Hyderabad: Millennials, the 18-35 age group also known as digital natives, are influencing spending and consumption patterns across segments, including financial investments. There are more than 400 millennials in India. And almost 74 per cent of them are reliant on mobile broadband and they spend an average of 17 hours a week online. With the disposable income they have, they are looking at new means of investments to maximise their returns.
Millennials start off with tax savings investments as they offer them long-term return capability with a three-year lock-in period. PPF has also become an important option in the last few years. They continue to look at regular savings options, points out Vidya Bala, Head-Mutual Fund Research at Wealth India Financial Services.
There seems to be a gradual shift in their spending on traditional forms of investment options such as fixed and recurring deposits to newer alternatives. Many are taking the systematic investment plan (SIP) route as well. They are looking at mutual funds and capital market options mostly in the form of equity/stocks.
In terms of the geographic market trends, capital market options look attractive for millennials in the west and north, and fixed deposit and mutual funds are getting a major pie in south.
Another important pattern seen in this segment is that the millennials are also looking for short-term aspirations such as owning cars and buying their favourite gadgets. While buying smartphones, millennials are looking for both liquid and liquid plus options.
Investment in real estate is not that big as millennials primarily look at short-term gratifications and keep jumping jobs. So preference always is on liquidity and liquid-oriented options, she adds.
Sachin Kothari, Director, Bullion India, says, “Millennials are also interested in the bullion market that of investing in gold, primarily through digital platforms, as they are mostly tech savvy. The precious metal had been giving them good returns on investment.”
From the geographic point of view, millennials in south had been dominating the bullion market investments accounting for almost 50 per cent. In the coming years, millennials in west and north will also increase their spending on gold bringing the southern share to 40 per cent.