Indian Youth as Consumers: “Gen Next” vis-à-vis “Gen Now”

Our guest author dissects the interplay of desires and financial constraints within the consumer behaviour of 'Gen Next' and 'Gen Now.'

The term ‘Youth’ is very loosely defined and used in India. While some interpret youth to represent age groups 13-24, others club them between 19-30, and may even go to the extent of broad-basing them between 19-35 years.

However, from a consumption and marketing perspective, one needs to have a more clearly defined understanding of the term ‘youth’, especially since in marketing the ability to ‘independently fund’ a consumption decision is as important as to make an ‘independent consumption decision’.

It is imperative in marketing, therefore, that one differentiates between the youth who are capable of making 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 segment them into those 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 the next few years (‘Generation Next’).

In the Indian context, where young people usually attain financial independence and stability somewhat later, mainly in their 20’s, one may broadly take the young between 13-24 years as mostly representing ‘Gen Next’, and the young who are between 25-34 years as part of ‘Gen Now’.

For those who are more familiar with the in-trend but static age group classification of ‘Millennials’ and ‘Gen Z’, these two age groups will only broadly overlap with the more organic, dynamic and ever-lasting concept of grouping youth as ‘Gen Now’ and ‘Gen Next’.

So, ‘Millennials’ (those born between 1980- 1994) would as of now fall in age groups 28-42 years and would broadly overlap with the ‘Gen Now’ youth, and ‘Gen Z’ (those born between 1995-2012) would as of now fall in the age groups 10-27 years and would broadly overlap with the ‘Gen Next’.

Should marketers focus on ‘Gen Next’ at all?

A valid question here could be that if by and large ‘Gen Next’ do not have any great ability to independently fund their consumption preferences and decisions, should marketers look at them as a consumer group?

Yes, they should by all means, and for 3 significant reasons: 

1. Even as dependent members of their families these Indian youth represent a sizable pie of discretionary ‘individual’ level consumption within the household. 

2. They seem to have a lot of influence and say in the ‘household’ level consumption, especially in the case of products and services which fall in the modern technology and lifestyles domains. 3) Most importantly, they represent the market of ‘tomorrow’ and marketers who do not engage with them would do so at the cost of their own future market prospects.

3. With their own earnings and financial independence in the future, most ‘Gen Next’ youth will ultimately grow up to be the ‘prime’ targeted consumers of tomorrow – the ‘Gen Now’ of tomorrow.

Size of ‘Gen Next’ and ‘Gen Now’ in India

In terms of sheer size, at about 25% of the current assumed Indian population of 1.4 billion (age-wise proportions based on 2011 Census of India Data), ‘Gen Next’ youth are likely to be almost 350 million individuals. Also, at about 16% of the total Indian population, the self-earning “Gen Now” youth segment sizes up at about 225 million.

It needs to be remembered here that just like ‘Youth’ is not a single homogeneous consumer group, ‘Gen Next’ is also not. In fact, ‘Gen Next’ is an amalgamation of two behaviorally distinct age groups, 13- 18 years old or ‘Teenagers’ and 19-24 years old or ‘Young Adults’. In terms of their population size, while Teenagers account for approximately 60% of the Gen Next population (about 210 million), Young Adults account for the balance 40% (about 140 million).

Nevertheless, here it is also important to understand that 2 out of 3 ‘Gen Next’ Indian youth come from rural India, reinstating the fact that the ‘real future of India lives in its villages’ and it is rural India where the demand would surge for marketers in the medium-to-long-term.

However, in trying to tap the rural youth, marketers need to be careful about how they reach out and communicate with them, as the education levels of Gen Next living in rural areas are quite low with 80% of them educated up to only higher secondary/senior secondary school level. In comparison, almost 40% of Gen Next living in urban areas are either a graduate or a postgraduate.

A peek into the ‘Urban Gen Next’ youth psyche

The urban Gen Next youth are quite gadget-savvy and come from much higher-level income and consumption expenditure families. Mobile phones are their key go-to device and the Internet their main source of information and entertainment. In fact, Mobile phones are their closest companion when they are doing nothing.

As per some online studies done on their attitude and lifestyle, Gen Next youth have been found to love their freedom, and are fairly outgoing in nature. They reflect a high level of self-confidence in trying to solve their problems by themselves and manifest an ‘I can do it’ attitude.

Unlike yesteryears, when purchases for their consumption and usage were often a household decision, today’s Gen Next believes in their own judgement and preferences, and are not likely to be influenced against their will easily.

A majority of them prefer to keep a close track of the latest lifestyle trends and are conscious of their extrinsic behaviour. Though Gen Next youth claim that they are not compulsive shoppers and are able to strike a balance between their needs and the latest trends when they go shopping, a lot of consumer studies that have tracked their purchase and consumption decisions and behaviour have found that they often struggle to control their urges and can be fairly ‘impulsive’ in their shopping behaviour.

Conclusion

It is important for marketers to understand that most Gen Next in India are high on aspirations but with low current levels of affordability to be able to live those aspirations.

Moreover, a significant proportion of them still live in small towns and rural areas and may show quite ‘distinct’ demographic profiles, consumption behaviour and buying abilities as compared to their urban counterparts.

In such a scenario it might be worthwhile for the marketers to focus more on the commonalities in the attitude, interests and aspirations of the Gen Next, rather than only on their demographic attributes, and thereby aim to trigger or influence them on their aspired lifestyles.

Only then the marketers will be able to reap the true ‘consumer potential’ of these youth in the future when they go on to become the ‘Gen Now’ a few years down the line.

(Our guest author is Sanjay Tiwari, a branding and marketing communication advisor.)