In 2024, the total consumption spending for Indians was pegged at $2 trillion, out of which GenZ cornered 43 per cent or about $860 billion. 

By 2035, Indians would have a spending appetite worth $3.9 trillion out of which $2 trillion would be driven by GenZs.

First Published: Oct 16 2024 | 12:10 AM IST

Snap Inc.’s latest report on people between born between 1997 and 2012, developed in partnership with Boston Consulting Group (BCG), said the category currently drives $860 billion in consumer spending—and this is projected to reach a staggering $2 trillion by 2035.

This spending surge will make every second rupee spent in India influenced by a Gen Z consumer.

Pulkit Trivedi, managing director, India at Snap Inc., said this is the country’s first comprehensive report on Gen Z, providing data on the spending power and consumer behaviour of this growing section of population.

The report lists Gen Z’s values as authenticity, visual engagement and deep connections, and said these are reshaping brand messaging.

Trivedi highlighted the need for brands to adjust their strategies to engage with this digitally savvy, mobile-first generation. “Gen Z is shaping high-value purchasing decisions, even influencing major household purchases like automobiles and tech products,” he told Mint.

Unlike the previous generation of millennials, who witnessed the growth of the internet, Gen Z has grown up as digital natives, living in a mobile-first world, and their relationship with technology informs their expectations from brands.

“They are born on technology, making them extremely comfortable with it, and their expression is predominantly visual. Creators are the new search engines,” Trivedi explained, noting that nearly 70% of Gen Zers rely on creators for product discovery, replacing traditional endorsements from Bollywood stars or major celebrities.

Spending power and influence

Currently, Gen Z directly spends $200 billion annually, while influencing an additional $660 billion in household purchases. By 2035, their direct spending will rocket to $1.8 trillion, accounting for nearly half of all consumer spending in India. As of today, 25% of Gen Zers are in the workforce, a number expected to rise to 47% by 2035, buttressing their financial prowess.

Despite this massive potential, however, only 15% of brands have developed strategies specifically targeting this group, even though 45% of companies recognize its importance, Trivedi said.

“Brands that adapt their messaging to resonate with Gen Z’s values will secure long-term loyalty,” Trivedi said. “Traditional celebrity endorsements may not resonate with this group, who instead favour real, relatable figures. Their role models are different—celebrities who are more authentic and grounded.”

Shopping trends: Trends Over Brands

One of the key insights from the report is that Gen Z prioritizes trends over brand loyalty. According to the report, Gen Zers are 1.7 times more likely to follow trends compared to millennials. This generation expects brands to keep pace with constantly changing preferences, making it crucial for marketers to innovate quickly.

“If a brand can’t adapt, it risks losing relevance with Gen Z,” Trivedi added.

Visuals and immersive experiences are also crucial in capturing their attention. Nearly 80% of Gen Z consumers prefer visuals—such as augmented reality (AR) lenses and GIFs—over text-based content.

As brands scramble to capture the attention of this demographic, Snap Inc, Trivedi said, has been partnering with Indian brands to create immersive and personalized experiences.

He pointed to a successful collaboration with Myntra during their Sneaker Fest, where Snap’s augmented reality (AR) lens allowed users to virtually try on shoes before making a purchase. This strategy helped Myntra see a significant boost in user engagement and sales.

The rise of “Shopcilizing”

Gen Z’s shopping behaviour is also distinct in that they frequently seek the opinions of their close-knit social circles during the shopping process—a trend dubbed “shopcilizing.” 

The report notes that 65% of Gen Zers share snaps and seek real-time feedback from friends while shopping in-store or online. Additionally, they seamlessly blend online and offline shopping, checking wish-lists or creator pages on their smartphones while in physical stores.

As India continues its march towards becoming a $10 trillion economy by 2030, Gen Z will be at the centre of this economic growth, said Trivedi, stressing the importance of brands acting now to secure their future standing with this cohort: “The spending power of Gen Z is undeniable, and brands must engage them today to stay relevant tomorrow.”

For marketers looking to tap into this massive opportunity, the report lays out five key action areas: staying on-trend, offering immersive visual experiences, fostering social interactions during the shopping journey, embracing omnichannel retailing, and engaging the right influencers. Brands that are able to align with Gen Z’s values and behaviour will be well-positioned to capture a significant share of this $2 trillion opportunity.