Tracking Young Households

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Published: Mint dated 25th October 2010

Indicus Consumer Data Products

The heterogeneity

that characterizesthe modern Indian

consumer has

created a maze

that marketers

would like to

unravel in order to

target their

products and

services precisely.

In this fortnightly

series, Indicus

Analytics will

present the various

facets of urban

consumers, across

geographies and

socio-economic

groups



Urban consumers have varied socio-economic

profiles, and when it comes to consumption patterns,

the educational and occupational profile of the chief

wage earner matter just as much as his or her life

stage, fam- ily type. The broadest five categories can

therefore be sub-segmented by the life stage of the

chief wage earner to get a deeper understanding of

household profiles. In this piece, we take up the

young- est and most affluent households in urban

India--where the chief wage earner is usually a

graduate, in the age group 25-34 years.

SEC A is the most educated of all categories, and

the young chief wage earners are at the beginning of

their careers.

There is a mix of businessmen and professionals,

while the majority have regu- lar salaried jobs as

executive or manag- ers in companies. These chief

wage earners work in many different sectors, with a

little more than a third taking up education, health andsocial work-relat- ed careers. These include those who

are self-employed, professionals or in salaried jobs--

not just professors, school teachers and doctors but

also chartered accountants, lawyers, masters of busi-

ness administration (MBAs), architects and engineers-

-all of whom find a role to play in social work.

The booming real estate industry has alsoabsorbed many from this segment, while

manufacturing companies and government jobs are

the next two sectors offering maximum em-

ployment to these well-educated young people.

If you look at the income distribution, a large

majority fall in the lowest brack- et, earning less

than `300,000 a year. But remember that these aresmall households, usually one or two members,

and the picture changes. There are many already

earning more than `1,500,000 a year and these

households are spread all across the country.

When it comes to ex- penditure in this income

segment, Mumbai and Delhi lead, with cities such

as Nagpur, Vadodara, Patna, Lucknow, Indore and

Surat ranking among the top 20 largest markets.



As these are young households, around a little more than half of

the chief wage earners are married, but do not have children yet.

Household sizes are, therefore, small. In fact, more than a third

of these young rich households are one-member householdsand anoth- er one-third constitute two-member households,

usually couples. These fam- ilies will grow as the chief wage

earner gets married and has children. These households will

move into the next life stage, more settled in life, commanding

much higher incomes and more diverse consumption patterns.

However, already, these young households have done quite

well for them- selves; almost a third live in houses they own andare moving up in life purchas- ing consumer durables. To give

just one example, on an average, across India, 4% of these

households have bought an LCD/plasma TV, and apart from the

metros, there is higher than average penetration even in cities

such as Amrit- sar, Jabalpur and Visakhapatnam.

This is a small segment but irrespec- tive of where they live,

young people are bound by the same aspirational values, andwith assured incomes and easy pur- chase schemes, gizmos

and gadgets are among the first items to be picked up.

The higher aspirations show up not just in durables but in food

patterns, eating out and in modes of entertain- ment as well.

Whatever they have, they are in the market for an upgrade.

Tracking Young Households

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