumbers of occasional users, both in the urban and rural areas. Some of this decline inoccasional users is expected as a section of the occasional users are likely to graduate toregular usage. However, the fact that very few new occasional users have got added in the lastone year is undeniable and that some of the existing occasional users may have lapsed is quitepossible. The possibility of lapse of some occasional users gets strengthened further by thefact that the base of the regular internet users (urban and rural) has increased by only3.5million 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 onspecific demographics. Users between the age of 18-35 are the biggest segment in Indiaaccounting for 50% of all users on the Internet.This has been aided by the traditional focus of Internet content providers on youth centricapplications. Like their peers in other countries, Indian youth are also more inclined to adopttechnology 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 schoolchildren and are planning to come up with women specific content in the near future.
  7. 7. PenetrationThough the users base of occasional internet users has shrunk significantly and the users baseof regular internet users has grown only moderately, the users base of the most active sectionof internet users-the daily internet users -has grown quite steadily (by 15%) to now touch the32.4 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 ofregular online Indians are on the net daily.The Internet ever user base has doubled over 2004. The number of PC literates is growingsteadily over the years and has grown by 270% over 2000! The growth of ever users andactive users ( who have used the Internet once in the last month) has been even moreimpressive with 540% and 950% growth respectively over 2000. ‘Ever’ users as a proportion of PC literates have been constant over the years at about30%, except last year when it grew to become 54%. Thus every second PC users in Indiahas now experienced the Internet at any point in time; this has now created a criticalmass for rapid growth. The trend of active users as a proportion of ever users has grown from 40% in 2000, to thecurrent proportion of 66%. This is a clear demonstration that Internet is not merely trials butseveral users continue to actively use it. Father, the growth in the daily users’ base has been more remarkable among the rural usersat 25% than among the urban users (14%) Among the 32.4 million internet users, 28.1 million, or the bulk 87% of them, stillcome from the urban areas. Rural areas account for only 4.3 million (or 13%) of the totaldaily internet users base. Further, within the total base of 46.49 million online Indians, 38.5 million, or 83% are regularinternet users. The balance 7.92 million online Indians, or 17% of them are occasional usersof the net. Within the base of 39 million urban online Indians, 33.15 million, or 85% of them are regularinternet users. In contrast, the number of regular internet users in rural India stands at 5.42million ,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 regularor 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)
  8. 8. In terms of penetration of internet usage among the total population in India, the numberstands at 4.2% at the all India level .The penetration levels within the urban and rural populationstand at 11.4% and 1.0% respectively. Compared to last year, the penetrations in both the urbanand rural areas have declined marginally. While only 13%of the Indian population have graduate or graduate plus educationlevels, 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%, studentsconstitute the single largest occupational group among internet users. Among theemployed,85% are salaried employees while the balance 15% are self employed orbusiness owners. In the line with the employment profile, about 41% of the regular internet users are head ofhousehold (+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 therural online Indians. However, 57% of the regular internet users have claimed MHI of less than Rs. 25,000. Thismeans that at least two out of three regular online Indians have below the online Indiansaverage MHI.Internet trials are increasing in the small and non-metros as more users log on and feelconfident 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 asmass media and word of mouth promote Internet. The top eight metros which have been thetraditional early adapters continue to be the biggest contributors to the Internet population inIndia. However the proportion has come down significantly over 2001 and should go down even moreover 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 pointsbecomes 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 to2.9 million in the period of 1997- 2006. More PC owners are now opting for the Internetexperience at home; from a mere 9% in 97-98, the proportion of users who own an Internetconnection has come up to 76% of the total PC owning base.
  9. 9. This growth in Internet adoption can be attributed to faster and cheaper access options drivenby broadband technology. Internet and Mobile Association of India (IAMAI) and IMRBInternational estimate that this proportion should grow further with added growth coming infrom 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 townswhich are contributing to the Internet revolution in India; it is also being driven by the lessaffluent sections of the society. It is not just the smaller towns which are contributing to theInternet revolution in India; it is also being driven by the less affluent section of the society, thelower socio-economic classes. It has taken a combined effort of Internet stakeholders to reducethe initial inertia and promote this interaction. Firstly mass media has helped in creating more awareness for the internet, especially as toolfor 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 applicationsside, 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) initiativesbear fruition; usage amongst lower SECs should increase phenomenally in the next two to threeyears 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:
  10. 10. Internet exclusive: e-mail, chat/IM, and VoLP.Communication is the core benefit which initiates users into the Internet category andcontinues 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; thusInternet directly competes with other media and needs to offer strong differentiation buildingup 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 anadvantage over other media, these need to be used as hooks to compete against traditionalmedia.
  11. 11. The futureThe biggest barriers to the growth of number of users and connections are driven byperceived high cost and low awareness. However, with cost of enablers and home accessreducing, there would be a shift in this perception in the near future. To tackle awarenessissues, 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 bycustomization of content to suit the tastes and needs of those who would be drawn to use theInternet.Mobile phone / Wireless ServicesThe E&Y-CII report in India 2012: Telecom Growth Continues says Indias wireless basedincreased 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 inthe growing share of the total telecom base . From just 5% of the countrys telecom base of32 million in March 2006, in increased to 87% of the 300 million telecom subscribers inmarch 2008. By end 2012 there are expected to be about 640 -650 million wirelesssubscribers, accounting for about 90% of the total telecom base. By then , wirelesspenetration 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 tenwireless markets.
  12. 12. Emerging areas of GrowthThe net wireless addition in circle C has begun to exceed metropolitan cities. In the first nine monthof 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 onanalysis, Circle C will garner approximately 102 million subscribers and will exceed metros, whichwill have approximately 62 million subscribers. As per the 2009 TRAI report on the Indian Telecom Services Performance Indicators, theoverall rate of growth of wireless subscription in the QE June 2009 (9.1%)was lower as comparedto the previous quarter(12.9%). Higher growth rate in the previous quarter was mainly on accountof launch of GSM services by Reliance Communications Ltd. The total wireless Global System for Mobile Communications (GSM) and Code DivisionMultiple Access (CDMA) subscriber base increased from 391.76million in March 2009 to 427.29million at the June 2009, thereby showing a growth of 9.07%. During this quarter 35.53 millionsubscribers are added. Wireless Tele-density increased from 33.71 in March 2009 to 36.64 at theend of June 2009. The rural wireless subscribers increased from 111.63 million in March 209 to125.95 million in June 2009. Rural subscription (12.8%) has been growing at a faster rate thanurban (7.6%) subscription. The share of rural wireless subscription is 29.5% in the total wirelesssubscription.
  13. 13. GSM ServicesAt the end of June 2009,GSM subscribers constituted 77% of the wireless market. theGSM subscribers wereb328.83 million at the QE June as against 297.26 million at theend of the previous quarter, showing a growth of 10.62%. Bharti with 102.37 millionsubscribers continues to be the largest GSM mobile operator followed by Vodafone(76.45 million), BSNL(54.36 million), and Idea (47.09 million).CDMA ServicesThe CDMA subscriber base increased to 98.46 million during the QE June 2009 from94.49 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 mobileoperator with 54.19 million subscribers, followed by Tata Tele Services(37.12 million)and BSNL (5.27million).GSM vs CDMAThe GSM subscription has been growing at a faster and the ratio between the growthrates of GSM and CDMA has also been increasing. In the QE June 2009, the growthrate of GSM was 2.53 times the growth rate of CDMA, as against 2.29 in the previousquarter.The ProspectsThe 2009 Netscribes Mobile Value-Added Services report says the total numberof 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 thisyear 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 by2012. The tele-density of the country is projected to go up from 26.2% in March2008 to 50% by the end of the fiscal year 2009-10.
  14. 14. 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 116Source: Government of India, Economic Survey 2005-06, quoting Office of the Registrar General of India
  15. 15. 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 46.0Note: Percentages are to the total and to the youth population of the region.Source: Source: Draft Youth in India Report, RGNIYD, 2007
  16. 16. 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 stabilitysomewhat later, mainly in their 20s, one may take the young between 13-24 years mostlyrepresenting the Generation Next and the young who are 25 years or more as part ofGeneration Now.If by and large generation next does not have any great ability to independently fund theirconsumption preferences and decisions, should marketers look at them as a consumergroup at all? The answer is ‘Yes, by all means’ due to three significant reasons, viz. 1) evenas dependent members of their families these Indian youth represent a sizeable pie ofdiscretionary ‘individual’ level consumption within the household; 2) they seem to have a lotof influence and say even at the ‘household ‘ level consumption, especially in case ofproducts and services which fall i the modern technology and lifestyle domain; 3) mostimportantly, they represent the market of ‘tomorrow’ and marketers who do not engagethem would do so at the cost of their own future market prospects.With their own earnings and financial independence in the future, most Generation Nextyouth will ultimately grow up to be the prime targeted consumers of tomorrow- theGeneration Now of tomorrow.
  17. 17. 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.
  18. 18. 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”
  19. 19. The most preferred way of spending time is with parents and friends.
  20. 20. AVERAGE SPENDS OF YOUTH WEEKLY: According to the TRU Teen study conducted by Research International, pre-teens and teenagersunderstand money fairly well in todays time. Parents are the leading source of income forGeneration Next. Majority of them get money from their parents when they need it. There is astriking difference between a young Indian in 2009 from what it was in 1991. Teens today areearning 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 teenspending. The average urban teen in India spends close to Rs. 132(approx. US$ 3) a week whichis lower as compared to last year rs. 200( US$ 4-5). But the number of teens spending nothing in the previous weeks time has come down from 13% to 8% this year. Todays youth is on the fast track to success with aspirations soaring high. Their look out for parttime and odd jobs has increased and the need to Arrive in the society has become of primalimportance. No wonder close to 30% of the teens want to achieve financial independence evenbefore they are out of their teens. As youth grow older, their tendency to spend more also increases. It’s a branded world outthere and the demands just keep increasing. Of all the teens, the teens in the west zone are whothe marketers would love; they are the highest average weekly spenders. East zone teens turn outto be very conservative in their spending patterns. There is also a significant difference in theway 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 asit may seem. The projection of teens spending same or more as compared to last year is awhopping 72% as compared to the 55% found in the previous wave. Optimism andconsumer power are doing the trick for Indian teens unlike teens in the West where theyhave been struck hard with the ongoing recession.
  21. 21. SPENDS ON KEY CATEGORIES:According to the TRU teen study conducted by Research International, Kapda. Ipod, and Cellphone, 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, electronicgoods, and the ever so indispensable cell phone! These categories have become representatives of thestyle 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 brandeditems to differentiate themselves whereas the girls have so many different choices, branded clothingwould not be their prime preference. The spending on cell phone expenses has turned tables. It was the girls who were spending morethan the boys last year; the scene seems to be reversed. The boys spend close to Rs.125 a month ascompared to just Rs.106 by the girls. The girls not to be left behind have their own indulgences, in theform of beauty aids and entertainment areas. The girls would rather go out with friends and spend onmovies 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 ina high value electronics purchase in the family. The girls spend more money on entertainment than the guys, a sign of the changing times and asign of the different needs prevalent in todays society. The younger teen out pips the older counterpart when it comes to electronics purchases. It appearsthat the technology learning curve, has it been proved. The teen in South splurges his cash much moreon any give category than his counterparts from across the country. Even though the numbers ofteenagers who spend are less, the ones who do spend.
  22. 22. Cell Phone usage:Every second teen in India having a cell-phone just illustrates the power and the necessity of thisdevice. The increasing capabilities of the cell phone have not limited the teens from using them forany given purpose, but the primary activity still remains communicating. The textingphenomenon is more in the older teens where it as much as 1 in 3 teens. Speaking on the phonewith 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 functionalityavailable, not to forget the radio and gaming, a cell-phone has become a companion when doingnothing. In fact watching TV shows, listening to MP3s and radio are even more popular thansending text messages.An interesting thing to note would be that cell-phones nowadays are quite restricted in schools andcolleges that the teens go on. So a lot of their activities on the cell-phone are governed by thecircumstances in which they’re allowed to use their cell-phones.
  23. 23. Online Spending:Shopping online considered a luxury for the rich is growing fast and Indian teens could be the next bigtarget. While 68% of teens shopping online love buying books, it is the practice of shopping for giftsand flowers that is catching up. The smaller towns have a higher incidence of purchasing books onlineas compared to the larger metros. This may be because in big metros the titles are available more easilyin 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 theWest. The ideology of free download and following practice of peer to peer downloading has become ahit. The teens in the west have spent three times more on purchasing flowers and gifts online ascompared to their counterparts from south. Well, the culture of the west zone can be attributed to thisfact.
  24. 24. Media and the youth market:The TRU Teen Study conducted by Research International shows up some of theinteresting trends in the media market. The internet has just taken the big leap in India andteens are adopting it faster than any other media.Internet is becoming popular than any other media as the soul source of information andentertainment.
  25. 25. The Urban Youth:The urban youth are gadget savvy, fun loving yet responsible with their money. Videogames, mobile phones, color TVs and motorbikes are the hot favorite assets among theyouth.The mobile phone has also turned into an entertainment device. With the memory capacityincreasing, advanced cameras coming in, portability with music players and plug and playfunctionality available, not to forgot the FM radio and gaming, a mobile phone hasbecome a companion when doing nothing.A good 1 in 4 Generation Next youth in urban India feels that internet is the main sourceof entertainment in their life. With free availability and accessibility of fun downloads,games, ring-tones, chatting / e mailing, social networking sites etc., internet for teenagersand 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 tosolve a problem all by themselves.More than half (55%) of the urban youth in India keep a close track of latest trends oflifestyle, clothing etc. and are conscious of their extrinsic behavior. However, they are notcompulsive 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 ashopping spree from time to time, while the remaining 79% of the youth claim to go forneed-based shopping.Understanding Commonalities:It is absolutely necessary for the marketers to understand that most of the youth in Indiaare high on aspirations but with low current levels of affordability to be able to live thoseaspirations. Moreover, the youth in India is too varied specifically in terms of the urbanand 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 demographiccommonalities it is going to be important for marketers to understand the commonalitiesin the attitude, interests and opinions of the youth and thereby influence or impact theircurrent or aspired lifestyle.