Young, single, and willing to spend

Young, single, and willing to spend

Last week, we took up A5—highly educated, elderly, living alone, either single or married couples whose children have moved away from home.

This week, we come down the scale of age and narrow the occupational focus on executives and managers segment—B1.

The B1 segment includes households where the chief wage earner is young, could be single or married, living in a nuclear or joint family, but has no children.

The defining attribute of this segment is that the chief wage earner holds a graduate or postgraduate degree and is in a regular salaried job.

Given the stringent narrowing in focus in life-stage and occupation, these households are a small minority—0.17% of urban Indian households, made up of a little more then 300,000 people. Yet, the household profile gives clear indications of the income and consumption patterns that are quite cohesive within the segment.

With high educational qualifications of the chief wage earner—70% are postgraduates, the average household income in this segment is also high—Rs6.01 lakh.

Also See | Indicus Analytics Research (Graphics)

The savings rate of 29% is greater than the average, and with low current family commitments and high incomes, these households would be using their savings as a cushion for later years. Not only are these households prime consumers of financial products, with less than 20% of the households owning the house they live in, they would also be potential consumers of housing loans.

The boom in the services sector in the last decade is reflected clearly in the employment profile of these young, educated chief wage earners. Financial intermediation—banking, insurance, financial service companies etc. —is the industry that dominates these young graduates. In all probability, the master of business administration degree with finance or human resources would be the main educational qualification here. Manufacturing does take the second rung, while government service and defence runs third in the list. Telecom, logistics, computers and information technology are the other industry types that have drawn in the chief wage earners in this segment.

Also See | B1 Segment (young, educated and earning) (Graphics)

There is still a greater dominance of government or public sector employment here, 41%, compared with 31% in public or private limited companies.

As many as 52% of the chief wage earners are still single and of those who are married, the educational profile of the spouse is in sync with the urban, well-educated household profile—80% are graduates and above.

Also Read | Previous articles in the Indicus Indian Consumer Spectrum Series

These small and well-to-do urban households are exposed to Western lifestyles and would be open to foods and gadgets that help save time—11% of their consumption is on processed foods and 8% on high-value foods, while services take up the bulk of their household budgets. Recreation and entertainment, along with conveyance, are the major items of consumption.

Why would marketeers be interested in B1?

This is a young and upwardly mobile segment. They have aspirations and the means to realize the aspirations. This rapidly expanding group should be of particular interest to marketeers of value-added products and services.

Let’s take a look at the spread of B1 segment in the top 135 districts of the country, which account for two-thirds of the urban population.

The top 12 districts with B1 concentration are Mumbai, Delhi, Bangalore, Pune, Thane, Kolkata, Chennai, Hyderabad, Nagpur, Kanpur Nagar, Bardhaman and Lucknow. These 12 districts account for 58% of the B1 segment population in these 135 districts, which is 239,000. The other 455 districts account for only 103,000 people of the B1 segment.

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

Graphics by Ahmed Raza Khan / Mint