Last week I met a low income consumer called Suraiya Khatun. Her family of three has a household income of Rs 8,000 per month. The family lives in a single room which doubles up for a bedroom, kitchen as well as living area. They use a discount soap and an unbranded detergent powder.
Alka on the other hand uses one of the most expensive brands of shampoo. And of skin care as well. While she buys a sachet for her use, she aspires to buy the bigger bottle and jar. Alka is sixteen and has studied upto class ten. Alka represents two of the three biggest demographic shifts that India has been witnessing; younger consumers in smaller households. The third shift is the concept of several India due to regional differences in economic growth.
A younger, more literate India is driving the growth of consumption in India. The NCAER-CMCR youth readership survey estimates that of the 459 million youth in 2009, 333 million are literate. While the average youth stops studying at just 15, even this level of literacy has a material impact because the income of the household rises by a whopping 63 per cent after a matriculation degree when compared to an illiterate household.
Everybody recognises that these younger, more affluent consumers have a fundamentally different attitude to consumption compared to their parents. They are after all the ones who are early adopters of most categories. But they are puzzling as well. So while they are the ones who like Alka Goel, buy expensive brands in some categories the same Alka Goel also buys cheaper brands in other categories. What explains this puzzle? Indian youth today use consumption and brands as a way of signalling their identity. Brands that are aspirational are therefore most valued. Read More