With the same occupational and educational profile as the segment taken up in the past few weeks, we look at E3 households—young, single, school-educated businessmen, who live alone.
In terms of population, this is the smallest segment, with less than 70,000 people spread across the country. This cluster E—which includes households that would generally correspond to SEC C/D—in fact has the highest number of segments within it, which is a reflection on the characteristics defining each small segment.
Also See Indicus Analytics Research (Graphic)
There is a high amount of heterogeneity within this class; expenditure and asset ownership characteristics differ significantly across the segments. For instance, in the last two weeks, we pointed out that house ownership was much higher in the E1 segment than in E2. The E3 segment has a smaller share—64% live in rented accommodation. The key to such significant differences, or if we want to see where these segments are headed in the future, lies in the household profiles.
The members of the E3 segment are school-educated businessman, living alone without family support. They are extremely independent, individualistic people. At such a young age—37% are less than 25 years old—they have struck out on their own, and unlike the previous two SEC E segments, do not live with their families. In the Indian context, where the family plays an important role, this says a lot about the E3 segment.
There is just one caveat, though, that estimates of characteristics of these households need to be seen in the light of the small sample size and the highly individualistic nature of the chief wage earners; there is more heterogeneity within this segment and outliers will, therefore, be more than in other segments. While 88% of these people have never been married, 12% are divorced or widowed.
Also See E2 Segment (Graphic)
The major occupation is formed by wholesale and retail trade, making up 29% of total employment. These are, therefore, small traders selling on footpaths, through small kiosks or moving around with hand carts, etc. Some would even have larger businesses, employing others, and these are not necessarily single-man enterprises. Manufacturing comes in second place at 21%—again, low-skilled work for school-educated businessmen—while hotels and restaurants rank third at 19%. Here again, we are looking at a very diversified range of activity, but all small in scale.
Ninety per cent of these people earn less than Rs3 lakh per year. However, there are some who have already moved much higher up—nearly 8% earn more than Rs15 lakh a year, which is a reflection of the high heterogeneity in this segment. These would be those who have scaled up operations in trade, hotels, transport, etc.
Another peculiar feature is the relatively higher proportion of spending on education—4.6%, indicating that these young people are also investing in raising their skill sets, not necessarily through formal colleges, but maybe through night school, private vocational institutes, etc.
The states that have a higher concentration of these households are Maharashtra, with Mumbai, Thane and Pune offering maximum scope for small businesses; Tamil Nadu, the most urbanized state, with Coimbatore ranking seventh among districts; Karnataka, with Bangalore as the focus city and the only one from the state in the top 50 districts in this segment; and Gujarat, famed for its keen business capabilities, with Ahmedabad, Surat and Rajkot in the top 20 districts. Delhi, with its high rate of immigration, ranks third among districts, behind Mumbai and Bangalore.
Indicus Analytics Research graphic by Shyamal Banerjee / Mint
E2 Segment graphic by Ahmed Raza Khan / Mint
—Indicus Indian Consumer Spectrum Series-XVIII
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