The segment this week is C5, with all characteristics identical to last week’s C4 households—the chief wage earner has a graduate or postgraduate degree, or a diploma or certificate after schooling, is either a skilled worker or a professional, is in the middle years, married and has young children. But C5 households are nuclear families while the C4 households discussed last week involve a joint family set-up.
The C5 segment is the eighth largest among the 33 urban consumer segments and comprises nearly 250,000 households. This is a very interesting segment as it highlights several important emerging trends in urban India.
Reflecting the rise of the nuclear family in urban India, these households are small in size—88% have 3-4 members and there are no senior citizens in these households. Just 11% have more than two children—again a pointer to how well entrenched the small family norm has become in the urban landscape.
Also See | Indicus Analytics Research
In Indian cities, families aspire to an improved lifestyle, which they recognize is possible with fewer children. They would like to provide the best in basics such as food and education, and at the same time, are looking to upgrade their vehicles, home entertainment gadgets, cellphones, etc. This segment, therefore, forms a market for all aspirational products, especially those for children. These are the families that would be seen in cinema halls and malls on Sundays and eating out as well.
Since these are nuclear families, most households run solely on the earnings of the chief wage earner—just 15% of the spouses are employed. Yet, these small households are relatively well off—the median household income is Rs2.24 lakh per year and a little more than a quarter of the households in this segment earn at least Rs5 lakh annually. So while nearly half the households in the C5 segment own the houses they live in, the rest stay in rented houses and are in the market for an “ownership flat”. These families are also looking for appropriate long-term financial products for housing, children’s education, insurance, etc.
The educational qualifications of the chief wage earner are quite good, similar to the previous C segments, with a slightly higher proportion of graduates. A look at the industry of employment shows the diversity across the board with ‘education, health and social work’ leading with a 21% share and public administration coming in second, followed by manufacturing, and wholesale and retail trade.
Also See | C5 Segment
While Delhi tops the urban districts in this segment, Mumbai, Thane, Bangalore and Chennai follow in the highest number of C5 households. As the chief wage earners come from varied educational backgrounds, the profile of these households would be different in different cities. Delhi, for example, would have a larger share of those employed in the government (public administration sector) while Bangalore would see more information technology-related professionals in this segment. Mumbai would see those in financial intermediation and trade-related jobs in larger numbers. There would, of course, also be professionals in medicine, law, accountancy,?etc.,?among these households in all the cities.
As far as consumption baskets go, the shares of various components are similar to those of C4 households. However, with a different mix of ages in the households in the two segments, the type of goods and services consumed differs slightly. For instance, in the services category, the proportion spent on medical expenses is less in C5 households with no senior citizens.
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Graphics by Shyamal Banerjee/Mint and Ahmed Raza Khan/Mint