SPENDING BEHAVIOUR IN INDIA

What do Indians spend their money on?

“Whoever said money can’t buy happiness simply didn’t know where to go shopping”. Since currencies were invented, humans beings haven’t stopped shopping. Shopping has evolved over the years and barter has been replaced by debit and credit cards. Everything started with food and clothing; however, in the 21st century, basic needs go beyond that. Today’s bare necessities include food, clothing, shelter, communication, fashion, video games and of course, fast internet connection and a smartphone.

Indians are not very different from the rest of the world; they do spend large amounts of money getting goods and services on a daily basis. The question is: what are Indians spending their money on? DealSunny has done an extensive and very methodical study on Indians and their spending behavior in order to answer that question.

DealSunny’s “Spending Behaviour In India 2016” survey collects valuable information and analyzes fascinating statistics to discover what Indians are spending their money on. Likewise, this research gives insights into Indians’ bank accounts and evaluates their current financial situation. DealSunny’s Spending Behaviour In India survey reflects DealSunny’s dedication and love for India. The survey also helps Indians to get more information and knowledge about themselves and their society from a technical point of view.


The scope of the survey involved examining trends ranging from consumers' attitudes towards their shopping and spending behavior. Divided into numerous different categories, we bring to light how simple issues like marital status or level of education can make a difference in Indians expenses. Shopping behavior involves many subjects from economic to psychological analysis, and DealSunny covered every single detail in this study.

KEY FINDINGS

What do Indians spend their money on?

  • More than 30% of Indians say they cannot afford vacation/travel.
  • Generation X spends the most money on traveling every year. Almost 25% spends more than ₹1,20,000.
  • Around half of all Indians spend ₹500 to ₹2,500 on clothes each month.
  • 75% of Indians with a household income of ₹15 lakhs or more spend ₹1,500 or more per month on clothes
  • 46% of full-time workers spend over ₹1,500 per month on clothes, for part-time workers this is 18%.
  • 21% of Indian women spend more than ₹3,000 per year on new footwear compared to 16% of Indian men.
  • 1 in 3 Indians in Central India say they can't afford eating out, as opposed to 1 in 10 in West India.
  • 35% of unqualified Indians can't afford to eat out. 10% of Master graduates have the same issues.
  • 16% of Indian women state they spend ₹3,000 or more on a date, while only 14% of men spend the same.
  • 38% of divorced Indians spend over ₹3,000 on a date. Only 10% of single Indians spend this amount.

Indians and Online Shopping

  • 70% of all Indians spend less than ₹1,990 on online shopping per month
  • People from North India spend the most when shopping online: 37% spends more than ₹1,990 every month.
  • Married Indians spend more on online shopping than single Indians.
  • Nearly 80% of all Indian millennials spend less than ₹1,990 per month when shopping online.
  • 99% of all Baby Boomers shop online while only 62% of Generation X does the same.
  • Both male and female Indians agree that the main reason for online shopping is to save time.
  • 16% of divorced Indians never shop online, while among single Indians this is only 9%.

Indians and their saving habits

  • 57% of all Indians have less than ₹5,000 in their savings account or emergency fund.
  • 54% of Generation X Indians have more than ₹50,000 in a savings account. The national average is 16%.
  • 15% of North Indians have over ₹1,50,000 saved. South: 4%, East: 6%, West: 12%.
  • Married Indians save more. 35% have more than ₹50,000 saved. Singles: 8%, In a relationship: 12%.
  • More than 1 in 3 Indians live from paycheck to paycheck.
  • 44% of North-East Indians live from paycheck to paycheck, 9% can save more than 30% of their income.
  • 80% of single Indians save less than 10% of their monthly income. Among married Indians this is 50%.
  • Almost 30% of all Indians never invest money.
  • 30% of East Indians say that the best way to invest money is by putting it in a savings account.
  • Half of all Indians financially support their family.

Indians and their borrowing / credit card habits

  • 23% of Indian Baby Boomers spend the largest proportion of their income (over 55%) on rent / mortgage.
  • 70% of East Indians state they spend less than 10% of their income on housing.
  • 65% of Indian college and high school students spend less than 10% of their income on rent / mortgage.
  • Over 70% of Generation X Indians own a credit card. (55% for Millennials and 45% for Baby Boomers).
  • Central Indians are the least likely to own a credit card while North-East Indians are most likely.
  • Indian employers rarely offer a credit card to their employees.
  • 65% of unqualified Indians own a credit card.

The Dark Side of Spending

  • Biggest financial fear of Indians: having not enough savings (33%). Second: can't support family (15%).
  • Indian Baby Boomers are the least fearsome: almost 40% say they don't believe in financial fears.
  • Over 30% of unqualified Indians don't believe in financial fears. This is double the national average.
  • Biggest financial fear of Indian part-time workers: loss of job and unable to support family.
  • The higher the household income, the more likely Indians are to use a credit card for emergency costs.
  • The majority of Indians (41%) would use savings in case of an emergency, 20% would borrow money.
  • Baby Boomers are the most likely generation to choose working more in order to cover emergencies.
  • 49% of Indians can manage their spending very well on pay day. 20% go nuts and spend more than usual.
  • 2% of Indian males and 19% of Indian females spend more than average on their payday.

WHAT DO INDIANS SPEND THEIR MONEY ON?

Although most populations across the globe can agree on certain necessary spending habits such as food, household items and essentials, it is interesting to note how different regions in the world choose to spend their expendable income – whether it is investment, clothes, dining out or travel; various demographics have varied priorities when it comes to spending. In this article, we will be taking a closer look at how Indians spend their money, and how it differs between age groups, genders and employment types.

The Wanderlust of Indians

Surprisingly, travel takes the priority for almost 50% of full-time employed Indians, who spend more than ₹30,000 on travel in a year. Of course, those who are employed in a part-time capacity naturally spend less on this luxury with only 22% diverting income in this direction – however this is still a considerable amount. On top of that list of travel spenders are 15% of Indian women who can set aside over ₹60,000 per year for traveling and vacation stays. In contrast, only 8% of Indian men spend the same amounts.

Indians and Fashion Shopping

Although fashion is considered a young person’s game, in India the 35 to 44 year old age bracket are the major buyer in this field with a whopping 22% shelling out ₹2 500 per month to extend their wardrobes with the latest trends. In some instances, this total makes up a third of their income going toward clothes. In contrast, college students, the unemployed and retired individuals choose not to spend their money on footwear, with 60-70% of these spending as little as ₹1 000 per year on new shoes.

Eating Out Habits of Indians

When it comes to dining, India does not appear to be a spending hub. In fact, 22% of Indian youths between the ages of 18 to 24 do not dine out frequently, claiming a lack of affordability, while the number drops to 14% for 35 to 44 year olds. In stark contrast to the spending figures on clothing, 5% of Indians who boasts an income of ₹15 lakhs or more still maintain that they are unable to afford dining out, while 15%  report eating out on a daily basis.

Dating Habits of Indians

Romance is definitely the order of the day in India, with 37% of 35 to 45 year old spending more than ₹3,000 per date. Clearly with the middle aged generation in India, a date is a moment to remember and takes precedence over clothes, footwear and dining out for necessity. In the quest for love, entrepreneurs take that go-getter spirit to hard with up to 11% stating that they would spend more than ₹4 500 on a single date.

These figures show an interesting pattern when it comes to spending in India, and proves that all regions have different spending habits that are heavily slanted toward their beliefs, priorities and needs. Perhaps dating may not be your number one expense, and you prefer to save up for a stunning pair of shoes, but in India the search for true love certainly takes the spending cake. And why not, it is the home of the ultimate monument to love, the world famous Taj Mahal.

INDIANS AND ONLINE SHOPPING

One of the greatest conveniences of modern living is the fact almost anything is never further than an internet search away. The same goes for shopping, and online shopping is a growing market that reaches far and wide. The convenience of browsing online for something, not to mention the privacy, and the ease of global shipping is causing more people to forgo traditional shopping. In this article we will be looking at some statistic regarding online shopping in India, and the reason for its popularity among Indians.

Indians and Online Shopping

When it comes to online shopping, gender does not play much of a role. Both men and women spend equally – up to 70% of each gender spends just under ₹1990 online in a month. Thus there is no link between gender and shopping in India, and no stereotypes apply here. Online shopping is not just for clothes anymore, even groceries can be bought online, and often it is useful when looking for something that is not locally available. It also provides a lot of privacy, meaning shoppers can buy those things they’d rather not buy in person.

In terms of spending habits, those living in Central India tend to spend the least on the internet. Statistics show that 81% spend less than ₹1,990 per month. There could be a variety of factors contributing to this, ranging from ease of access to shops, to employment and education.

Speaking of education, it would seem that higher education is also a factor here. In fact, 1 in 4 Indians with a PhD in their field report spending more than ₹6,000 on online shopping per month. This could be as a result of access to online shopping tools or time constraints.

Income is also factor for online shopping. It would appear that as income levels rise, so does the amount spent online. In fact, research shows that 31% of Indians reporting an income of more than ₹15 Lakhs per month, spend ₹6,000 of that every month online.

Online Shopping Motivations

The younger generation definitely likes to take advantage of this technology. 50% of Indian youths under the age of 18 prefer to shop online. Their main reason is that it saves time – no standing in long lines, no endless hours of browsing. All they have to do is log in, search and purchase. This really is a testament to the ease of online shopping.

Online shopping also taps into the go-to spirit that drives entrepreneurs as well their economic senses. 1 in 3 Indian entrepreneurs believe that online shopping is the more convenient and cheaper option. After all, when it comes to saving money, entrepreneurs know the ins and outs.

The world is quickly turning into a global community, and online shopping is a noted link. Gone are the days of pining for something and not having access to it. Instead, any fashion item, any type of food and any gadget can be delivered in a matter of days or weeks – not to mention the convenience of ordering your dinner online!

INDIANS AND THEIR SAVING HABITS

Setting up a decent savings account is one of those challenges that not everyone can adhere to. Though we are taught how necessary this is, it can be hard to set aside a portion of your income, especially when your salary barely covers the rent. Although saving is considered essential, it is on the decline among millennials as the cost of living keeps climbing. Across the globe, saving carries different weights, with some people prioritizing saving above all else. In this article will be taking a close look at the saving habits of Indians, looking at the amounts saved, as well the percentage of people who are able to do so. We will also be looking at investment, specifically the importance of real estate.

Saving Habits of Indians

In India, almost 80% of the population report having less than ₹25 000 tucked away in a savings account or emergency fund. However in North India, the figure does rise with 32% of North Indians having more than ₹25 000 saved up – a whopping average of 20% higher than the average found in all the other regions combined.

Education also plays a role in the sense to save, and in India, of those who have more than ₹5,00,000 saved up, 61% are educated up to a Master’s level or hold even higher degrees. However, not everyone is as privileged. It is reported that in India, 37% of the men live from paycheck to paycheck with no room for saving, and for women the figure stands at 31%. This means that saving is not a possibility, since all their income is eaten up by living expenses.

There is also a noted generational gap when it comes to savings in India. Generation X seems to be most money conscious of all generations, saving more than 30% of their income – this is the highest amount among the generations. Conversely, the millennial generation only saves 5% - although saving any money at all is encouraged, even if just a minimal amount.

When it comes to relationship status, there is also a pattern here. In India just over 20% of single people put away more than 10% of their monthly income, however the figure rises to 50% for married people – this indicates that having a family does encourage more future planning, and a dual income could also be a factor.

Indians and Investing Money

Another means to save can be found in investment. Instead of simply putting away a portion of a salary, money can grow by means of investment. This can be done through real estate, stocks or investing in a company. Here, although a monthly amount is still put away, it grows exponentially as the investment increases its worth.

In contrast to North India, those who live in South India are the least like to invest their money, with 33% admitting that they never do so. When it comes to regional spending, saving and investing, in Northern and Western India, a very popular means of investment is real estate. In fact, 22% of these people believe that this is the best way to invest their money – after all, real estate consistently rises in value. It is also one of the most popular investment methods for Indians who earn more than ₹ 15 Lakhs, with more than 25% considering this the best way to invest.

Younger generations are definitely more savvy when it comes to making their money grow. Instead of simply tucking away an amount, 20% of high school students would rather invest in stock markets. Investors no longer need to rely on investors who make guesses on their behalf, and are able to invest on their one using easy online tools.

Indians and Family Support

An interesting statistic to note is that education does equal the ability to support a family in India. Research has shown that 56% of Indians who do not have qualifications financially support their families whereas only 24% of those with a PHD do the same.

Saving is incredibly important when investing in a future beyond tomorrow, and these statistics show that although not everyone saves their money, there is a trend to do so in India. Whatever route you decide to go, make sure that you try and put something away for a rainy day.

INDIANS AND THEIR BORROWING / CREDIT CARD HABITS

Sometimes life hands you a lemon stuffed full of money, but then it expects you to return the lemon stuffed with even more money. This is known as credit or borrowing, and in some cases, this process is unavoidable – not everyone is fortunate enough to be able to afford everything cash. When it comes to financing a house, a car or sometimes a holiday, most people turn to credit. In this instance, a lender gives them the money, and agrees to have it paid back over a period of time with added interest. In this piece, we will be looking credit and borrowing as it applies in India.

Rent / Mortgages in India

When it comes to owning a home, in India the tendency is to spend less than a quarter of a salary on a mortgage or rental – which can be seen as a healthy ratio. In South and West India it is reported that 3 out of 4 people spend less than 25% on their rental or mortgage payments. Overall though, 69% of Indians that do not have a qualification spend less than 10% in contrast to those who are educated. In this instance, 47% of those with a Master’s Degree spend less than 10% on mortgage or rent, whereas only 33% of PhD graduates spend this small amount. This points to the idea that Indians are doing well in managing their housing expenses.

In terms of marital status, it has a striking effect on the amount spent on mortgages. Those who are divorced tent to spend the largest amount of their income on housing, with 18% reporting that more than 40% of their earnings on their mortgage or rental.

Credit Card Habits of Indians

It is not only housing that requires debt, there are also credit cards. Think of this as money on demand, available at any time, without needing to earn it, coupled with a hefty interest rate.  Although handy in an emergency, it can also rack up a large bill very quickly. In India, 10% of women admit to spending more than 30% of their income on their credit card bills. Interestingly, the figure for men is only 5% - significantly less.

When comes to credit cards, West India is the region with the most credit cards at 63% owning one - a whopping 5 to 10% more than in any other region. Coming in at second place is North India with a 57%. Credit cards are also used for entrepreneurial pursuits such as setting up a business, and as a result, almost 50% of Indian entrepreneurs channel more than 50% of their monthly income to credit card bills.

Money Available to Indians

How much access do Indians have on their credit cards? Credit is determined by factors such as a credit history, income and expenses and can vary from person to person. For the Baby Boomer generation, 85.71% of these respondents have access to less than ₹30,000 in credit. For single Indians, 23.78% can access credit that goes over ₹30,000, whereas with divorced Indians the number jumps to 56.25%.

These figures clearly show that there is a tendency to get into debt among Indians. Why this is the case is a topic for another day, but it could be linked to rising cost of living as well the decline in employment overall. When it comes to managing debt, never get in over your head, be wise and make sure that whatever you lend, can be paid back in due time.

THE DARK SIDE OF SPENDING

It was once said that nobody wants money, they want to spend it, unless their hobby is to collect money. This is true, since the only purpose of money is to spend it. Therefore, spending is a way of life and essential to daily living, and survival. Whether spending it on food, or clothes or housing – without money, and the spending thereof, humans would not be able exist in these economic times. In India, spending has presented a dark side, especially with rising costs and unemployment rates climbing.

Financial Fears of Indians

In India, the fear of not having enough money to support a family is more prevalent among women at 16%, whereas with men it is 12%. This fear is entirely understandable, as being responsible for a family is an expensive and stressful job. For those Indians in a relationship, this fear jumps up to 20%, probably because they are on the precipice of starting a family.

When it comes to savings, there is noted lack thereof in India, showing a tendency to spend more than save. In East India it has been reported that more than 35% of the inhabitants say that their biggest financial fear is not having savings – higher than any other region. Oddly, almost 20% of the millennial generation does not report any financial fears.

Indians and Emergency Expenses

This lack of savings means that more and more Indians are using credit cards or loans to cover emergency expenses such as medical bills. At 23%, more than 1 in 5 Indians who are employed full time admit that they would use a credit card or borrow money to pay these expenses due to a lack of saved up money. The number increases for those who are employed part-time and stands at 30% with 27% turning to credit cards or money lenders in emergencies.

Indian Payday Behaviour

So how can Indian manage their spending? Why are they not saving immediately? Well, statistics show that in India, payday earnings are not managed efficiently in many cases. Only 46% of Indian males understand the importance of managing their spending by not overspending on payday. The figure does increase for females to 53%, however this still leaves a large part of the population that shows no restraint with their spending.

It is certainly not a lack of education either, since 52% of Indians with a PhD are not managing their spending. Instead, they go nuts on payday and treat themselves without thinking of the rest of the month to get through. However, those who are still attending college seem to have their spending in check. 55% of college students spend their money wisely, while only 1 in 5 spend tend to spend more than usual on their paydays.

Indians who are divorced also show a higher number when it comes to managing their finances with only 25% reporting that they do not know how to do so. For single Indians, the numbers drops significantly to 19%. This indicates that a large number of Indians can and possibly do manage their spending efficiently – however this does not answer the question of what that management entails.

Therefore in India, the tendency to overspend is present, but not a prevalent problem. Instead, most inhabitants understand the importance of saving money but are unable to do so due to a lack of enough income. Instead they live paycheck to paycheck and often find themselves dumped into credit or loans in order to cover unexpected expenses. So while spending in India does not have a pitch black dark side, this article should serve a caution to not overspend, and make sure to save up enough money to avoid debts.

METHODOLOGY

An extensive survey was conducted by DealSunny and powered by QuestionPro in August 2016. DealSunny’s survey analyzes the Spending Behavior of 1,109 Indians across the whole nation. The 2016 Indians Spending Behavior Report reveals important trends and connections between Indians’ income and expenses. It also goes over Indians’ shopping patterns and how it affects their personal lives. Respondents received emails inviting them to participate in an anonymous online survey. They were not given information that the survey was being conducted on behalf of DealSunny. A total of 1,109 participants from India completed the survey. Here are their demographic details:

Gender

Male: 58%

Female: 42%

Qualification:

No qualification: 5%

High School Diploma: 29%

Bachelor’s Degree: 47%

Master’s Degree: 18%

PhD: 1%

Age

Millennials - 18-34 years old: 84%

Generation X - 35-54 years old: 8%

Baby Boomers - 55+: 1%

Other: 7%

Region

North: 23.3%

South: 31.3%

West: 16.05%

East: 13.35%

North East: 5.6%

Central: 6.6%

Other: 2.2%