Gen Z to drive $2 Trillion in Indian consumer spending by 2035

A new report released on October 16, 2024 reveals the substantial economic impact of Generation Z in India. The study, titled "The $2 Trillion Opportunity: How Gen Z is Shaping the New India", was conducted jointly by Snap Inc. and Boston Consulting Group (BCG).

According to the report, India's Gen Z population, comprising those born between 1997 and 2012, numbers 377 million - more than the entire population of the United States. This cohort is already driving $860 billion in consumer spending across various categories, accounting for 43% of India's total consumption. By 2035, Gen Z-driven spending is projected to reach $2 trillion, meaning every second rupee spent in India will come from a Gen Z consumer.

Key findings from the report include:

• One in four Gen Z individuals are already part of the workforce. By 2035, this is expected to increase to nearly one in two.
• Gen Z's direct spending, from their own earnings, is set to surge from $200 billion currently to $1.8 trillion by 2035.
• Gen Z influences significant spending across categories - 50% of footwear purchases, 48% of dining out, 48% of out-of-home entertainment, and 47% of fashion and lifestyle spending.
• 70% of Gen Z rely heavily on their "inner circle" of close friends and family for guidance on purchases and other decisions.
• 77% of Gen Z find augmented reality and interactive visuals more engaging compared to previous generations.

The study also highlights unique shopping behaviors of Gen Z:

1. Trend-focused: Gen Z is 1.7 times more likely to prioritize trends over brands when shopping.
2. Visually driven: Nearly 80% rely on images, GIFs, and immersive visuals for communication.
3. "Shopcializing": 64% share shopping experiences with friends through photos or video calls.
4. Omnichannel approach: 54% are likely to be on their phones checking wishlists or creator pages while shopping in-store.
5. Creator influence: 72% turn to creators' social channels for shopping inspiration.

Despite Gen Z's growing influence, the report found a significant gap in how businesses are responding. While 45% of surveyed brands recognize Gen Z's potential, only 15% are actively taking steps to engage this demographic.

Pulkit Trivedi, Managing Director of Snap Inc. India, stated: "India is a young nation with a 377 million Gen Z population which will shape the future of India's growth in the next two decades. Gen Z will be the biggest contributor to India's consumption growth driving $1.8 Trillion worth of direct spend by the year 2035."

Nimisha Jain, Senior Partner and Managing Director at BCG India, added: "For businesses, understanding and authentically engaging with Gen Z isn't just good to have; it's necessary for winning today and will be imperative for survival tomorrow."

The report recommends five key strategies for brands to effectively engage Gen Z:

1. Rapidly innovate to stay on trend
2. Integrate social interaction throughout the shopping journey
3. Provide visually immersive experiences both online and offline
4. Create seamless omnichannel purchase pathways
5. Engage with the right influencers in the right way

This comprehensive study, based on surveys of 1,000 parents and 1,200 Gen Z and millennial respondents, provides valuable insights for businesses looking to tap into the growing economic power of India's largest generation.

Key Facts

• Gen Z population in India: 377 million
• Current Gen Z-driven consumer spending: $860 billion
• Projected Gen Z-driven spending by 2035: $2 trillion
• Percentage of Gen Z in workforce: 25% (current), 47% (by 2035)
• Percentage of brands actively targeting Gen Z: 15%