Predictions claim that India is on its way to become the youngest country by 2022, with the average age of 29. The demographics of the country are completely in favour of a rising trend on the graphs, but why is it the other way round in reality then? Millennials or Gen Y refers to people born between 1981 to 1996. This implies the youngest millennial turned 18 in 2014, and probably voted for the BJP government. Millennials constitute more than 25% of the population. Millennials have lived through the phase of liberalisation (1991) and the computer revolution in the 2000s. Gen Z, on the other hand is witnessing the internet revolution.
What makes the generation of millennials different from the others and why is there a need to study their preferences while framing general policies? Let us see.
Firstly, millennials have ushered in the era of digitization. From reading the newspaper in the morning to writing their journal before bed, technology has reduced all of this to a five-inch screen. Having access to unlimited information on the internet has made this generation extremely au courant. There has also been a shift in shopping trends. Heavy discounts and their feasibility has directed Gen Y to online stores.The redundancy of brick and mortar stores has led to owners complaining against Amazon and Flipkart offering extensive discounts and also violating the company policy. Serious efforts are being taken by the government as well as corporates to revive such stores. The major driving force behind this is the change in the behavior pattern of consumers, mostly millennials.
Secondly, the Indian economy is gradually shifting to a ‘sharing economy‘. A sharing economy is an economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the Internet. Most members of this generation believe in renting or sharing things rather than actually owning them. A millennial would prefer to ride in an Uber everyday as opposed to affording a car. Draining a few thousands out of their pocket every month works better than saving up for a SoHo apartment. This might not be the most important factor leading to the slowdown in the automobile industry or realty sector, but is definitely one of the contributors. This does not mean that the amount of expenditure from their end has reduced in any way. Instead, they prefer spending that money on travelling or other activities of leisure. Even workplaces are evolving into a shared ecosystem with co-working spaces becoming popular among youth-led startups.
Since expenditure has been redirected to multiple industries, unconventional, luxurious brands have flourished in the past years. The travel industry has thrived in terms of growth of Airbnbs, inexpensive accommodations, cheap flights etc. According to a survey report titled The Millennial Travel Survey 2017, conducted by Skyscanner India, 62% of Indian millennials—those between the ages of 18 and 35—vacation two to five times a year.
Millennials are also relatively more conscious than pre-millennials. They are more concerned about a healthy lifestyle and general fitness. The Economic Times’ research shows that 36 per cent of Indian millennials have a fitness app installed on their phones. About 45 per cent think leading a healthy life is a priority. About 60 per cent disapprove of smoking and 21 per cent drinking. For this, they do not hesitate to go the extra mile and purchase organic food items. This has also given rise to the use of fitness bands, instead of watches. Recently, a new variant of clothing, athleisure has gained popularity laying the groundwork for brands like Calvin Klein in India. This generation opines climate change as a grave issue and is willing to support campaigns that advocate environmental issues.
A Morgan Stanley report estimates that it will not be long before smartphone ownership increases to cover 100 per cent of Indian millennials. The concept of smartphone addiction doesn’t hold true to this generation. They have used this piece of technology in their favour, which could be online banking, shopping, research or reading for that matter. Their priorities are very well established, and they are constantly working to achieve their goals. Indian millennials are a mix of foreign culture and traditional Indian values. As much as they desire to live independently away from home, they do not abandon the responsibility of looking after their family.
This generation is also huge on investment and saving. They have deviated from the conventional avenues of investment viz fixed deposits, property and gold. They have moved on to health insurance policies or life insurance for investment. Mutual funds have considerably prospered because of change in this outlook.
Nirmala Sitharaman, Finance Minister of India was mocked for her statement blaming the millennials for the automobile industry crisis Although the claim may seem far-fetched, her statement cannot be outrightly denied. This drift might not be as impactful as one could expect, but the proportion of millennials in the workforce is going to rise in the near future. Since they will form a major part of the earning group of the society, their views on expenditure and investment has the power to make or break the economy.