MILLENNIAL KEY LEARNINGS — THE MAVERICKS — December 3rd 2019

From armchairs to iPhones, India’s millennials rent it all

• One of a growing number of Indian millennials bucking traditional norms and instead opting to rent everything from furniture to iPhones. “Millennials in my age bracket want freedom and earlier what was seen as stability is now seen as a sign of being tied down”
• For 4,247 rupees ($60) a month, the Mumbai-based executive furnished his entire home, sourcing furniture for his bedroom, living room and dining area as well as a refrigerator and microwave. This system allows me to take more risks… And in case things go south, we can wrap up without losing a large tranche of investments and begin elsewhere.
• ‘Investing in experiences’ — From ride-hailing apps to communal office spaces, the sharing economy is a global phenomenon that is expected to generate annual revenues of $335 billion by 2025, according to PricewaterhouseCoopers.
• In the US, websites such as Rent the Runway and Nuuly offer fashion-conscious customers the option to try rather than buy clothing, while in China, consumers can rent BMWs via a tap on their smartphone.
• In India, the boom has fuelled the rise of new furniture and appliance-renting businesses such as Furlenco, RentoMojo and GrabOnRent — and even jewellery rental apps — in recent years.

Source: The Economic Times

Opinion | India’s millennial credit card boom runs into Mukesh Ambani

• For every 100 people in India, there are only three credit cards. A comparable penetration figure for the US is 320. Statistics like these suggest that India’s first initial public offering of a credit card issuer is either an opportunity with boundless prospects — or a victim of arrested development. Which is it?
• The upcoming sale of shares in SBI Cards and Payment Services Ltd. will give investors a chance to find out. Between them, the controlling shareholder, State Bank of India (SBI), and its 26% partner, Carlyle Group, plan to sell up to 130.5 million shares.
• Yet only about 5% of Indians’ consumption per capita takes place through credit cards. After growing 12% annually over four years, average spending per card is stalling. While a slowdown is only to be expected given a sharp decline in economic momentum, the reason has more to do with the merchant than the spender.
• E-commerce, which is increasingly the most obvious use of a credit card, will account for barely 7% of India’s $1.2 trillion-a-year retail industry by 2021, according to Deloitte Consulting. Another 18% will go to malls, department stores and other forms of organized retail. But three-quarters of the market will remain with mom-and-pop stores.

Source: Mint

How indebted are millennials?

• Millennials spend beyond their means. | Millennials binge on debt. | In general, millennials handle their finances irresponsibly. These are some of the stereotypical images of millennials that popular culture, financial planners and fintech firms have led us to believe. And yet, there is very little evidence to support such stereotypes.
• While millennials are indeed more indebted than either pre-millennials or post-millennials, the levels of indebtedness are not alarmingly high, shows fresh data from the latest round of the YouGov-Mint Millennial Survey.
• The survey also shows that it is the richer lot among the millennials who is likely to be indebted, busting the myth of the irresponsible millennial. Compared to the other age groups, millennials are more likely to take loans to purchase consumer durables (or gadgets) and for social obligations (to fund wedding, etc.), shows the survey.
• Among pre-millennials, home loans are the biggest reason for indebtedness and, among post-millennials, education loans are the biggest reason for indebtedness. Among both millennials and pre-millennials, a significant proportion seem to have taken loans to meet medical emergencies, suggesting the lack of adequate medical cover.

Source: Mint

No social media, no FOMO for Bengaluru’s millennials

• Do you spend hours on social media posting pictures, sharing your day-to-day activities and using it as a source of information to know what’s happening around the world? Do you think social media is an inevitable part of your life? May be not, at least that’s what Bengaluru’s millennials believe. City youngsters tell us what keeps them away from social media and how the fear of missing out (FOMO) doesn’t affect them.
• While many say that being on social media platforms helps them connect with people and stay abreast with the latest information, they say that there are other sources of information too.
• No social media means that these students often have plenty of free time on hand, which they prefer spending on something productive.
• ‘Nothing on social media seems genuine’ There is so much negativity and toxic material online that it didn’t make any sense for me to continue being on these platforms. People are on social media only for online acceptance and to compare the number of likes their posts get. “People create an alternate universe for themselves, where they are seeking approval from others in terms of the number of likes.

Source: Times of India

Digital Experience is the Deal Breaker for Millennial Travelers of India: Travelport Research

• Survey of 23,000 people around the world, including 2,000 in India concluded that digital solutions increasingly influence decision making and travel management. Travelers want value for money, more control and transparency for personalization
• It revealed that Indian millennial travellers were one of the world’s most likely (84%, above the global average of 71%) to consider it important that an airline offers a good digital experience — for instance, offering online check-in and gate information.
• Similarly, Indian millennials were the world’s most likely to consider the digital experience when booking hotels (e.g. having a room key on their smartphones) — 82% in India considered it important, well above the global average of 58%.
• Commenting on the findings of the research, Sandeep Dwivedi, Chief Operating Officer, InterGlobe Technology Quotient, said: “The findings of the research clearly establishes that Indian millennials have a strong penchant for a superior digital experience while planning their travel. The travel ecosystem in India is headed towards a digital-first future and we, working with Travelport, are committed to innovate and develop solutions that can help the industry cater to the expectations of the modern traveller.”
• The study also finds that Indian users are looking for a value for money deal — only 5% of them reported always going for the cheapest price (global average of 18%). To get the best deals, they will analyze travel review sites like TripAdvisor (60% in India vs 42% globally) and price comparison sites such as Kayak.com (50% in India vs 38% globally). 93% of Indian travellers also look forward to getting insights from booking sites to discover new destinations.

Source: Business World

Investment-Shy Indian Millennials Are Finally Looking To Grow Their Wealth With Fintech Platforms

• The share of millennials investing in mutual funds in the Indian market has risen steadily in the past few years. Investment platforms offer user-friendly ways for new investors to invest in mutual funds, stocks and other plans. Apps such as Groww have leveraged technology and content to remove investing roadblocks
• Retail investors in India, have the world at their fingertips with smart investment apps such as Groww, Paytm Money, ETMONEY, Zerodha and others that lets customers invest from the comfort of home, with minimal human intervention and inconvenience. They have particularly found appeal amongst millennials who are increasingly participating in equity markets directly or via mutual funds.
• It is not news that millennials are changing the face of the market for many sectors thanks to rampant tech adoption. With millennials making up over 47% of the working population in India, this segment is bound to dominate the market. Considering the fact that 91% of millennials are more comfortable with managing their own money — there is an increased need for digital platforms to cater to this cohort.
• If trends are to be believed, millennials are more interested in investing in equities than any other asset class and the preferred way of doing this is through fintech apps and solutions. Even among this set, the subset of older millennials is more geared towards equity investing or stock markets. While 48% of older millennials invested in equities, the figure was just 4% in younger millennials. This is attributed to two facts — the lower income of younger millennials and the tendency to save less in this subset.

Source: Inc42