In 2025, Gen Z’s direct spends will amount to $250 billion: Snap Inc. and BCG's latest report

Collective spending power of Gen Z has reached $860 billion and is expected to surge to $2 trillion by 2035 with this cohort's direct spends amounting to $250 billion in 2025, a new report has shown.

The report titled, "The $2 trillion opportunity: how Gen Z is shaping the new India" by Snap Inc in partnership with the Boston Consulting Group (BCG) finds that Gen Z is far from a homogeneous group and should be at the top of the agenda for businesses and marketers alike.

Currently, out of Gen Z’s total spending power of $860 billion, approximately $200 billion comes from direct spending—money they earn and spend themselves—while $660 billion comes from influenced spending, which includes purchases influenced by their recommendations or preferences.


By 2035, these figures are expected to change dramatically, with direct spending projected to reach $1.8 trillion, implying that every second rupee of consumer spend in 2035, will be driven by Gen Z, the report stated.

"Gen Z is already driving 43% of India’s consumer spending," Nimisha Jain, Senior Partner and Managing Director at BCG India said. "Their influence is not limited to select categories – it cuts across categories ranging from fashion, eating out, to automobiles and consumer durables. It is important for marketers to take note that this generation is driven by unique values and beliefs and therefore have distinctive purchase behaviours, however we noticed that only 15% of brands we spoke to are actively taking steps to tap into this opportunity."

As per the report, Gen Z is impacting significant spending across categories such as 50% of total spending on footwear, 48% on dining, 48% on out-of-home entertainment, and 47% on fashion and lifestyle.

Jain added that for businesses, understanding and authentically engaging with Gen Z isn't just good to have, it is necessary for winning today and will be imperative for survival tomorrow. "It is here and now," she emphasised.

The report has found that one of four Gen Z are already in the workforce and that by 2025 every 2nd Gen Z will be earning.

It adds that while Gen Z buys as many times as Millennials, they are 1.5 times more likely to research their purchases.

With 90% of its daily active users aged 13-34, the report said Snapchat is a platform that is popular amongst this demographic.

“Gen Z will be the biggest contributor to India's consumption growth driving $1.8 trillion worth of direct spend by the year 2035," Pulkit Trivedi, Managing Director, India, Snap Inc., said. "As a platform that serves the Gen Z audience, we look forward to working with brands and businesses to harness this growth potential.”

The findings of the report were based on primary research done with about 1000 parents to assess the right degree of influence and around 1200 Gen Zers and millennials to discern their defining values and purchase behaviour - blended with BCG and Snap’s joint experience in this space, the companies said.

As per the findings, 77% of the Gen Z cohort find using augmented reality and interactive visuals more engaging, which the companies said demonstrates a greater need for brands to create immersive content.

"They’re (Gen Z) all about “shopcializing” — sharing shopping experiences with their inner circle via photos or video calls. This “phygital” blend of online and offline shopping is so seamless that one out of two Gen Z are likely on the phone checking wish lists or creator pages online while in-store - far surpassing the 32% of millennials," the report stated.