Gen Z reshaping how India spends and strategises

India's consumption economy is undergoing a generational shift, driven by its youngest population group – Gen Z. This cohort, comprising those born between 1997 and 2012, already accounts for 43% of the country's consumption spending, totaling around $860 billion. By 2035, this spending is projected to double, reaching $2 trillion, or roughly half of India's total consumption spending.

However, the most striking aspect of Gen Z's impact is not just the sheer amount they spend, but how they spend. Gen Z is more inclined towards non-food spending, with categories like conveyance and durable goods now constituting a larger share of their household budgets. This is a significant shift from the past, when food and basic necessities dominated consumption expenditure.

Moreover, Gen Z is also becoming more entrepreneurial and technology-savvy. Nearly half of India's mutual fund assets are held by those aged under 30, and this demographic is increasingly investing in the stock market. They are also early adopters of new payment methods, preferring UPI and debit cards over credit cards. This inclination towards quick decisions and digital payments is influencing car showrooms as well, with younger professionals and tech entrepreneurs increasingly opting for luxury brands like BMW.