Gen Z’s spends to surge from $860 billion to $2 trillion in a decade: Snap+BCG Report

More than a demographic, Gen Z in India are an economic powerhouse transforming the consumer landscape, especially since they are the “largest generation to ever live” in India, fuelling growth across sectors. 

With a population of 377 million (37.7 crore), Gen Z not only constitutes the largest demographic in India but also holds a remarkable collective spending power of $860 billion (Rs 71,400 Cr), which accounts for 43% of the nation’s consumption, reveals the Snap x BCG’s latest report shared with e4m. 

Notably, $200 billion of this expenditure is direct, stemming from their own earnings, while the remainder reflects their ability to influence the spending habits of others. Key spending areas for Gen Z include footwear (50%), dining (48%), entertainment (48%), and fashion & lifestyle (47%), indicating their diverse interests and preferences.

“Their influence is projected to grow to approximately $2 trillion (Rs 1,66,000 Cr) over the next decade”, predicts the 64-page report, whose foreword is written by Snap India head Pulkit Trivedi and Managing Director and Senior Partner of BCG,  Nimisha Jain. 

A notable characteristic of India’s Gen Z is their active participation in the workforce, with one in four members already employed. This involvement enhances their financial impact, as they contribute significantly to consumer spending—43% across major categories which is set to touch 50 percent by 2035, noted the report. 

Beliefs & Values

Often misunderstood as a detached cohort, Gen Z prioritizes deep connections - four in five Gen Z prioritize their inner circle, sharing every detail and making real-time purchase decisions together. However, unlike previous generations, Gen Z emphasizes authenticity in their social engagements, valuing deep connections within their "Inner Circle." 

Over two-thirds of this cohort prioritize genuine interactions, with many expressing their vulnerabilities and embracing imperfections. 

This generation often looks up to relatable role models whose journeys resonate with their experiences. Moreover, Gen Z holds traditions in high regard, viewing them not merely as customs but as opportunities for personal interpretation and relevance in a modern context, as per the report. 

Gen Z believe in walking the talk - they are 1.6x likelier than millennials to go the extra mile and act on the causes for which they care deeply. They are also 1.5x more likely to care about ‘mental health’ than millennials. 

Smart Spending 

Visual engagement serves as a primary mode of self-expression for Gen Z, with nearly 80% drawn to various visual forms. They prefer communicating through visuals like GIFs and stickers, and they are more inclined to "shopcialize"—sharing shopping experiences with their inner circle in real time. Interestingly, Gen Z conducts as much shopping as millennials but invests more time in research, showcasing their smart spending habits. They prioritize trends over brands, indicating a preference for innovation and adaptability in their purchasing decisions.

For brands aiming to connect with Gen Z, understanding this generation's significance is crucial. Despite their economic influence, only 45% of brands acknowledge Gen Z's power, and a mere 15% have acted upon this knowledge. This gap presents a significant opportunity for companies willing to adapt and engage with Gen Z, emphasizing the need for a strategic approach to resonate with this dynamic and influential demographic, claims the study.