The big Gen Z market taking over how India spends, saves and strategises

India's consumption economy has quietly entered a new generational phase. For the first time, its youngest generation—from schoolgoers to those just starting their careers—is also its biggest spending force.

India's 377 million Gen Zs, born between 1997 and 2012, already account for 43% of the country's consumption spending, worth about $860 billion, according to a joint report by Boston Consulting Group (BCG) and Snap Inc.

By 2035, Gen Z's spending is projected to more than double to $2 trillion. That would be roughly half of India's total consumption spending that year, which BCG projects at $3.9 trillion.


The more revealing story, though, is not how much this generation spends, but how differently it spends, invests, borrows for a car and shops for jewellery, and why brands built around millennials are now rewriting their playbooks.

Also read: Gen Z employees seeking more say in how they work, making companies rethink strategy

As a cohort, India's Gen Z is larger than the total population of the US, according to the BCG-Snap report. Only one in four is currently working, though that share is expected to climb to 36% by 2030 and 47% by 2035.

That gap between population and paycheque explains why much of Gen Z's spending power today, $660 billion of the $860 billion, is not really its own money. It is "influenced" spending as in many case a dependent GenZ-er picks the brand or the app, and a parent pays.

By 2035, as more of the cohort starts earning, that balance flips almost entirely, with 93% becoming direct spending from their own income.

Where the money is going

A Kotak Mutual Fund blog on "The Gen Z Effect on Consumption" estimates India's Gen Z population closer to 400 million, or 28% of the country, and expects more than half of Indians to be Gen Z or Gen Alpha by 2029. It also says that more than 40% of households will be upper middle class or above, defined in the blog as annual household income above $9,600.

The broader consumption data suggest that Gen Z is part of a wider shift towards non-food spending. Non-food items now account for 60.32% of urban household spending, up from 57.38% in 2011-12, per MoSPI's Household Consumption Expenditure Survey (HCES) 2023-24.

In practice, that means categories like conveyance and durable goods are eating a bigger share of the household wallet than they did a decade ago: conveyance has risen to 8.46% of urban monthly spending from 6.52% in 2011-12, and durable goods to 6.87% from 5.60%.

Deloitte's Anand Ramanathan, Partner and Consumer Industry Leader for South Asia, is more cautious about how much of this to credit to Gen Z alone. "Confidence should be high that Gen Z is an important force in India's consumption economy, but lower in any claim that attributes the entire increase in consumption to this generation," he said. He calls Gen Z "an accelerator within this broader transition," pointing instead to India's urban population approaching 600 million by 2030 as the real driver.

BCG's Kanika Sanghi agrees: the shift towards non-food spending, she said, "is a general overall trend," tied to rising household affluence rather than being specific to Gen Z.

The categories doing the heavy lifting

Where Gen Z's fingerprints are hardest to miss is in what it actually buys. Roughly half of every rupee spent in India on footwear, eating out, out-of-home entertainment, travel, OTT subscriptions and fashion can be traced to a Gen Z buyer, direct or influenced, according to the BCG-Snap report.

Beauty, meanwhile, accounts for a smaller slice of Gen Z spending, at 44%.

However, a Redseer report titled “India BPC 2030: Growth, Shifts and Opportunities” expects India's beauty and personal care market to nearly double to $40 billion by 2030. Quick commerce, which now accounts for about 15% of online beauty sales, is expected to capture almost 40% by then. Redseer estimates that Gen Z and Gen Alpha will drive close to half of all beauty spending by 2030.

The same generation is investing early

India's investor base has grown younger. The share of stock market investors under 30 rose from 22.6% in March 2019 to 38.9% by July 2025, pulling the median investor age down from 38 to 33, according to Reserve Bank of India data cited by the India Brand Equity Foundation (IBEF).

Millennials and Gen Z together hold nearly half, 48%, of India's mutual fund assets, according to IBEF, at a time when the industry's total assets under management stood at about Rs 75.35 lakh crore ($862.64 billion).

Kotak Securities MD and CEO Shripal Shah, citing NSE's Market Pulse for July 2026, said investors under 30 now make up 59% of new registrations, up from 52% in FY20.

"They are DIY by default... they carry more risk appetite than the generation before them... and they move fast, unwilling to spend days on a decision they expect to make in minutes," Shah said, adding that the real challenge now is the quality of that fast decision, not access to markets.

BCG's Sanghi attributes this to a generational openness that has little to do with money itself: "Gen Z is a lot more open to change, trying things. Dabbling in markets is one way it is showing up."

Kotak Mutual Fund's research also flags a generational payment habit: Gen Z prefers UPI and debit cards for everyday spends, is cautious with credit cards, and is an early adopter of "Buy Now, Pay Later."

Also read: Three in four Gen Z professionals put work-life balance ahead of leadership titles: Emeritus report

The same pattern shows up in car showrooms. BMW India president and CEO Hardeep Singh Brar told ET Online that the brand's luxury buyer base is no longer dominated only by established corporate executives, doctors and business owners, with younger professionals, tech entrepreneurs and startup founders increasingly entering the segment.

"Gen Z and the younger customers love BMW more than anything else because they love to drive themselves," Brar said, describing it as a "new segment" alongside BMW's traditional buyers of "doctors, the corporate team and the entrepreneurs.”

Credit is often an early entry point for Gen Z into India's formal financial system. Gen Z accounted for 41% of the country's new-to-credit borrowers in 2024, more than any other generation, according to a TransUnion CIBIL report published in March 2025.

Credgenics co-founder and CEO Rishabh Goel says that sequence, a loan before a savings account, is the reverse of how their parents built credit. "For a lot of Gen Z, credit isn't the last step in a financial journey; it's the first," he said. "Once that comfort with EMIs is set early... a luxury SUV on a 5-year EMI doesn't feel like a stretch; it feels like the next line item."

Jewellery gets the same makeover

A shift towards younger, design-led choices is also playing out in a category long associated with weddings and special occasions.

Kotak Mutual Fund's research names Gen Z's preference for affordable, lightweight, better-designed daily-wear jewellery, alongside rising numbers of working women, as key drivers behind BlueStone's growth: the second-largest player in India's lifestyle jewellery retail space grew its revenue market share from 17.7% in FY19 to 24.6% in FY25 on daily-wear, design-led pieces rather than heavy bridal sets.

The lifestyle jewellery segment is now expected to grow 16-18% a year through 2029, faster than wedding jewellery. The same research names Titan's newer brand, beYon, as explicitly targeting Gen Z with lab-grown diamonds and transparent pricing.

Skincare has followed a similar script. Ramanathan says brands have moved from broad beauty promises to "ingredients, formulation, efficacy and verifiable product information," with 74% of consumers now reading ingredient labels and 44% paying a premium for cleaner formulations in the last six months, though most cap their premium at around 10% or less.

Sanghi is direct about who is really driving that change: "Product, pricing or marketing playbook is just following the change in consumer ... Brands are only responding to that."

The optimism has limits, though. Goel warns the real risk is not today's spending but tomorrow's credit history: small habits like high card utilisation, formed this early, tend to compound over time. And Ramanathan's bigger concern for brands is not overestimating Gen Z, but underestimating its reach: as it comes to make up half of India's online shoppers by 2030, that growth will be "geographically dispersed... and shaped by wider choice, convenience and locally relevant price points," well beyond India's metros.