New Delhi– Indian millennials – aged 18-35 and accounting for nearly 34 per cent of the population, have driven e-retail industry’s growth through their increasing internet usage, said global services firm Deloitte in a report on Tuesday.
“Millennials’ increasing usage of internet for shopping has driven growth of online retail. E-retail is expected to surge from 3 per cent of total Indian retail market in 2017 to 7 per cent by 2021,” said the report “Trend-setting millennials: Redefining the consumer story”.
Born between 1980s and 2000, the Indian millennials, also known as ‘Gen-Y’, are prime wage earners, accounting for nearly 71 per cent of the total household income in a majority of Indian homes, found the study conducted along with the Retailers Association of India (RAI).
India is estimated to have about 440 million (34 per cent) millennials among its 1.3 billion population.
“With a median age of its population as 28 years, India is one of the youngest major economies globally. The millennials are driving the growth in consumer markets,” the report said.
With their increasing spending power, this segment is predicted to play an increasingly important role in India’s economic growth.
“For any modern retailer who wishes to stay relevant, millennials are an important customer segment and understanding their purchase habits is vital,” said RAI’s CEO Kumar Rajagopalan in the report.
The report found India’s Gen-Y shop using a mix of online and offline modes, where they compare prices and refer to reviews online even when they shop in an offline store.
“Social media platforms and online reviews form an important of the millennials’ shopping journey as it influences their purchasing journey.”
Even as many millennials prefer shopping in offline stores, a large section of them (47 per cent of millennials) prefers to shop online, the report said.
“More than 40 per cent of male millennials would make all their purchases online if they could, while nearly one-third female millennials would opt to make all their purchases online,” it said.
Millennials are found to be spending about 32 per cent of their income on entertainment and dining out, 21 per cent on clothing, 11 per cent on electronics and saving only about 10 per cent.
“This indicates a shift towards consumption economy rather than a savings economy, which was a predominant feature of Gen X (born between mid-1960s and early-1980s),” the report said.
Millennials are found to spend about 17 hours of a week on online activities like web browsing, movie streaming, social media and online banking.
Convenience of buying anywhere and anytime, discounts, and access to products not available offline were mentioned as some of the major reasons for India’s Gen-Y taking to online shopping.
To cater to the growing millennial needs, offline retailers must venture into online retail, it suggested. (IANS)