The Indian money tale: game of chance, loss of frugality, high consumption
Speculating on the mindset shifts on money with tech revolution and expanding possibilities around consumption
Recently on an auto rickshaw ride from Navi Mumbai to Chembur in the metropolitan city of Mumbai, India; I happened to seek help from my humble auto-rickshaw or tuk-tuk driver as the westerners would know of it. Incidentally, my phone stopped showing up any presence of screen although it was sufficiently charged. Some kind of a tech lag. The rickshaw driver quickly geared up with a B-type and a C-type charger and asked me about what phone I was using. On conversation he happened to mentioned about a recent phone purchase he made online for a decently high cost on a Buy now, pay later EMI scheme. He was pleasantly happy about using his newly bought phone, and insisted me on paying him instant cash instead of my usual postpaid plan on the commute rental platform.
My further conversation with him made me join some dots with some other such conversations and folks from different walks of life I met and spoke to in the realm of UX Research over the last two years in the pre-pandemic, pandemic and endemic world. This article is based on my rough speculation on behavioural aspects around money and life with the Indian populace interacting with 300+ Indian consumers across verticals over the course of 2020 and 2021.
Frugality has been at the core of the traditional Indian value system because the basic physiological needs were still not met. Substantially today too, those needs aren’t met at a practical level, but the options to make ends meet have grown wider, and so has the debt.
Gone are the days where children would stack a couple of coins in a piggy bank and their parents within fixed deposits, we’re in a time of high consumption.
The shift has been gradual. India is a diverse and expanding populous. Today it is confusing to define and describe the middle class — who do you truly call middle class? What is the real economic classification of the Indian middle class with the youngest lot in the family, and the GenZ starting to earn their own money? How has the money conversation changed over time?
Debt has become more enticing and easily, abundantly available
Household debt has jumped to 37.3% GDP. What this tells us is the raging popularity of offers, coupons, digital money and lending options that are abundantly available and endorsed at the moment. The ‘buy now, pay later’ options are not just available for bigger appliances where you had to wait long lines to get your paperwork done and needs financed with a handsome interest, now its simple with almost negligible or ‘zero’ interest and available even when you want to buy a meal, a sock or a bottle of water!
To compete with peers, status is key: class no more defines ‘haves’ and ‘have nots’
Owning the most latest of gadgets, appliances, clothing, and ‘updating’ it as a clockwork routine has become a status symbol. The idea of fast consumption has become like a race with your peers. Even when we look at the other side with ‘sustainable’ ‘slow’ design, the race is not for the slow design concept by itself, but counterintuitively about how pricey the product costed. Frugality is no more about how much you earn and save, but about how miserly you are with your money. It’s about the attitude you carry without depending on how much you truly make.
The uncertainty and ambiguity of life has creeped up into extreme, ‘all or none’ mindset;
The core concept of money has gone from a practical number to show what one can buy and what one can’t, to a rather state of mind and only a determinant of the present. Across generations, the covid situation played out a rather murky game of surfacing insecurities. Folks turned into massive penny pinchers trying to save up every possible single penny for the ‘worst case scenario’ and continue to do so, while others became carefree with their money to ‘cease the day’ as it comes, as the idea of life surfaced as a temporal mindset.
;….stability chanced for possibilities of luck, gig and hustle
….in both the cases, folks looked at maximising potential of their money, either by massive consumption to buy everything they ever wanted and desired, or by investing deeply into markets or cryptic currencies that promised high returns. The fin-tech giants emerged in this period with almost the entire IPL match being covered with adverts about smart financial planning with instruments that help maximising money or playing a game of chance* or skill. Also ways to earn money at home with reselling, social selling and multiple such avenues luring people to take a chance at gig economy. While the need for security was massive during the start of the Covid pandemic in 2020 — with constant lay-offs, the great resignation in 2021 is a response to the same as people found new ways to support themselves without having to surrender and lose options when an employer lays them off. The certainty of a full-time job was rather questionable.
There is a popular Indian saying, ‘jitni chadar hai utne hi pair failao’ which literally translates to ‘only spread your legs as far as the blanket covers you’ (blanket metaphorized as money / resources) to say spend only based on your capacity.
In the current world, it feels flipped to ‘spread your legs to your wish, the blanket will stretch itself, if you ‘play’ it right!
