Sucheta Dalal :Social trends in the New Year
Sucheta Dalal

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Social trends in the New Year  

Jan 2, 2006

An important feature of 2005’s economic growth was that it put more disposal income into the hands of younger people. BPOs, aviation, hotels, tourism and the food and beverage industries expanded rapidly as did jobs in manufacturing, management and media. IT companies are on a massive recruitment spree, yet there is already a serious shortage of qualified, committed, employable persons in most commercial and industrial cities.


As businesses struggle with rising wages and high employee attrition rates, the big spending habits of the 20-and-above class has been the basis of expansion plans for a wide array of goods and services ranging from finance to durables and lifestyle products.


The empowerment of this generation, which is the delight of all marketers, is a slow demographic change that is currently restricted to the large metros but is rapidly spreading to smaller cities and large towns.


When India was a closed economy burdened by licences, permits, high taxes and perpetual shortages, it was rather simple to describe the urban-rural divide in terms of India v/s Bharat. The perception was that India, representing urban, educated Indians was moving to a different tune and was completely cut off from the simple needs and aspirations of agriculture-dependent rural Bharat.


Today, the gap between the attitudes and perceptions of different generations of Indians are so dramatically divergent that marketers have come up with new defining criteria to capture their target buyers. Kishore Biyani, CEO of Pantaloon Retail, India’s fastest-growing retail empire, says, 55 per cent of Indians are less than 35 years old; and many of these have been born in the 1980s and after.


These Indians, Biyani adds, have a completely different attitude to money and savings and hence their spending habits are different. They have not seen the shortage economy — ration shops, long waiting lists for telephones and gas connections and scarcity of even private sector products such as two wheelers and automobiles. This generation is now invading the job market and getting decent pay-checks.


More importantly, they do not salt away their savings for a home after retirement, a son’s education or a daughter’s wedding. Instead, they borrow now and want all of this today. They are confident of multiple employment opportunities giving them the chance to increase salaries quickly. And even when they don’t have the luxury of a good education and job opportunities, their attitudes are still different.


There are also those in their 30s, 40s and 50s who have done well for themselves and give their children all the luxuries that they did not have, either due to lack of opportunity, shortages or the Indian culture of austerity. Biyani, for instance, is entirely focussed on this demographic group to frequent his many malls, bazaars and fun places. He divides them up into India One and India Two.


India One comprises 25-30 per cent of the population, he says, which is still bigger than the entire US market. This comprises the spending class and their children. India Two is the more interesting category. They form a massive 45 per cent of the population, according to Biyani. This is the high-aspiration class, which has found a whole new opportunity for employment and training in the service sector, despite low education levels.


They are the large masses of smartly-turned out, uniformed, boys and girls who serve you with a bright smile at all the shopping malls, fast-food chains and coffee shops. To understand this market, let us look at the statistics offered by Pantaloon Retail alone.


Kishore Biyani says that 92 per cent of the people employed in his many bazaars and delivery outlets have studied up to the 10+2 level. The group already hires 10,000 people directly and another 2,000 people indirectly (in housekeeping and security services).


Pantaloon’s rapid growth across India (Biyani has identified 83 cities for the expansion of his malls) means an on-going employment of 500-odd persons every month. In order to meet his own staff and training needs, Biyani is setting up a large in-house training academy or Gurukul.


Now multiply this a few times over to include the burgeoning malls, call centres and fast-food chains (Dominos, McDonalds, Pizza Express, coffee bars etc) and you find a whole new class of Indians are getting work and an unique chance to change their destiny.


Many of these are using this break to finance higher education and complete their college degrees. Apart from the opportunities that have opened up for the 10+2 category, the service sector has expanded the job market for those who were dismissed as ‘mere graduates’ in non-professional disciplines. Suddenly, they have job options in the hotels, aviation and tourism industries or call centres.


However, the earning potential and growth trajectory of this class is hugely enhanced by their ability to speak the English language. When conspicuous consumption increases at the top of the pyramid, it is this new employment in service sectors, offering decent work places, that may temporarily keep social unrest at bay.


But the chilling reality is that it still leaves out 25 per cent of India’s vast population, which is dismissed by the service sector as ‘‘below the poverty line’’. It is important for every Indian at the top of the pyramid, especially business and industry to work at pulling this class of people above the poverty line in order to discourage social unrest and simmering discontent.


Given the daily examples of political corruption and venality, it is unrealistic to believe that the government schemes aimed at poverty alleviation, and inevitably funded out of taxpayers’ money will reach those who genuinely need help.


Until now, every major tragedy has brought out the best and most selfless aspect of Indians. But the frequency of attacks on women, the looting of passengers in railway trains and the growing nexus between criminals and politicians/law enforcement agencies makes one realise that it is in our interest to ensure we do not leave any stragglers on the road to prosperity.


-- Sucheta Dalal