How Gen Z is Shaping India's Future

Netflix binges, bubble tea and those last-minute Goa trips. If you’re a Gen Z reading this, chances are your wallet has been busy. And that’s what’s reshaping the new India.

India’s Generation Z (born ~1997–2012) is now the country’s largest generation, roughly 377 million strong. In fact, one in four Gen Z is already a part of India’s workforce, boosting discretionary spending.

Yet, this same generation has demonstrated the proclivity for early investing, with many starting their wealth creation journey right from their first internship stipends

This fusion of financial caution born from observing hardship and a social desire for immediate gratification has resulted in a “work hard, play hard” mentality.

Read on as we try to break down how Gen Z spends and saves.

Main Character Energy

Gen Z isn’t just another consumer segment; they’re reshaping industries. A BCG and Snapchat study says that Gen Z is currently driving 43% of the country’s total consumption, a figure that translates to $860 billion.

Of their $860 billion of total spending:

Direct spending (~$200B): Money Gen Z earns and spends themselves (e.g., salaried Gen Zs buying their own smartphones, clothes, etc.)

Influenced spending (~$660B): Purchases by families or friends that are influenced by Gen Z (e.g., parents buying cars or homes after a Gen Z’s input).

And this is just the beginning. BCG projects that by 2035, this cohort’s collective spending power will soar to an astonishing $2 trillion, implying that Gen Z will drive every second Rupee of consumer spend.

Gen Z Share in India’s Economy

Metric	Share of Gen Z
Share in India’s total consumption	43%
On Footwear	50%
On Dining	48%
On out-of-home entertainment	48%
On fashion & lifestyle	47%

Source: Snap-BCG report

Gen Z’s spending habits are distinctive. One of the most notable shifts is their preference for trends over traditional brands. Reports highlight that Gen Z is 1.7 times more likely to choose a trending style over a legacy brand name. This is why they are often drawn to creators who embody a specific vibe, rather than to large corporations promoting a generic lifestyle.

They prioritise trends and experiences over brand loyalty, and often “shop-sociate” (shop + socialise) with their friends and social media contacts.

This brings us to an important concept that most previous generations overlooked.

Money–Meaning–Wellness Equation

For the 2000-born, money is only part of the story. Studies show this generation ties financial security, personal meaning, and well-being together. The Deloitte survey captures this “trifecta”: “money, meaning, and well-being go hand in hand for younger generations,” with many Gen Zs viewing work primarily as a means to fund creative passions and causes.

In practice, Gen Zs may take a grind job so they can launch a side business they love, or refuse a job offer unless it lets them save for travel and hobbies.

The bottom line: Gen Z’s happiness equation isn’t just income, it’s actually income plus purpose plus personal wellness.

How Gen Z Saves

While Gen Z’s spending is impressive, their saving and investing habits paint a mixed picture. Let’s break it down:

What’s Troubling the Gen Z?

Many feel financially insecure despite their income.

Financial Stress & Rising Costs

A Deloitte survey shows 52% of Gen Zs and millennials worldwide (and 55% in India) live paycheck to paycheck, reflecting widespread financial insecurity. The high cost of living has become their number one concern, more than unemployment or even climate change.

Adapting Through Side Hustles & Liquidity

To bridge the gap, almost one in two Gen Z is juggling side hustles for extra income, compared to 37% of millennials. At the same time, young Indians are wary of locking money into long-term, illiquid assets like real estate or fixed deposits, favouring liquid options that offer flexibility in uncertain times.

Delulu is NOT the Solulu – Investing Is

Despite challenges, many Indian Gen Zs are starting early on savings and investing. They often begin with small amounts and learn along the way. In fact, a World Economic Forum Survey suggests that 30% of Gen Z started to invest in university or early adulthood, compared to 15% of millennials, 9% of Gen X, and 6% of Baby Boomers.

In short, Gen Z’s saving habits are still developing…

Mutual Funds and SIPs: When young Indians do invest, they prefer systematic routes. A 2023 YouGov survey found that 84% of Gen Z investors prefer equity mutual funds, with 45% favouring mid-cap funds and 41% choosing small-cap funds.

Meanwhile, data from Share.Market (PhonePe’s stock broking platform) shows that between August 1, 2024, and July 31, 2025, nearly half (48%) of its mutual fund investors were aged 18–30. Among these younger investors, 92% opted for SIPs, with an average monthly investment of ₹1,000.

Stock Markets: The participation of young investors in the stock market has also risen, with nearly 69% of the investor base now under the age of 40 as of June 2025, as per NSE data. Take a look:

This rise, NSE notes, “reflects the growing participation of younger individuals in capital markets, driven by the rise of discount brokerages and the proliferation of fintech platforms thathave made trading far easier.”

Learning from Everywhere: Gen Z’s financial journey is characterised by a reliance on digital platforms for information, a habit that is both empowering and perilous. This can then create a dangerous “confidence-knowledge gap” where a generation that feels confident in its ability to navigate digital platforms lacks the foundational knowledge to make sound financial decisions.

But there is a way to mitigate this problem. Fintech platforms are one of the few solutions that can bridge this gap between their digital-first mindset and their need for trustworthy, expert guidance.

Let’s understand how in the next section.

Lessons for Young Investors

Trust Experts over Guts: Now, we know that Gen Z is more research-driven than any generation before, but investing is a space where expert insights matter more than gut feelings. Following curated, research-backed portfolios can help avoid costly mistakes that come from chasing hype or reacting emotionally.

Diversify, Think Long-term: Gen Z’s aversion to illiquid bets suggests they value flexibility. This is wise. Young investors should diversify across assets (equities, debt, gold, property) to ride out market volatility. The key is transparency and patience: avoid get-rich-quick schemes. Trust the power of compounding by staying invested through market cycles.

Balance that YOLO: Gen Z wants both enjoyment now and a secure future. Young investors can apply this by automating a portion of their income into long-term schemes even as they enjoy life’s experiences (YOLO) with the rest. Why? Because over decades, even modest but consistent contributions can snowball.

Snowball Effect: In investing, the snowball effect is when an investment grows exponentially over time because the earned returns are reinvested, generating more returns, creating a cycle that accelerates wealth accumulation like a snowball rolling down a hill.

Think thematically: Just as you shop with themes (tech-savvy, eco-friendly, gaming), you can invest thematically as well. Platforms like smallcase offer expert-made baskets of stocks/ETFs around ideas you care about, e.g., a “Green Energy” or a “Digital India” tech, or even a “Growth & Value” portfolio. You can choose from over 500+ such expert-managed stock baskets that match your aura!

Close the Education Gap: Ultimately, Gen Z needs real financial literacy. Follow reliable sources, such as government campaigns, certified advisors, or established fintech educators.

Build a foundation. If you want to clear concepts of investing, no matter how simple or complicated, smallcase blogs cover myriad topics that are imperative to know to invest smartly. You can check them out here.

The Road Ahead

Gen Z is already India’s most powerful consumer cohort, steering nearly half of all spending. But their savings habits may lag behind their urge to experiment in every field.

If you’re reading this and thinking, “Hey, I’m Gen Z. How do I do better?”, consider diversification, long-term discipline, and the ability to invest in what they care about. Because for you people, the end goal is not just more bank balance, it’s funding a life that feels right.

In short, the coming years will be telling as India’s youth take over the economic pedal.

Disclaimer: This analysis is for educational purposes and does not constitute investment advice. Market conditions can change, and past performance is not indicative of future results. Investors should conduct their own research and/or consult a certified financial advisor before making investment decisions.