Young shoppers offer Indian growth

18 September 2012

NEW DELHI: Companies in India may have to adapt their strategies as shoppers start making category purchases at younger ages when buying everything from cars to cosmetics.

According to research from Anand Rathi, the broking house, customers acquiring their first mobile phone are now generally in their early twenties, whereas the prior age of entry was in the late thirties.

Shoppers splashing out on white goods in a similar way are, on average, in their late twenties, a total ten years lower than was previously the case.

Turning to cosmetics, the organisation reported that female consumers typically start using these products when aged between 13 and 14 years old, a position formerly held by 18 and 19 year olds.

Drivers completing their first automotive purchase are also currently 30 years old, down from 45 years old, reflecting increasing affluence at an earlier stage in life than was historically the norm.

Abdul Majeed, of PricewaterhouseCoopers, suggested rising disposable incomes mean that parents are often buying cars for their children, while many people entering today's workforce can readily afford a vehicle.

"There is also a change in mindset among people. A car used to be a luxury a few years ago. Now, in some situations, it is no more a luxury but has become a necessity," he told the Times of India.

Looking further ahead, Anand Rathi predicted the typical Indian shopper across such sectors would be 27 years old in 2020, off from around 32 years old.

"The 'youth' is becoming a very important target segment for consumer companies as they have higher disposable incomes than in the past and, more importantly, have greater propensity to spend," Abheek Singhi, of the Boston Consulting Group, said.

According to the Boston Consulting Group, individuals born after India's liberalisation programme began in 1991 would deliver 75% of expenditure in 2020, a process assisted in large part by urbanisation.

Saugata Gupta, chief executive of the consumer products wing of Marico, active in categories from cosmetics to health and wellness, believes these trends might exert a broader influence.

"A household may initially have two brands to begin with, but slowly the older members adopt the brand choice of the youngster," he said. "It is at this point when the relevance of the older brand goes down and that a younger brand surfaces."

Data sourced from Times of India; additional content by Warc staff