In tandem with the population growth, consumer spending is on the rise in India, expected to grow to $3.6 trillion (Dh13.2tn) by 2020 - four times what it was a decade earlier. AFP
In tandem with the population growth, consumer spending is on the rise in India, expected to grow to $3.6 trillion (Dh13.2tn) by 2020 - four times what it was a decade earlier. AFP

How millennials are changing India's market dynamics



Assetz Property Group in the Indian city of Bangalore has noticed a significant change in the demographics of its home buyers, something which forced the real estate developer to rethink how it designs its properties.

“We see more customers in the 25-to-35-year age group looking to buy real estate than we did a decade ago,” says Rohit Cariappa, the business's director of sales. “These customers are tech savvy, culturally diverse, well-travelled and high-income urban dwellers, working in new technology jobs and open to new concepts and ideas.”

This new generation of home buyers has prompted the company to plan and design some of its flagship properties to meet their expectations and demands. It has done this by adding Wi-Fi zones, fitness facilities such as beach volleyball, as well as introducing eco-friendly elements.

Assetz isn’t alone. Brands targeting India are finding they have to adapt their strategies to appeal to millennials, given their sheer numbers and spending power.

“Millennials have changed the way brands look at and reach out to customers,” says Prasad Shejale, the co-founder and chief executive of Logicserve Digital, a digital marketing agency based in Navi Mumbai. “Many consumer brands are increasingly targeting millennials in India. Along with smartphone and retail industries, various other sectors including auto, real estate, telecom and finance are also launching products to target the Indian millennial.”

India has 400 million millennials – defined as those born after 1982 – making up a third of the population and 46 per cent of the country's workforce, according to a report by Morgan Stanley.

Millennials have already become the chief wage earners in most Indian households, with their income contributing to 70 per cent of India's total household income, the report reveals. India will become the country with the world's youngest population by 2020, with a median age of 29, according to the investment bank.

In tandem with the population growth, consumer spending is on the rise in India, expected to grow to $3.6 trillion (Dh13.2tn) by 2020 – four times what it was a decade earlier, according to the India Brand Equity Foundation.

Like many companies that do not want to miss out on this opportunity, Samsung is among the brands striving to cater to Indian millennials.

Next month Samsung will launch a new range of affordable smartphones in India, called the M series, all priced under 20,000 rupees (Dh1,031), to fend off competition from Chinese smartphones brands such as Xiaomi and win back customers in India.

“It’s aimed squarely and entirely at millennials who form a third of India’s 1.3 billion population and comprise half of the country’s online shoppers,” said Asim Warsi, a senior vice president at Samsung India, Bloomberg News reported.

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Although incomes are rising in India, the country's per capita income was 112,835 rupees in the financial year to the end of last March, according to official data. This is far below China, where per capita income is above $7,000. This makes India a highly price-sensitive market.

Nishank Joshi, the chief marketing officer of Nexus Malls, the Indian retail portfolio arm of investment firm the Blackstone Group, explains that India is becoming increasingly competitive for consumer goods companies.

“Any brands which need to survive and eventually grow will have to sit back and take notice of the millennial,” says Mr Joshi. “Brands will have to change their guard, not just because of the influx of other international labels making their debut in India, but also because there are several Indian home-grown companies which have caught the pulse of the Indian youth and are creating the same touch and feel in their product that international brands provide, albeit at a far more affordable cost.”

In November, the captain of India's national cricket team, Virat Kohli, launched a retail product brand called One8, including clothing and accessories that targets millennials.

As part of this, the brand has recently launched a range called One8 Fragrances.

“As our category is a highly aspirational one, millennials naturally become one of our key focus consumer groups and our research and development team stresses a lot of importance on capturing their choices, likes, requirements and acceptance while developing any new products,” says Jinesh Mehta, the chairman of Mumbai-based Scentials, which has the license to develop, manufactures and market, the range of One8 men's grooming products and specialises in creating celebrity-led beauty brands.

“With higher disposable incomes the ecosystem is changing and the consumer is willing to try new products. Their decisions are based more on quality, trends, convenience, health and well-being, and above all value for money.”

As well as how they design and price their products, brands are also having to adapt how they advertise their offerings to the Indian population.

“Young consumers are prompting companies to re-jig their marketing strategies,” says Mahesh Singhi, the founder and managing director of Singhi Advisors, an investment banking firm based in Mumbai.

Companies are increasingly using the digital marketing “to make headway with this generation”, says Aparna Mahesh, the chief marketing officer at BankBazaar, an Indian online marketplace for financial products.

“They are very different from the generations before them,” says Ms Mahesh. “For one, they are the first generation who were digital natives. They have seen technology grow, change, and evolve with them, and have made themselves at home in the digital world, so influencing them is markedly different.”

She explains that Bank Bazaar focuses on social media for much of its efforts to promote its own brand. The company's major marketing campaigns have been conducted completely on digital platforms.

India has the world's second largest number of internet users after China, and this number is continuing to grow, with three-quarters of Indian adults still to move online, according to the Pew Research Center.

Cox & Kings, one of the world's oldest travel companies, is another firm that is quickly adapting to the demands of Indian millennials.

“There's a continuous rise in the number of millennial leisure travellers from India especially among the young professionals who are travelling around the globe,” says Karan Anand, the head, of relationships at Cox & Kings. “Unlike the older consumers who tend to consider travel a luxury, millennials view travel as an essential component to their life experience which is why they are receptive to the new experiences and unconventional destinations.”

He explains customers from his generation tend to take frequent weekend breaks and go on holiday at least once every six months.

“Millennials have grown accustomed to strike a balance between the hectic work schedule and family time,” he says.

India is expected to have 50 million outbound tourists by 2020, according to the United Nations World Tourism Organization.

To cater to millennial Indian travellers, Mr Anand explains that Cox & Kings has added new brands to its portfolio like Trip 360 adventure tours and Self-Drive 365, as well as glamping, or luxury camping.

Clearly companies from all consumer sectors in India are trying to keep up with what is a fast-paced journey to new territories to win over the country's young population.

Quick pearls of wisdom

Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”

Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.” 

LILO & STITCH

Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders

Director: Dean Fleischer Camp

Rating: 4.5/5

How to watch Ireland v Pakistan in UAE

When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.

Who has been sanctioned?

Daniella Weiss and Nachala
Described as 'the grandmother of the settler movement', she has encouraged the expansion of settlements for decades. The 79 year old leads radical settler movement Nachala, whose aim is for Israel to annex Gaza and the occupied West Bank, where it helps settlers built outposts.

Harel Libi & Libi Construction and Infrastructure
Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.

Zohar Sabah
Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.

Coco’s Farm and Neria’s Farm
These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

ICC Women's T20 World Cup Asia Qualifier 2025, Thailand

UAE fixtures
May 9, v Malaysia
May 10, v Qatar
May 13, v Malaysia
May 15, v Qatar
May 18 and 19, semi-finals
May 20, final

Company%20Profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20myZoi%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202021%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Syed%20Ali%2C%20Christian%20Buchholz%2C%20Shanawaz%20Rouf%2C%20Arsalan%20Siddiqui%2C%20Nabid%20Hassan%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2037%3Cbr%3E%3Cstrong%3EInvestment%3A%3C%2Fstrong%3E%20Initial%20undisclosed%20funding%20from%20SC%20Ventures%3B%20second%20round%20of%20funding%20totalling%20%2414%20million%20from%20a%20consortium%20of%20SBI%2C%20a%20Japanese%20VC%20firm%2C%20and%20SC%20Venture%3C%2Fp%3E%0A
UK-EU trade at a glance

EU fishing vessels guaranteed access to UK waters for 12 years

Co-operation on security initiatives and procurement of defence products

Youth experience scheme to work, study or volunteer in UK and EU countries

Smoother border management with use of e-gates

Cutting red tape on import and export of food

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

MISSION: IMPOSSIBLE – FINAL RECKONING

Director: Christopher McQuarrie

Starring: Tom Cruise, Hayley Atwell, Simon Pegg

Rating: 4/5

RACE CARD

6.30pm: Handicap (Turf) US$175,000 1,000m
7.05pm: Al Bastakiya Trial Conditions (Dirt) $100,000 1,900m
7.40pm: Al Rashidiya Group 2 (T) $250,000 1,800m
8.15pm: Handicap (D) $135,000 2,000m
8.50pm: Al Fahidi Fort Group 2 (T) $250,000 1,400m
9.25pm: Handicap (T) $135,000 2,410m.

Series result

1st ODI Zimbabwe won by 6 wickets

2nd ODI Sri Lanka won by 7 wickets

3rd ODI Sri Lanka won by 8 wickets

4th ODI Zimbabwe won by 4 wickets

5th ODI Zimbabwe won by 3 wickets

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Building boom turning to bust as Turkey's economy slows

Deep in a provincial region of northwestern Turkey, it looks like a mirage - hundreds of luxury houses built in neat rows, their pointed towers somewhere between French chateau and Disney castle.

Meant to provide luxurious accommodations for foreign buyers, the houses are however standing empty in what is anything but a fairytale for their investors.

The ambitious development has been hit by regional turmoil as well as the slump in the Turkish construction industry - a key sector - as the country's economy heads towards what could be a hard landing in an intensifying downturn.

After a long period of solid growth, Turkey's economy contracted 1.1 per cent in the third quarter, and many economists expect it will enter into recession this year.

The country has been hit by high inflation and a currency crisis in August. The lira lost 28 per cent of its value against the dollar in 2018 and markets are still unconvinced by the readiness of the government under President Recep Tayyip Erdogan to tackle underlying economic issues.

The villas close to the town centre of Mudurnu in the Bolu region are intended to resemble European architecture and are part of the Sarot Group's Burj Al Babas project.

But the development of 732 villas and a shopping centre - which began in 2014 - is now in limbo as Sarot Group has sought bankruptcy protection.

It is one of hundreds of Turkish companies that have done so as they seek cover from creditors and to restructure their debts.

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

Read part one: how cars came to the UAE

THE BIO

Favourite book: ‘Purpose Driven Life’ by Rick Warren

Favourite travel destination: Switzerland

Hobbies: Travelling and following motivational speeches and speakers

Favourite place in UAE: Dubai Museum

MATCH INFO

Uefa Champions League quarter-final, second leg (first-leg score):

Manchester City (0) v Tottenham Hotspur (1), Wednesday, 11pm UAE

Match is on BeIN Sports

Our legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

The National's picks

4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

The five new places of worship

Church of South Indian Parish

St Andrew's Church Mussaffah branch

St Andrew's Church Al Ain branch

St John's Baptist Church, Ruwais

Church of the Virgin Mary and St Paul the Apostle, Ruwais

 

The specs
Engine: 2.0-litre 4-cyl turbo

Power: 201hp at 5,200rpm

Torque: 320Nm at 1,750-4,000rpm

Transmission: 6-speed auto

Fuel consumption: 8.7L/100km

Price: Dh133,900

On sale: now 

Our legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

Moon Music

Artist: Coldplay

Label: Parlophone/Atlantic

Number of tracks: 10

Rating: 3/5

Retirement funds heavily invested in equities at a risky time

Pension funds in growing economies in Asia, Latin America and the Middle East have a sharply higher percentage of assets parked in stocks, just at a time when trade tensions threaten to derail markets.

Retirement money managers in 14 geographies now allocate 40 per cent of their assets to equities, an 8 percentage-point climb over the past five years, according to a Mercer survey released last week that canvassed government, corporate and mandatory pension funds with almost $5 trillion in assets under management. That compares with about 25 per cent for pension funds in Europe.

The escalating trade spat between the US and China has heightened fears that stocks are ripe for a downturn. With tensions mounting and outcomes driven more by politics than economics, the S&P 500 Index will be on course for a “full-scale bear market” without Federal Reserve interest-rate cuts, Citigroup’s global macro strategy team said earlier this week.

The increased allocation to equities by growth-market pension funds has come at the expense of fixed-income investments, which declined 11 percentage points over the five years, according to the survey.

Hong Kong funds have the highest exposure to equities at 66 per cent, although that’s been relatively stable over the period. Japan’s equity allocation jumped 13 percentage points while South Korea’s increased 8 percentage points.

The money managers are also directing a higher portion of their funds to assets outside of their home countries. On average, foreign stocks now account for 49 per cent of respondents’ equity investments, 4 percentage points higher than five years ago, while foreign fixed-income exposure climbed 7 percentage points to 23 per cent. Funds in Japan, South Korea, Malaysia and Taiwan are among those seeking greater diversification in stocks and fixed income.

• Bloomberg