Last week, we discussed segments G4 and G5, older in age, singles or married with grown-up children. The defining feature for these two segments is the low level of education and skills.
This week, keeping the age group similar, we move up the skill scale to examine the characteristics of A5—highly educated, older in age, living alone, either single or married couples whose children have moved away from home.
A5 is a segment that would be highly familiar to the readers of this newspaper. These households represent well-to-do urban Indians in the 50+ age group, those who would have a family background that could afford college education, from the era when a “permanent” job, preferably in the government, was the sign of “having arrived”.
As much as 43% of the chief wage earners work in a government or public sector undertaking. A small segment, comprising less than 1% of urban Indian households, these households would be concentrated in a few major cities that were the hubs of economic activity before or just around the time of liberalization.
Also See | Indicus Analytics Research (Graphics)
Essentially well educated, all chief wage earners have completed schooling and 66% are graduates, while 26% hold a postgraduate degree or diploma.
At least 80% of the chief wage earners are currently married and their spouses have an interesting mix of educational levels—close to 50% are at least graduates, but there is also a small minority illiterates (3%). The disparity in the education profiles of the chief wage earner and their spouse points to the unequal educational opportunities for women in the past. In the following decade, however, we can expect higher educational qualifications of spouses in this segment. Most spouses are homemakers, and just 15% are employed.
Entrepreneurship is not the chosen occupation of the majority in this group—less than one-third are self-employed, though even these would represent doctors, chartered accountants, lawyers and other professionals. The sectors preferred by this group are education, government service, manufacturing, banking and health services.
While all chief wage earners are above the age of 45, the median age in this segment is 55 years and 11% of the chief wage earners are above the age of 64. These households come mainly from socially higher groups—just a quarter belong to scheduled castes, scheduled tribes or other backward classes, groups which traditionally had lower incomes and opportunities of education and employment. Here, too, we can expect significant change in the coming decades, as more initiatives for inclusive education will make an impact on consumer profiles.
With a median household income of Rs2.41 lakh, this segment saves 17% of its income, lower than the overall average, in line with the life-stage of older years. These families have already built up their assets over time—68% own their houses and 12% have air conditioners in their homes.
The spending pattern is weighted heavily towards services, with their higher incomes and life-stage; 10% of the household budgets goes on medical services. However, as the members of these households have not quite crossed middle age but have completed their family commitments, if any, they also spend on entertainment, high value and processed foods, durable and personal goods.
Also See | Elderly Demographics (Graphics)
Why would marketers be interested in A5?
Since 59% of the households are two-member households and only 8% have minors in their households, the segment has both time and inclination for leisure.
Eighteen per cent are also completely alone (single member), and hence this is a segment which will be on the lookout for company and amusement. They are also a captive audience for entertainment channels and are one of the key drivers of soaps and reality shows.
The segment also spends more on services as compared with other segments. Most of the basic investments in assets have also been accomplished. Consequently, these segments are ripe for service providers of fitness and well being, tourism, savings and investment products and other similar services.
A5 is a segment which is the greatest beneficiary of better healthcare and consequent longevity. An emerging segment of medicine geriatrics (which focuses on healthcare for the aged) will find this segment of particular interest.
Although the complete segment itself is not yet very old, it is ageing fast and has both the awareness and the means to look for better health care.
Going ahead, what will this segment look like in numbers?
At present this segment represents 1% of the urban households, 767,000 in number. This is set to rise as more and more households from A4 will move into this segment. The rapidly increasing longevity, both in life span and opportunities for working, will also enhance both the numbers and the spending power.
This series is brought to you by research firm Indicus Analytics Pvt. Ltd
Graphics by Ahmed Raza Khan/Mint