Published: Mint dated 20th December 2010

Indicus Consumer Data Products

The heterogeneity that characterizes the modern Indian consumer has created a maze that marketers would like to unravel in order to target their products and services precisely. In this fortnightly series, Indicus Analytics will present the various facets of urban consumers, across geographies and socio-economic groups

There are more than two million SEC B urban households across India with a population close to 10 million. The chief wage earners in this segment are married with young children and are either school educated businessmen or skilled workers with graduate degrees. The majority of the chief wage earners are in the age group of 35-44 years and almost two-thirds are self-employed. They own their businesses predominantly in the wholesale and retail trade sector, followed by manufacturing, transport and communication. Those with salaried jobs are mostly in public administration or government service.

The education profile of chief wage earners is varied—while 33% have completed just schooling, 27% have graduate degrees. However, these would for the most part be basic bachelor’s degrees. Most bachelor’s degree courses around India do not add significantly to capabilities or skills; however, the presence of graduates in this segment points to the progress over generations. There are those in this segment who take over family businesses—it could be shops, transportation, small manufacturing units, etc. But this set of chief wage earners would in all probability be much better educated than their parents, even though they would have learnt their business skills from the older generation.

This segment includes both joint and nuclear families, but household sizes are not generally large. As this segment includes only those with young children, all households have minors, but less than a quarter have more than two children, in keeping with the trend towards smaller families. A little over one-third of households have more than five members, and in most households, there is just one earning member. Spouses have education profiles that are quite similar to the chief wage earners’; while one-third have completed schooling, a little less than one-quarter are graduates. However, just 15% of spouses are employed, leaving the majority as home-makers, an option exercised by many middle-class households with young children.

This is after all a segment in the second rung of affluence, and the head of the household is in mid-career, putting his work and family on a more stable footing. It is essentially a middle-class segment that has significant earning potential, and in these households with young children, there is an emphasis on school education. Medical expenses and food also form a major part of expenses. Consequently, when it comes to household possessions, we find a much higher penetration of two-wheelers compared with cars, higher penetration of small TVs compared with large ones, higher penetration of refrigerators compared with microwaves, and more time spent on viewing TV than the Internet or newspapers. When it comes to house ownership, nearly 60% of households already own the house they live in; the other households would be in the market looking for affordable homes.

With lower education profiles compared with SEC A, this segment has a higher proportion of households earning less than Rs.3 lakh per annum and a smaller share of affluent households. Yet, if we look at the location of affluent households, we find more in smaller towns such as Faridabad, Durg and Coimbatore than in cities such as Pune and Kolkata, where affluent SEC A households are greater in number.

If we look at the proportion of affluent households that earn more than Rs.15 lakh annually to the total households in this segment, the highest share of more than 10% is in Gurgaon, Gautam Budh Nagar, Raigarh, Vadodara, Panchkula, Faridabad and Durg. Smaller towns offer large opportunities for small manufacturing units, and trade and transport of agricultural and retail products. In these towns, those with lower education qualifications find it easier to find earning opportunities