Spirit of youth: spending on liquor up 14%, coffee down
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Spirit of youth: spending on liquor up 14%, coffee down

Even with the dearth of jobs, urban youth have kept up their spending on essential and luxury items since last year. Urban youth are going ballistic on movies, phone bills, liquor – spending way above than what they earn. Himani Chandna Gurtoo and M Ramakrishnan report.

india Updated: Aug 08, 2013 22:22 IST
jobs,urban youth,luxury items spending

Even with the dearth of jobs, urban youth have kept up their spending on essential and luxury items since last year. Their pockets are still as deep; they are still being wooed by lucrative gadgets, the internet, fitness centres and fashion accessories.

According to the Hindustan Times- MaRS Youth Survey 2013, there is a significant increase in the number of youngsters who are spending more than they earn, depicting a dichotomy between reality and aspirations.

There are surprises galore too. Youngsters are spending less money on personal grooming. And, Chennai youth are a cut above the rest when it comes to splurging on looking good.

The survey finds more than 22.8% of urban youth spend more than their monthly income. This overspend figure is up from 14.5% a year ago.

Watching a movie in a theatre, for instance, has become more frequent and expensive — from Rs 258 to Rs 309, a 20% increase.

Watching a movie on a personal computer or laptop, however, seems to agree with many; half the youth across 14 cities give it their nod. Full-time 18-21-year-old students and full-time employees favour the ‘download’ option more than part-time students or workers. A substantial 61.2% who advocate piracy are male.

Overall, males spend considerably more money than females on most consumer products or services. Their spending patterns do not differ much, but girls seem to love a good bargain a little more than men.

Liquor seems to be the next favourite consumer pick, with youth spending 14% more than what they used to a year ago.

Phone bills have been on the upside, with monthly expenses up from Rs 318 to Rs 348, a 9% hike.

Fast food and fitness costs have been comparatively steady, with minor leaps of 1% and 3% respectively. Boys have spent more money on fitness centres than girls.

A slide is witnessed in personal grooming (which includes buying cosmetics and parlour visits) and hanging out at coffee shops. Average monthly expenditure on grooming dipped by 12%, from Rs 332 to Rs 293. For coffee shops, the number dropped by nearly 14%, from Rs 241 to Rs 208.

Pinakiranjan Mishra, national leader for retail and consumer products at Ernst and Young (EY), said that this was indeed a surprising change in trends.

“(Grooming and cosmetics) are a discretionary right. Consumers’ decision on this may tend to vary like this,” he said. “Coffee shops are more of a cultural trend. It’s more important for youth to spend time together. So they may switch to lower-priced brands or even settle for a roadside tea stall.”

On the context of personal grooming, Vaidehi Venkatraman, 26, subeditor with a daily in Mumbai, said her monthly expenditure was about Rs 1,500.

Asked if rising costs had pinched her wallet, she said, “It has not deterred me. It hardly makes a difference.”

Mumbai, however, does not top the list when it comes to splurging on looking good. Neither do Delhi and Bangalore. The spot belongs to Chennai, where youth on an average spend Rs 474 per month — 62% more than the average of all cities’ costs put together.

The plunging popularity in this segment may be attributed to costs incurred in a saloon, more than cosmetic products, which sell at uniform MRP across most metros.

Sanchitha Ashok, a 24-year-old software engineer in Chennai, pointed out to her profession, which has made it easier for her and her colleagues to pamper themselves due to reasonably good salaries. “The average cost of a spa is Rs 575 and hair colouring is around Rs 700,” she said.

A basic hair cut costs 300 bucks. Parlours make a lot of money in selling high-end shampoos, conditioners and serums.

“While basic services such as threading are at Rs 20, there is an equal amount of sales tax component, which makes it double. Mid-range services such as pedicure, manicure and waxing have hit the roof. The bridal package is another cash cow for parlours,” she said.

Mumbai, however, scores well above the rest in most other categories. For instance, 69.5% Mumbaikars said they sometimes purchased unaffordable items (Bangalore and New Delhi came a close second with about 66% in both cases) and 77% often tried out new products if it looked good or interested them. Mumbai also tops the list on monthly internet expenditure (Rs 265) and mobile bills (Rs 498).

Interestingly, full-time students — who actually have no source of income except pocket money — are the ones who buy unaffordable items the most. They are also the ones who are more interested in trying new products. Among full-time students, females aspire more to be richer to buy anything they want.

Female youth also outweigh their male counterparts when seeking a life of luxury. An increasing number of them also find it important to have the latest gadgets — something that goes against the traditional notion of ‘tech-savvy boys’. Also, they are more interested in buying high-end fashion brands these days.

Deepa Thomas, an e-commerce evangelist at eBay India, said, “80% of our subscriber base comprises youngsters. Youngsters are now the focus of every brand. No product, no company wants to miss the youth factor, as the segment is one which spends crazily on products by just clicking on them.”

Ankur Bisen, vice-president, retail Technopak, said, “Over the last decade, Indian consumers have made a transition from utility-based consumption to aspiration-based consumption. This has resulted in growth and proliferation of many categories and products that were not even present 10 years back. In this transition, youth spending played the major role.”

First Published: Aug 07, 2013 18:38 IST