Gen Z is showing preference for next-generation brands that prioritize digital | Representational
The digital-native and app-first Gen Z cohort is taking center stage in India’s consumer markets by marking “big shifts” in consumer trends, including the rise of fast-track commerce delivery and direct-to-consumer brands, according to a Bernstein report.
Brands are seeking a deeper connection with this digitally native, app-first generation that “swipes up” for virtually everything from social media to ride-hailing and food delivery services.
India’s Gen Z is the largest in the world, according to the report on the digital-born cohort, who shop, work and eat online. Gen Z is the generation born between 1996 and 2010.
Indian Generation Z accounts for 20 per cent of the world’s population and around 27 per cent of India’s population, he noted.
Gen Z has become the “swipe-up” generation considering the amount of time they spend on social media. They swipe up for practically everything — social media, ride-hailing and food delivery, according to Bernstein’s report on “India Internet.”
It was observed that Generation Z is showing a preference for new generation brands and that they prioritize digital.
“We see major shifts in consumer trends dominated by Gen Z… rise in short-form content (Instagram, YouTube Shorts)… preference for fast, 15-20 minute commerce delivery (Blinkit, Zepto)… rise of D2C brands… discovery of new food options through food delivery apps (Zomato, Swiggy),” the report notes, adding that this has led to brands building deeper connections with Gen Z.
Generation Z has a significant consumption margin and contributes about 17 percent of India’s total consumption.
“Gen Z has not only been a mobile-first generation, but also an app-first, swipe-up generation. Time spent on smartphones has increased by 60 percent,” according to Bernstein.
Gen Z behavior has helped expand Internet use cases by driving monthly/daily active user (MAU/DAU) growth across app ecosystems.
“D2C brands are growing faster than traditional FMCG brands (3-4 years vs. 10 years) thanks to the purchasing power of Gen Z customers. They have been able to reach Gen Z customers through social media,” the report notes.
India is Meta’s largest global presence across its app universe (Facebook, Instagram, WhatsApp, FB Messenger), he said, adding that fast commerce platforms like Blinkit and Zepto are enabling digital brands to reach Gen Z customers, rapidly driving growth.
These general trends are believed to benefit certain digital-first companies that focus on large consumer areas.
The report highlighted that consumer behavior, preferences and adoption differ across three major consumer cohorts: Generation Z, Millennials and Generation X.
“Gen Z prefers categories that are digitally native and app-first, as well as categories like fast commerce, food delivery, short-form video, edtech, athleisure, co-living and next-generation D2C brands,” the report noted.
This is very different from millennials who prefer e-commerce, multiplexes, OTT, casual wear and rentals; and generation X who are inclined towards offline retail, malls, kiranas, office wear, Bollywood movies, home/real estate buying, or the baby boomer generation who prefer kiranas, home-cooked food, traditional clothing and are more inclined towards saving.
D2C brands are differentiating themselves through customer need identification, marketing, technology and specialized operations. At the same time, multiple untapped niche categories with white space have presented a unique opportunity for D2C brands to thrive in India, according to the Bernstein report.
First published: September 8, 2024 | 14:44 IS
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