Banking on the Gen Z Vibe

Move over, millennials – it’s Gen Z’s world! While the battle of ideas between generations may never cease, one thing’s for sure: Gen Z is reshaping the future of businesses. 

With their grip on what we consume and see in popular media, Gen Z is at the forefront of shaping overall consumer preferences. Just look at the K-Pop phenomenon, the rise of ‘Barbiecore,’ and the revival of all things ’90s – all of which bear the imprint of this generation. No wonder Gen Z is quickly becoming the one cohort that every business wants to win over.

With Gen Z making up a whopping 26% of the world’s population and projected to be a significant force in the Asia-Pacific region by 2025, it’s clear that understanding and catering to this group is essential for any business’s future.

So, let’s dive into the fascinating world of Gen Z and discover how this evolving consumer cohort is influencing the strategies of companies. 

What is Gen Z’s Vibe?

According to Bain & Co., a whopping 1 in every 3 shoppers in our country belongs to the Gen Z tribe. In India alone, there are an estimated 116 million Gen Z consumers, as per a Mint report.

Companies have always had a keen eye for the latest generation on the block. Each generation comes with its unique character, shaped by the times they grew up in. Back when millennials were the new kids on the block, we saw movements like the hipster era and the YOLO (You Only Live Once) philosophy because millennials were all about experiences over material possessions.

Now, Gen Z is all about authenticity. This quest for authenticity gives them the freedom to express themselves and an open-mindedness that no generation had before. 

High on Consumerism, Low on Brand Loyalty

1. Conscious consumerism – Gen-Z is living a youth that’s significantly different from anything we’ve seen before. Unlike previous generations, they’ve grown up in a world where consumption isn’t frowned upon but encouraged. However, it’s important to note that their spending isn’t frivolous. They invest in items that allow them to express their authentic selves
2. Brand Loyalty? Nah! – Convincing Gen Z to stick with a brand can be a tough task. Since they’re virtually living online, they have a wealth of information at their fingertips. As soon as they spot a better deal or option, they won’t hesitate to switch loyalty.
3. Immune to Celebs – Gen Z isn’t easily swayed by the glitz and glamour of celebrities. They place a higher trust in the recommendations of their friends, family, and relatable influencers than in the endorsements of celebrities. Their decision-making is rooted in authenticity and personal connections

Why are Companies Banking on Gen Z?

Because they simply can’t afford to overlook this rapidly expanding consumer demographic. 

And the numbers speak for themselves. Myntra plans to attract an additional 10 million Gen Z shoppers within the next 2 years. Likewise, Flipkart reports that approximately 25% of its fashion-oriented clientele falls within the Gen Z category.

Despite the fact that millennials still have significant spending power, the younger generations are the creators of future trends. 

Which Sectors are Shifting Focus to Gen Z Consumers?

Gen Z consumers are driving the fastest growth in categories such as fashion, footwear, smartwatches, wearable devices, light spirits, healthy foods, beauty and personal care.

In recent times, big players in e-commerce and retail have been quick to catch on. Amazon, Flipkart, and Myntra, for instance, have rolled out offerings specifically tailored to Gen Z. Myntra’s got a new feature called ‘FWD,’ on its app which offers shoppable video content – they even have a photo-search feature to help Gen Zers search for the fashion they see online or in real life. 

Meanwhile, Reliance Retail and Tata Group have introduced new retail formats like ‘Yousta’ and ‘Zudio’ to cater to the budget-conscious, fast-fashion-loving Gen Z crowd. As per the recent quarterly reports, Zudio has started contributing heavily to Tata’s fashion business. 

Dabur India’s recent move into the Direct-to-Consumer (D2C) space with the launch of its own website, Dabur Shop, is a clear indicator of how even traditional FMCG brands are now setting their sights on Gen Z consumers. Dabur is actively pursuing a digital-first approach and targeting a revenue of Rs 100 crore by the end of FY23. 

Excited about the Gen Z consumer wave? Explore this collection of smallcases which can benefit from India’s thriving Gen Z market. 🚀