Home > News > India > Why India needs its own definition of what it means to be a ‘millennial’

Millennials are an age cohort conceived in America as those born between 1981 and 1996. In an article Defining Generations: Where Millennials end and Generation Z Begins, Pew Research says that “cut-offs of ages aren’t an exact science, but tools for allowing analysis, yet not arbitrary, and based on political, economic, social factors". This means that before we adopt the American construct of “millennials" as a relevant tool for analysis, we need to test whether, by this definition, it makes sense to do so. And if not, what do we use then?

The markers for American millennials include being “old enough to grasp the historical significance of 9/11", growing up “in the shadows of the wars in Iraq and Afghanistan" with “huge polarization of the environment", the 2008 watershed election when youth played a major role, entering the workforce at the height of the economic recession, and with being the most racially diverse group in America’s history. Clearly, none of these markers apply to us here.

So what are India’s age cohorts that fit Pew’s criteria of being a good tool for analyses and yet not arbitrary, but based on thresholds which are defined by political, economic social events? Liberalization is a central event for Indians, and certainly is most impactful one for any analysis of consumption.

The age cohort born between 1981 and 1996, the Indian contemporaries of American millennials, is a distinctive one. They’re India’s first non-socialist generation, the first to have consumption encouraged, not curbed. Let’s call them Liberalization Children (LC), a term I have used earlier. Why pick 1981 to 1996? This is the period when India’s transition happened from a closed economy to an open one—colour TV, 1982, Rajiv Gandhi and 1984 heralded both a generational shift and so-called light reforms, while big-bang liberalization followed in 1991, and executing the basic reforms (decontrolling) for the transition between 1991 and 1994.

Studying this period also allows meaningful analysis of this cohort which is today between 25 and 40 years old, all in the workforce and “full nest" householders. More than 85% are married, most have children presumably, and this is the first cohort of both parents and children with post-liberalization consumption sensibilities. That is why their large numbers—30% of the population—have fuelled India’s consumption growth, aided by gross domestic product-enabled income growth, more than any generation before.

Consumption commentators often forget to factor in the critical role that supply plays in shaping consumption. For example, it is no surprise that LC consume more debt than their parents—they have more access to loans because of the birth of modern private retail banking in 1993 and establishment of CIBIL in 2000. The better-off LC are sought after by banks for loans for cars, two-wheelers, housing, durables, and this fuels their consumption. This cohort is also the beneficiary of decreased prices and improved quality thanks to, post-liberalization, duties coming down, competition increasing, the Chinese goods boom and the e-commerce money-burn wooing of customers, followed by the sharing economy.

But we also need to be less starry-eyed and notice this cohort’s dismal demographics—a majority rural, one-third have not crossed primary school, only 10-12% are graduates, most who work are in casual labour or petty self-employment, salary earners are in the minority.

Being mostly of modest income, and raised by socialist generation parents, they are not trigger-happy spenders. They spend pragmatically on utilitarian consumption and affordable indulgences. Their consumption is thus rooted in the past sensibility as well as the future. Conveyance, communication, productivity tools (durables, motorcycles, smartphones), family entertainment and education are their high-spending categories.

Cellphones tariff was affordable only from 2001. Cellphone access truly began when our oldest millennial was 20, and parents didn’t give it to the young ones. Affordable smartphones came much later. They are enthusiastic about technology, very comfortable with it and encourage their children’s usage of technology, though unlike them they are not digital from birth.

Given that the majority have endured modest incomes and tough living conditions for a lot of their lives and have in the last five to 10 years gained access to cooking gas connections, bank accounts, improved infrastructure and amenities, direct benefit transfers and easier payments, they are grateful to the Modi government. How are they coping with the slowdown? As the mainstream ruling age cohort and not some niche protected segment, they struggle with vulnerable occupations and muted or negligible income growths. Their utilitarian consumption gets even more utilitarian and their careful trade-offs make for interesting and patchy corporate results. While they consume debt, they do so prudently. But their desire to consume is intact.

Though LC mark the beginning of the age of Indian consumerism, the next generation is far more interesting and discontinuous in consumption and worldview. Born after 1996, called Gen Z in America, the appropriate label for them in India is Digizens. The oldest is still under 23 years old, and none of them know the India that was before its Y2K-spurred identity of a software giant, before ubiquitous and cheap internet and gadgets, before digital payments, JAM, e-governance and tech-driven subsidies, social media, all accessible no matter which social class you are. Digitally driven businesses enable even lower-income Digizens to consume “above their pay grade" in status-blind ways (think dynamic pricing on airline tickets, ride-sharing, rickshaw hailing apps). The rise in data tariffs and how they will adjust the rest of their consumption to afford it is yet to be seen.

They are also the cohort where the oldest of whom turned 18 in 2014 and were part of the much touted youth voter group that voted Narendra Modi to power. This is the first generation after the 60s and 70s' generation that is growing up with a strong, strident and communicative leader — Indira Gandhi then, Narendra Modi now.

Pew Research says that baby boomers grew up in the days of the TV explosion, GenX with the computer revolution, millennials with the internet revolution. The Indian millennial, liberalization's child, grew up with the TV and computer revolutions happening simultaneously with the Digizens in the midst of the internet revolution.

The big picture is that from now on, supply will drive demand. The desire and the business models are available and consumption will depend on who offers a more meaningful supply. If the economy picks up as we hope it will and this supply-side vibrancy happens, then liberalization children and their Digizen offspring will skyrocket consumption, the new way.

Rama Bijapurkar is a market strategy consultant and co-founder of People Research on India’s Consumer Economy, www.ice360.in

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