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New Delhi: India's Gen Z population, now at 377 million, is not just the largest generation in the country's history but also a powerful economic force with a collective spending power of $860 billion, a report has revealed.
Gen Z is the generation of people born between 1996 and 2010.
The "The $2 Trillion Opportunity: How Gen Z is Shaping the New India" report by technology firm Snap (parent company of Snapchat) and Boston Consulting Group (BCG) revealed that Gen Z currently holds a collective spending power of $860 billion, accounting for 43 per cent of India's total consumer expenditure.
"Gen Z is already driving 43 per cent 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," said Nimisha Jain, Senior Partner and Managing Director, BCG India.
Gen Zs are poised to play an increasingly vital role with their spending power projected to reach an astounding $2 trillion by 2035, the report said.
Collective spending consists of direct spending -- made by working Gen Zs with their earnings, and influenced spending -- by dependent Gen Zs; these spends are mostly made by families where Gen Zs play an active role in influencing product/brand choice.
Direct spending currently stands at $200 billion, with 1 out of every 4 GenZs in the workforce. The figure is projected to reach $250 billion by 2025 when every second Gen Z will be working, the report said.
"By 2035, these figures (direct spends) 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," it said.
The report is based on the findings of a survey carried out among around 1,000 parents to evaluate their influence, alongside insights gathered from around 1,200 Gen Zs and millennials to identify their core values and purchasing behaviours. It also took insights from the combined expertise of BCG and Snap in the domain.
Further, Jain said it is important for marketers to take note that this generation is driven by unique values and beliefs, however, it was observed that only 15 per cent of brands surveyed are actively taking steps to tap into this opportunity.
"For businesses, understanding and authentically engaging with Gen Z isn't just good to have; it's necessary for winning today and will be imperative for survival tomorrow," she said.
The report said that while 45 per cent of businesses acknowledge Gen Z's potential, only 15 per cent 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.
It recommended rapidly innovating in line with trends, integrating social interaction throughout the shopping journey, providing visually immersive experiences both online and offline, and engaging with the right influencers in the right way as initiatives brands should take to capitalise on the opportunity.