The heterogeneity that characterizes the modern Indian consumer has created a maze that marketers would like to unravel in order to target their products and services precisely.
Household consumption patterns depend on many factors, and the age of the chief wage earner is a key determinant.
The Indicus Indian Urban Consumer Spectrum classifies urban households into three broad categories: younger years, in which the chief wage earner is predominantly less than 34 years of age; middle years, in which the chief wage earner is mainly in the age group of 35 to 54, and mature years, households in which the chief wage earner is usually over the age of 54.
At each life stage, there are different income and consumption patterns; as the chief wage earner moves into the older years, the family structure also changes. So the category of younger years does not necessarily denote younger households; in fact, households in mature years have more than 40% of its population under the age of 18.
Creating consumer segments by the age of the chief wage earner of the household reveals patterns that are otherwise hidden in data. Take for instance occupations—the sector that employs the highest share of chief wage earners in younger and middle years is manufacturing, which takes up a lower share for chief wage earners in mature years. On the other hand, manufacturing falls to second slot for chief wage earners in mature years; and more interestingly, public administration/defence accounts for the third largest share of employment in this segment. This does point to the changing structure of employment over time, and also gives an indication of the income and consumption behaviour of these households.
Then there is the size of the household— households where the chief wage earner is in his younger years are to a large extent small in size; close to 60% are single member households—the earning member in the city is single or married and living away from his family. This is the smallest segment, comprising less than 15% of urban households, and around 5% of urban population.
The largest segment, which accounts for more than 60% of urban households, is those in which chief wage earners are in their mature years; here, a majority have five or more members and almost a quarter have more than two earning members. This, therefore, forms a bulk of urban consumer spends; and, since it includes senior citizens as well as minors, it caters to the needs of all age groups.
The segment in which chief wage earners are in their middle years accounts for more than a quarter of urban households. This segment stands out as the one in which almost all households have minors; this would, therefore, be extremely cued into the needs of growing children—whether it comes to education, food or entertainment, it is in these households that children rule.
The younger years segment feeds into the others as chief wage earners marry, or bring their families to the cities and have children, save to buy houses, two-wheelers, cars and so on, and the maturity of the chief wage earner naturally shows up in higher incomes and asset penetration across the groups.
So while around 90% of the households with chief wage earners in their younger years earn less than `3 lakh a year, this proportion comes down to less than three quarters for the mature years segment.
Again, most households whose chief wage earners are in their mature years live in houses owned by them; on the other hand, households whose chief wage earners are in their younger years, of course, live predominantly in rented accommodation.
In addition, a sizeable proportion of these young chief wage earners live in accommodation that is neither owned nor rented, but provided for by the employer. The Indian urban landscape is changing rapidly—over the past 10 years, the number of towns has risen from 5,161 to 7,935 and urban population has grown 17.6%, much higher than rural growth. It is here, in India’s metros, towns and peri-urban areas, or places adjoining urban centres, areas dotted all across the country, that the aam aadmi’s, or common man’s, aspirations for a better life are fulfilled.