Rent pinches the young & married

Rent pinches the young & married

Keeping exactly the same educational and occupational profile of last week, we move up the life stage to focus on households where the chief wage earner is married, without children and lives in a nuclear family i.e. segment C3.

More than 800,000 people fall in this segment where the life stage has been narrowed to households where the chief wage earner is married, but has no children and lives in a nuclear family.

The majority of chief wage earners fall in the age group 25-34 years and though they are all married, 36% have spouses living away from them. There could be many reasons for the separation—wives still in the villages or in smaller towns, looking after the in-laws and waiting for the husband to get a better job or accommodation before moving, spouses working in different cities and finding it difficult to find a suitable job in the same city and so on. However, such separation is temporary for most households as this segment has a high degree of fluidity into the next C4 and C5 segments where young children come into the family. There would still be some households which have no children, but these are usually a minority. In this segment, 6% of the chief wage earners are in the age-group 45-54 years, when the probability of having children is low.

Also See | Indicus Analytics Research

This segment is at the starting point of their careers and incomes are relatively on the lower side. The annual median household income is Rs134,000 and savings rate is around 17%. Chief wage earners in this segment are well-educated: 62% have a graduate degree, 16% have received a diploma or certificate in vocational skill, while 21% have postgraduate degrees. However, there is a very wide range of skills and qualifications leading to a variety of jobs in various sectors. Education, health, community service, public administration, defence, etc., are the fields in which most of the chief wage earners in this segment work. Manufacturing comes in third, followed by construction, real estate, renting and related business services. A good 17% are self-employed. This could include work in trade, financial services, doctors and lawyers.

With the chief wage earners having a wide range of educational qualifications, their spouses differ in schooling attainments—28% have just completed higher secondary schooling, 3% have attended just primary school. On the other hand, 40% are graduates and though 12% of the spouses are employed, most are home makers.

Also Read | Previous articles in the Indicus Consumer Spectrum Series

Most stay in rented houses, just 25% own their homes. Rent forms the highest component of the household budget. These families would be prime markets for one-bedroom, low-cost housing. With builders and developers choosing to focus on high-rise, luxurious apartment complexes with plush facilities such as Italian marble and swimming pools, the large demand for low-cost housing has been going unmet.

Also SeeProfile of C3 segment

As many as 7% of the households in this segment are millionaire households in terms of annual income, and it is these who form a consumer market sweet spot. This is a young educated segment in the prime of life. The rapidly increasing income and choice of goods make this segment important for marketeers.

Many of these could move to B1, B2 or C4 segment and many from C1, C2 and D1 would in future move to this segment.

Geographical spread

The C3 segment is concentrated in the big cities of India, with Delhi leading with more than 300,000 households. Southern India is dominant in terms of concentration of this segment.

Among the affluent households in this segment, earning more than Rs10 lakh per annum, it is Mumbai that has the highest number of C3 households.

This series is brought to you by research firm Indicus Analytics Pvt Ltd

Illustration by Shyanal Banerjee/Mint

Graphics by Ahmed Raza Khan/Mint