One of four Gen Z are already in the workforce in India and by 2025 every second Gen Z will be earning, as per Snap and Boston Consulting Group’s (BCG) report on Gen Z titled ‘The $2 Trillion Opportunity: How Gen Z is Shaping the New India’.
The report highlighted that with a population of 377 million, Gen Z is now the largest generation ever to live in India. While they are often perceived as teenagers, Gen Z is far from a homogeneous group. Their immense purchasing power and unique perspectives, behaviours demand the attention of businesses and marketers alike.
According to Snap, this expansive research offers new perspectives into Indian Gen Z’s distinctive spending power across multiple categories, that no other report has explored in the past. The report also delves into uncovering unique insights into how they engage, influence, shop, and spend- shaping the future of India’s economy.
Key findings of the report:
A Powerhouse Driving Nearly Half of India’s Total Consumption
As per the report, Gen Z isn’t just influencing the market; they are redefining it. Their collective spending power reaches an impressive $860 billion, constituting 43% of the country’s total consumption.
This dynamic cohort is impacting significant spending across categories such as 50% of total spending on footwear, 48% on dining, 48% on out-of-home entertainment, and 47% on fashion and lifestyle. They are poised to play an increasingly vital role with their spending power projected to reach an astounding $2 trillion by 2035.
Gen Z’s Direct Spending Power to Reach $1.8 Trillion by 2035
One in four Gen Z is already part of the workforce, meaning this generation wields a total spending power of $860 billion. However, the way the spending is distributed shows that currently, out of Gen Z’s total spending power of $860 billion, approximately $200 billion comes from direct spending, money they earn and spend themselves, while $660 billion comes from influenced spending, which includes purchases influenced by their recommendations or preferences.
The report highlighted that by 2035, these figures are expected to change dramatically, with direct spending projected to reach $1.8 trillion, implying that every second rupee of consumer spend in 2035, will be driven by Gen Z.
On average, 70% of Gen Z Rely On Their Inner Circle For Guidance and Love Sharing Updates
The report emphasised that often misunderstood as a detached cohort, Gen Z is deeply rooted in authenticity and meaningful connections. About 70% consider their inner circle- composed of close friends and family- their primary guides – actively sharing details of their day, major concerns in their life and seeking guidance on key choices such as what/where to buy, what content to watch among others. 8 of 10 Gen Zers take inputs from their close friends on what/where to buy in shopping.
With a strong preference for visual content, nearly 80% of Gen Z rely on images, GIFs, and immersive visuals to express themselves and connect with their circle. This group cares deeply about demonstrating their authenticity to those they love, and prefer to express themselves through visual sharing. This strong bond highlights their desire for connection and the importance they place on seeking input from those they trust.
77% of Gen Z’s Desire For Immersive Visual Is Driving Trends Like ‘Shopcializing’
Gen Z cares more about immersive visuals than the generation before them, with 77% of this cohort finding using augmented reality and interactive visuals more engaging, demonstrating a greater need for brands to create immersive content. They are all about “shopcializing” – sharing shopping experiences with their inner circle via photos or video calls.
This “phygital” blend of online and offline shopping is so seamless that one out of two Gen Z are likely on the phone checking wish lists or creator pages online while in-store – far surpassing the 32% of millennials.
When it comes to brands, this youth generation is all about trends, not traditional loyalty. They’re 1.7 times more likely to choose trending styles when shopping over brands, with 72% of Gen Z shoppers turning to creators’ social channels as their go-to for shopping inspiration.
45% of Businesses Recognise Gen Z’s Potential, But Only 15% Take Action
As per the report, despite the undeniable influence of Gen Z in India, there exists a significant disconnect between recognition and action. While 45% of businesses acknowledge Gen Z’s potential, only 15% have actively leveraged these insights- a gap that presents brands with a prime opportunity to forge deeper connections with the generation shaping India’s consumer future.
To capitalise on this opportunity, brands and marketers should focus on five key strategies:
- Rapidly innovate to stay on trend.
- Integrate social interaction throughout the shopping journey.
- Provide visually immersive experiences—online and offline.
- Create seamless omnichannel purchase pathways.
- Engage with the right influencers in the right way.
Commenting on the findings from the report, Pulkit Trivedi, Managing Director, India, Snap, said, “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. In partnership with the Boston Consulting Group we are excited to share deep insights on the economic potential, values and shopping behaviour of GenZ in India. As a platform that serves the Gen Z audience, we look forward to working with brands and businesses to harness this growth potential.”
“Our research evaluated the substantial impact of Gen Z on consumption in India. Gen Z is already driving 43% of India’s consumer spending. Their influence is not limited to select categories – it cuts across categories ranging from fashion, eating out, to automobiles and consumer durables. It is important for marketers to take note that this generation is driven by unique values and beliefs and therefore have distinctive purchase behaviours, however we noticed that only 15% of brands we spoke to are actively taking steps to tap into this opportunity. For businesses, understanding and authentically engaging with GenZ isn’t just good to have; it’s necessary for winning today and will be imperative for survival tomorrow,” Nimisha Jain, Senior Partner and Managing Director at BCG India, said.
