Young and going it alone3 min read . Updated: 30 Dec 2009, 05:14 PM IST
Young and going it alone
Young and going it alone
In the inaugural piece in this series, we looked at segment G1, which is the lowest in terms of skill and the youngest in terms of life stage. This week, we look at a different end of the spectrum—moving vertically on the skill side. Segment A1 straddles the younger years (single alone or staying with family, or married but still young). This specific segment comprises self-employed chief wage earners only.
A1: young entreprenuers
This segment is among the most entrepreneurial. It is a unique segment consisting of people who are all completely self-employed.
The median age of the chief wage earners is 30 years and nearly 40% are unmarried. The segment itself is very small—only 85,000 households (222,000 population) out of the approximately 77 million households in urban India. The chief wage earners tend to be highly educated—as many as 96% are at least graduates. They are also young enough to be adding professional qualifications to their arsenal.
Also Read Understanding the Indian consumer
The average household size in this segment is 2.6. In fact, 76% in this segment are two-member households. Only 6% have minors (children) and only 13% have elders living with them. They are also likely to be socializing much more than their older counterparts because they are not hemmed in by demands on time from children or elders. Yet, these are not in general Dink (double income no kids) couples.
In almost 75% of the families, the chief wage earner is also the sole wage earner. The savings rate is around 23%.
Also See Indicus Analytics Research (Graphics)
These two facts indicate that whereas the segment is easy-going, it is not entirely spendthrift and has one eye firmly on savings and investments; perhaps, as a risk cover for its chosen vocation of entrepreneurship. The segment is likely to seriously consider new investment ideas.
The age profile is dominated by the 25-34 years group (81%). This is the segment which has high earning capacity, good savings rate and is not burdened with immediate expense commitments.
Also See Young, Self-employed Segment of Chief Wage Earners (Graphics)
However, since this is a segment exclusively of self-employed professionals, it comprises those who are likely to be building long-term assets which may take different forms— building a company/enterprise, buying land/apartments, or building a stock portfolio.
While wholesale and retail trade activities form the largest occupational group of 31% in this segment, manufacturing, construction and real estate also feature high in the occupation profile.
Around 90% of this segment works in five industry sectors—real estate, computers, construction, manufacturing and trade.
Typically, the people falling within this group are heading small businesses and grappling with challenges to grow in size.
As such, this group is naturally attractive for marketeers of products and services related to tourism, evening or weekend entertainment (restaurants, amusement, etc.), gadgets, personal transport vehicles and a host of personal products—clothing, jewellery and footwear, among others.
Since nearly 40% are unmarried, they are likely to be aggressively networking in pursuit of enhanced business and career opportunities. They may be experimenting with activities such as golf and conferences to build contacts and adventure sports and stock trading to learn new tricks and to unwind.
In terms of household incomes, the segment straddles virtually all the major income classes. However, the concentration is around the Rs3.5 lakh per annum mark, the median income being Rs3.5 lakh.
This segment is likely to expand very rapidly, and for several reasons.
First, there is a surge in entrepreneurship in the country. Typically, the educated class tended to look for employment, especially in government jobs; this inclination is changing, and changing rapidly, as the liberalized, fast-growing economy creates more opportunities.
Second, it is increasingly possible to get good quality education part-time. This allows less qualified entrepreneurs to graduate into this segment during the course of their career. This was happening before too, but the pace has accelerated in recent times.
Also, not only will this segment expand rapidly, its income profile is also likely to move upwards faster than that of other segments.
The households in this segment are open to change and relatively free to take on more risk. As success stories abound of entrepreneurs around the country, this segment is the first to take the cue and move ahead.
This series is brought to you by research firmIndicus Analytics Pvt. Ltd