Shift in consumers preferences due to mindset of Millennial’s
Shift in consumers preferences due to
mindset of Millennial’s
Essentially, therefore, we shall have to consider the factors
which are being influenced by this generation before investing into any
company. The future of companies, their
growth, demand and challenges will be governed mainly by the shift in consumers
preference due to mindset of millennials. The pandemic effect also has been
affecting people’s mentality.
The millennial’s choice sector wise:
On
line shopping:
Millennials are shifting from physical
store to online store for everything from grocery, apparels, accessories,
personal care and medicines. Companies
providing online platforms like Amazon, Flipkart and Reliance Retail are the
major beneficiaries.
Banking: Millennials prefer
Digital Banking. They want every banking service on one click of button either
on the mobile or laptop. Digital Banking service providers like Paytm, Google
Pay, Axis Bank, Kotak Mahindra Bank and ICICI are in more demand and their
businesses in retail banking have been increasing with a rapid pace.
Eateries:
Quick Service Restaurants (QSR) are
now being in more demand and millennials prefer brands like Dominos, McDonald,
Burger Kind and Barbeque Nation. Online
food delivery services have been increasing with quick pace. Zomato and Swigy
now have become household name. Cloud Kitchen business has been grooming as
people are having every facility through online food delivery services.
Trading
& investment:
The revenues of companies
providing Mobile App services like Zerodha, Grrow and 5paisa.com have been
increasing multifold. They are providing
one stop solution for all financial services like stocks, mutual funds and
bonds online and that too with easy user interface.
Fashion:
Millennials are not only
passionate for fashion but are “Brand” conscious as well. The boutiques are
proving disrupter for conventional dressing.
Normal fashion stores have been struggling for their survival owing to
this shift. If they have to survive,
they shall have to come out with some exclusivity. Manyawar is a typical
example who anticipated this change and offered exclusive range in ethnic wear.
Aditya Birla fashion has been offering varieties of brands under single
umbrella. Recently they have acquired controlling stake in Sabyasachi one of
the most trusted boutiques in India. Aditya Birla Fashion is the only Indian
company competing against multinational brands.
Arvind Lal Bhai group is the largest supplier of Fabric to many
multinational apparel manufacturing companies and is a trusted name in
textiles.
Education:
EdTech companies like BYJU'S,
Unacademy have been proving as major disrupter in education field. They
have been eating business of traditional class room tutorials in a big way.
Healthcare:
Millennials are far more health
conscious in comparison to the earlier generation like baby boomers. They prefer to have regular periodical health
check ups. They are becoming the largest customers of health insurance companies. They
also prefer specialty hospitals which are providing specialized services for
any disease or sickness. The businesses of Diagnostic Centers, Insurance
Companies and Specialty Hospitals are growing with a decent pace. Prominent in
the filed like Dr. Lal PathLab, Apollo Hospital, Vedanta and Narayana will be
showing a sustainable growth in their revenues. Tele medical consultancy is one
of the fastest growing health services in India and this is going to be a major
disrupter for average level hospitals. Unless the hospitals providing state of the art technology, their
survival will be tougher in coming years.
Health insurance companies like ICICI Prudential, HDFC Standard Life and
SBI Life should show a good CAGR in coming years.
Entertainment:
A major shift has been witnessed
in the entertainment & leisure sector.
Computer Gaming is one of the typical examples of major shift of
millennials from conventional entertainment modes. In USA the Esports business
has already reached to $ 160 billion. In
India also this business has been growing quickly. Gaming companies will be
booming in the coming years. Big bull Rakesh Jhunjhunwala is having stake in recently listed Indian gaming
company Nazara. The software companies
providing technical services for Esports will remain in focus for next several
years. Recently in February 21 an online
poker competition was organized. Total 4000 players participated in the event
and the first prize money was Rs. 25 Lacs. Since theatres are closed and most
of the people are working from home due to pandemic, the OTT platform are also
gaining tremendous popularity now in Indian market. The OTT platforms like
Netflix, Amazon Prime and Hot star are slowly washing out the D2H service
providers.
Leisure
& Holidays:
Millennials are also looking for
different and innovative leisure & holiday options. They prefer more
adventurous travelling like trekking and water sports activities. Tour
operators who are providing such packages will remain more in demand. Millennials are attracted towards unexplored
holiday destinations. The age old holiday destinations like Shimla, Mussoorie
or Manali are no more attractive as they are too much crowded now. The work from home culture due to pandemic has
open many ways for leisure. Workcations at
remote places surrounded by natural beauties have been becoming more popular
amongst younger generations. Attractions
towards unexplored destinations and module like workcations are going to
disrupt the conventional hotel business. Under the changed atmosphere big brands like Taj will be able to survive
due to strong brand image other-wise the pattern of tourism is changing rapidly
and unless the hospitality industry realizes this shift, they are likely to
suffer.
Environmental
issues:
The millennials are more
environment conscious comparing to their earlier generations and they always look
for the sustainable (environment friendly) products. That is why a huge money globally has been
investing in environment friendly projects. World is looking for green projects and
world’s major investors are examining ESG norms before investing in any sector
now. Green revolution to save the earth has already began and we will see major
changes in coming decades. A blue-Chip
company of today might not survive unless they adopt sustainable norms. If you are long term investor, think twice
before investing in any company. First,
check whether they are fulfilling the environmental norms. If not, you might
get bad returns investing in such companies. Companies like UNILEVER have already
shown their inclination to become 100% green in ten years’ time. Companies like
Tata Motors, Asian Paints, Aarti Industries, Birla Chemicals (Grasim unit) and
Adani Power have already begun their efforts for going green. International chemical giants like Dow, Evonik
an Dupont have already committed for sustainable products. Tesla has shown the
world how money is pouring behind the green projects.
Every investor should keep in
mind this shifting pattern before investing in any company. Try to understand and observe the behavior of
the new consumers’ force and see what the world is looking for? Then decide as to which sectors are going to
perform better in future.
-Rajendra Jhanwar
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