Low spending, high aspirations

Also See |Indicus Analytics Research (Graphic)

The G3 segment is large—it is the fourth largest urban consumer segment with around 5.8 million households and 27 million people, making up 8% of the urban population. Household sizes are large —nearly half have five or more members. This is because this segment includes both nuclear and joint families.

All the households have children, as this segment has been defined by this characteristic; 40% have more than two children. Ninety per cent of the households have no seniors— not only does this segment include nuclear families, but also, with this educational profile, this is a segment that marries young and has children at a younger age. It would not be uncommon, in joint families, to have three generations, all below the age of 60, in a household here.

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

This is a low income segment, of course; the education level limits opportunities for these households. Nearly twothirds of the chief wage earners have just about completed primary school, while the rest have finished middle school; none has got past the highersecondary level. The median household income is just Rs66,000. Though in one-third of the households two or more members are earning, education levels and skills are at the lower end for all adults.

Also See |G3 segment

The quantum of savings is low as catering to the most basic necessities of these large families takes up most of the budget. Yet, 56% of these households own the homes they live in and the others are working their way up to achieving the same.

The chief wage earners in these households are typically second-generation migrants; they have basic schooling and have learnt their skills through on-the-job training as apprenticeships in their younger days.

A majority are in the age group of 25-44 years, and they form a very diverse group with respect to their employment profiles. A little more than 40% are selfemployed and just 30% have regular salaried jobs, while the rest depend on daily contractual work. Less than 10% have jobs with large private or public sector companies, or are with the government, the large majority are in the unorganized sector.

The unorganized sector provides employment to threequarters of urban Indians and is indeed the lifeline for those with low education and skills. Over the past decade, employment in the unorganized sector has grown faster than in the organized sector, and with the spread of education, National Sample Survey Organisation surveys have shown that this sector is also seeing a gradual reduction in the share of those at the lowest end.

While there is an upgrade in the quality of the workforce, the pace and levels still need to be ramped up significantly to generate higher household incomes. Consumption levels, therefore, are at the lower end as well. The penetration of durables is among the lowest in this segment. Aspirations are, however, high, as the influence of the media is very strong.

This is a group that would want to move up as fast as it could, but is constrained by its lack of capabilities. Households do want their children to learn more and have better opportunities. However, they run up against the poor education system currently in place.

There appears to be a change in the offing that will hopefully make schooling more meaningful and make the youngsters from this segment more employable than the present generation.

Indicus Analytics Research graphic by Shyamal Banerjee/Mint

G3 segment graphic by Ahmed Raza Khan/Mint

—Indicus Indian Consumer Spectrum Series-XXX

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

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