Heart of the middle class

Heart of the middle class

Last week, we took up segment B1, 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. This week we move up along the age and life stage slide to look at households with the same educational profile but where the chief wage earner is married with young children—segment B2.

This segment, B2, corresponds to the typical urban family shown in advertisements: well educated, upper-middle class couples with one or two young children. The majority, 55% of these households, have four members, in line with the hum-do-hamare-do image; just 9% of the households in this segment have more than two children. While most of them live in nuclear families,15% of the households do have senior citizens as well.

Most of them (86%) live in apartments and a larger proportion of households in this segment own their houses—26%, compared with the 17% in the younger segment of B1. Having moved up the life stage, they have also procured all the basic assets—all households own television sets, almost half own cars. Almost a quarter have acquired assets such as air conditioners. While air conditioners are a luxury for most Indians, these are, in fact, slowly becoming a necessity for well-to-do houses that can afford to have controlled temperatures indoors and keep out the city noise and pollution.

Also See | Indicus Analytics Research (Graphic)

B2 segment (Graphic)

The median age of the chief wage earner in these households is 37 years and annual household income is high at Rs6.66 lakh; 25% of them hold postgraduate degrees and 70% are graduates. With manufacturing the top industry of employment, followed by public administration/defence and financial intermediation, in all probability most of these chief wage earners have a professional degree. Almost 80% of the chief wage earners in this segment work in a company— public or private limited—or in the government.

In most of these households, only one person is employed, the chief wage earner. Despite the high qualifications of the spouses—at least 50% are graduates and 21% hold postgraduate degrees—79% are homemakers. Clearly, looking after the young children is a priority in these households. Here again, the caring mother and homemaker in advertisements comes to mind—Maggi and Saffola, for instance.

With a 32% savings rate, these households are putting away a good part of their incomes, saving for their children’s education, homes, retirement and other needs. Their household consumption expenditure, averaging Rs4.55 lakh in their small families, is tilted heavily towards services—within which education takes up 8% of the budget. Even within food, which accounts for just 14% of their household budget, high-value and processed food dominate the food basket.

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

The B2 households comprise of 1.44 million people in 359,000 households—an average household size of four. The top 12 districts with B2 concentration are Mumbai, Delhi, Bangalore, Pune, Chennai, Thane, Kolkata, Hyderabad, Kanpur Nagar, Nagpur, Lucknow and Bardhaman. These 12 districts account for 42% of the B2 segment population in the country

As a state, Maharashtra alone accounts for one-fifth of this segment.

Going ahead, this segment will keep growing as B1 ages and as members of segments C1 to C4 add skills. This segment has already caught the eye of the marketeers; as the heart of the bulging middle class, B2 represents the prime of life—settled in life with jobs and family with a reasonably secure future and growing savings.

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

Graphics by Ahmed Raza Khan / Mint