Young and going it alone by indicusanalytics


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									                       Young and going it alone
                              Published: Mint dated 28th December 2009

This is the second in a 33-
part series, and focuses
on the young, self-
employed segment of
chief wage earners. The
series looks at 33 distinct
consumer segments
based on a categorization
of stage of life and
occupation, expenditure
and savings propensity,
family structure and

                                      Indicus Consumer Segment
In the inaugural piece in this series, we looked at segment G1,
which is the lowest in terms of skill and the youngest in terms of
life stage. This week, we look at a different end of the spectrum—
moving vertically on the skill side. Segment A1 straddles the
younger years (single alone or staying with family, or married but
still young). This specific segment comprises self-employed chief
wage earners only.
                                   A1: young entrepreneurs
                                   This segment is among the most entrepreneurial. It is a unique segment
                                   consisting of people who are all completely self-employed.
                                   The median age of the chief wage earners is 30 years and nearly 40%
                                   are unmarried. The segment itself is very small—only 85,000 households
                                   (222,000 population) out of the approximately 77 million households in
                                   urban India. The chief wage earners tend to be highly educated—as
                                   many as 96% are at least graduates. They are also young enough to be
                                   adding professional qualifications to their arsenal.
                                   The average household size in this segment is 2.6. In fact, 76% in this
                                   segment are two-member households. Only 6% have minors (children)
                                   and only 13% have elders living with them. They are also likely to be
                                   socializing much more than their older counterparts because they are not
                                   hemmed in by demands on time from children or elders. Yet, these are
                                   not in general Dink (double income no kids) couples.
                                   In almost 75% of the families, the chief wage earner is also the sole
                                   wage earner. The savings rate is around 23%.

                                          Indicus Consumer Segment
These two facts indicate that whereas the segment is easy-going, it is
not entirely spendthrift and has one eye firmly on savings and
investments; perhaps, as a risk cover for its chosen vocation of
entrepreneurship. The segment is likely to seriously consider new
investment ideas.
The age profile is dominated by the 25-34 years group (81%). This is the
segment which has high earning capacity, good savings rate and is not
burdened with immediate expense commitments.

                                     A1: Young Entrepreneurs

         Indicus Consumer Segment
However, since this is a segment exclusively of self-employed professionals, it comprises those who are
likely to be building long-term assets which may take different forms— building a company/enterprise, buying
land/apartments, or building a stock portfolio.
While wholesale and retail trade activities form the largest occupational group of 31% in this segment,
manufacturing, construction and real estate also feature high in the occupation profile.
Around 90% of this segment works in five industry sectors—real estate, computers, construction,
manufacturing and trade. Typically, the people falling within this group are heading small businesses and
grappling with challenges to grow in size.

As such, this group is naturally attractive for
marketeers of products and services related to                        A1: Young Entrepreneurs
tourism, evening or weekend entertainment
(restaurants, amusement, etc.), gadgets, personal
transport vehicles and a host of personal products—
clothing, jewellery and footwear, among others.
Since nearly 40% are unmarried, they are likely to be
aggressively networking in pursuit of enhanced
business and career opportunities. They may be
experimenting with activities such as golf and
conferences to build contacts and adventure sports
and stock trading to learn new tricks and to unwind.
In terms of household incomes, the segment straddles
virtually all the major income classes. However, the
concentration is around the Rs3.5 lakh per annum
mark, the median income being Rs3.5 lakh.
This segment is likely to expand very rapidly, and for
several reasons.
                                          Indicus Consumer Segment
                                                                         A1: Young Entrepreneurs

First, there is a surge in entrepreneurship in the country. Typically, the educated class tended to look
for employment, especially in government jobs; this inclination is changing, and changing rapidly, as
the liberalized, fast-growing economy creates more opportunities.
Second, it is increasingly possible to get good quality education part-time. This allows less qualified
entrepreneurs to graduate into this segment during the course of their career. This was happening
before too, but the pace has accelerated in recent times.
Also, not only will this segment expand rapidly, its income profile is also likely to move upwards faster
than that of other segments.
The households in this segment are open to change and relatively free to take on more risk. As
success stories abound of entrepreneurs around the country, this segment is the first to take the cue
and move ahead.

                                            Indicus Consumer Segment

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