The ever-changing socio-cultural phenomena in India is transforming the way its citizens are are prioritising their time and spending habits. This has been the result of a convergence of trends – the shift towards nuclear families, economic growth, the emergence of the millennial generation, and the ubiquity of the internet.
Unlike the previous generation, which was one of prudence, millennials in India today don’t just believe in the concept of making ends meet and balancing family responsibilities. The changing social fabric of the country has opened up a third option for young India – leisure. This has, over time, become an essential component of their lifestyle, thus breaking away from the traditional status quo of the Indian household.
The disintegration of the joint family system and the emergence of the nuclear family has brought about a radical change, not only in the mindsets of people, but also in their purchasing power. The proportion of nuclear households, which has been on the rise over the past two decades, has reached 70%, and is projected to increase to 74% by 2025. This ongoing shift is significant as nuclear families will be spending 20% to 30% more per capita than joint families would. The tendency to live in smaller clusters pan-India has allowed couples and their children to lead more flexible lives with the ability to allocate time dedicated to their own leisure. This trend is accompanied by another significant development - a ‘millennial mindset’.
Millennials are redefining their consumption story with an increasing number in the working age population. They are the chief wage earners in India with a 47% share in the working age population. Being the largest group in India as well as globally, millennials are characterised by high levels of disposable income and digitally connected individuals. Thus they drive various consumer segments towards rapid growth and development.
Today, the younger generation in India has a relative advantage. They are liberated from the stringent work/family axis, and have found ways to prioritise their own leisure. While the most of their monthly income continues to be spent on essentials, education and utilities, an increasing proportion is dedicated towards leisure activities – entertainment and eating out (32.7%), apparel and accessories (21.4%) and electronics (11.2%). In the last six years, the number of millennials driving a car has grown by 22.7% and in 2016, 27% of car buyers were millennials.
The emergence of ‘leisure consciousness’ in young India is evident in the way purchasing pattern is driving growth in the consumer goods (FMCG) sector, making it the fourth largest sector in the Indian economy.
Millennials are leading a balanced lifestyle, with more time being dedicated to their own leisure, which is critical to their overall well-being. They are also increasingly leveraging their financial resources for the same. This is probably why the personal e-loan space has shown a substantial growth, from Rs 9,924 billion as on March 31st, 2017 to Rs 19,085 billion on March 30, 2018.
About 62% of millennials go on a vacation two to five times a year. Another 10% travel six to 10 times a year, in a combination of shorter breaks to domestic destinations and longer international holidays. To make sure that they fulfil their holiday aspirations, more and more millennials are opting for travel loans. The travel loan category has grown significantly in the last couple of years, accounting for 12% to 20% of their total lending portfolio.
From using loyalty programs to taking up personal loans from fin-tech firms and peer-to-peer lending, millennials are financing their trips in many ways. Those within the age group of 25-35 take up loans between Rs 1 lakh to Rs 5 lakh to fund their holiday expenses.
And it’s not just for travel. More and more millennials are taking up personal loans to purchase a gadget of their choice. With growing inflation, additional taxes and the changing lifestyle of people, there is a constant need for finance to keep up.
With 91% millennials believing in making their own financial decisions, about 52% under the age of 46 took up personal loans in 2018. As the first generation to be fully immersed in mass-market digitalisation, more and more millennials are slowing their credit card usage, while increasingly using other credit products such as personal loans.
The reason for this transformation in the social fabric of the Indian society can be attributed to the easy accessibility to the internet. India constitutes the second largest market in the world for Facebook and LinkedIn. Over 50% of online subscribers use the internet to make informed purchase decisions.
The 2018 internet user base of India has projected as being at 54% above the age of 25. They are the largest demographc, by number, when it comes to purchasing online. For them, timely gratification is important. Brands too are using social media to make their presence feel online: from coming up with user-friendly websites to engaging customers with relevant and fresh content, all of which is having a great impact on millennials’ purchasing decisions.
As of June 2018, the expected internet user in India was supposed to reach 500 million. The continuous overall economic growth in India is largely being defined by 'Leisure Consciousness'. The rising quality of living standards is becoming the foundation of India’s economic structure; therefore the progress in the lives of the Indian millennials will directly be leading to national progress.
(The author is founder-CEO of IndiaLends, a digital personal loan service, and their views are personal)