Once upon a time in 2010, in a typical Indian household, under the soft glow of the living room lamp, discussions about monthly budgets and shopping lists would unfold, with the head of the family, holding the reins of decision- making. Those were days of one shampoo for all and a single soap that was deemed suitable for everyone. The kitchen shelves were stocked with the same variety of biscuits and snacks, chosen not for their variety but for their familiarity and cost-effectiveness. The concept of personal preference was often overshadowed by feasibility and budget constraints. Shopping was a uniform affair.

Fast forward to the present day, and the narrative of family consumption has dramatically transformed. Today, every member of the family emerges as an individual consumer with distinct preferences and choices. The once-upon-a-time collective decision- making has now branched into a more democratic and diversified process. Teenagers in the family, armed with information from the internet and influenced by social media trends, often advocate for specific brands and products.

The bathroom cabinet now displays a variety of personal care products, each catering to individual needs - a hydrating shampoo for mom’s dry hair, a dandruff control variant for dad, and a gentle, fruity one for the youngest. The same diversity extends to the kitchen. The once monotonous biscuit tin now houses an assortment of flavours and snacks.

This shift in consumption patterns within a single family mirrors the broader societal transformation towards individualism and diversity. Each family member, empowered by technology and driven by personal preferences, now contributes to the household’s consumption decisions. The change isn’t just in what is consumed, but how consumption decisions are made - a true reflection of the evolving dynamics within Indian families and the society at large. What has separately grown and felt is the Technology. Technology has advanced in tandem with this transformation and, to some extent, is accountable for this shift in mindset. It is not only the means but the ultimate facilitator.

The Changing Face of Expenditure

The paradigm shift that India has witnessed in its consumption patterns is driven by the infusion of technology in everyday life. This change is especially pronounced in the way Indians spend their money, with an increasing share of their wallets being allocated to technology, entertainment, and phone expenses, often surpassing traditional expenditures like food. This shift is radically reshaping the Indian market, influencing everything from daily habits to long-term economic trends.

Traditionally, Indian households prioritized essential expenditures, with food and basic amenities taking precedence. However, with the advent of digital technology, there’s a noticeable shift. Young Indians, especially in urban areas, are now spending more on smartphones, online entertainment subscriptions, and tech gadgets.

The evolving ‘share of wallet of an Indian consumer’ paints a picture of a society that is increasingly tech-savvy and skewed towards convenience. A larger portion of the consumer budget is now allocated to smartphones, internet services, and digital subscriptions.

It also indicates a societal transformation where traditional necessities take a smaller slice of the budget with the growing importance of connectivity and digital access in everyday life. This shift is a crucial indicator of India’s rapid economic development, changing lifestyles, and the aspirations of its people.

The new decision-makers in Indian households—younger and more aspirational—base their consumption decisions more on lifestyle considerations and the need to “keep pace” than on the need for functional necessities, especially in such categories as consumer durables and apparel. For instance, mobile phone sales and mobile internet connections have exhibited high growth rates over the past decade. New priorities are leading close-fisted Indian shoppers who have altered and refined their shopping lists, moving several items up or down, and altering their shopping behaviour.

It is evident that both the size and shape of consumption will undergo significant transformations in the future. The impact of factors such as market penetration, purchase frequency, and spending per transaction varies across different product categories. For instance, although food remains the most commonly purchased category, families are now allocating double the amount of money to mobile phones and internet expenses. This difference is primarily attributed to higher spending per purchase, as variations in product adoption and purchase frequency are not substantial.

For instance, if a family of four currently spends a total of 20,000 rupees per month on food, their annual food expenditure amounts to 240,000 rupees. However, if they decide to purchase smartphones, each costing 50,000 rupees due to rising aspirations, their annual spending on phones, including data packs, reaches 200,000 rupees.

This means that while food expenses are incurred monthly, the allocation of their budget between food and mobile phones is quite similar.

There is a balanced and accelerating shift in consumers’ aspirations and spending behaviors—in certain categories. Shopping has now become more of a social affair—with participation from all family members—and much more frequent, owing to the rise of online shopping.

Additionally, E-commerce platforms and digital payment systems have revolutionized shopping in India. Consumers now enjoy unprecedented flexibility, choosing from a vast array of products, from groceries to luxury items, often with the convenience of same-day delivery. This shift has led to a diversification in consumption, with people exploring and purchasing a variety of products, including multiple brands of biscuits, snacks, and other fast- moving consumer goods.

Influence of Tier 2 and Tier 3 Cities

This trend is not just limited to Tier 1 cities but is also rapidly percolating into Tier 2 and Tier 3 cities. The technological revolution is no longer confined to metros. In smaller towns and cities, there’s a burgeoning appetite for technology and branded products. This shift is partly attributed to the migration of individuals from these cities to larger urban centres for work. When they return home, often on weekends or holidays, they bring with them new brands and digital habits, gradually influencing the consumption patterns of their family and friends. People from big cities, often without realizing it, become conduits for new consumer behaviours and technologies. They play a pivotal role in bridging the urban-rural divide, introducing their communities to a world of possibilities that technology and modern brands offer. In essence, this migration of habits and preferences from cities to smaller towns and villages is subtly reshaping the consumption patterns of numerous families. It’s a testament to how interconnected our lives have become, where a simple weekend visit can become a catalyst for change, weaving the new with the old, and gradually transforming the consumer landscape of India. The once sceptical and technology-averse family members start adopting new practices, from online shopping to digital payments. They begin exploring these digital platforms, slowly integrating them into their daily lives.

The Role of Technology in Consumption

At the heart of this transformation lies the role of technology. Digital payment systems, online shopping platforms, and social media have become pivotal in shaping consumer behaviour. The ease of transactions, coupled with the power of targeted advertising and social media influence, has created a new dynamic in consumerism. From scanning QR codes to making small purchases at local stores to buying high-end electronics online, technology underpins every aspect of the modern Indian consumer’s journey.

The evolution of consumption patterns in India, underscored by technology, is a testament to the country’s rapid adaptation to the digital age. This transformation is not just altering how Indians spend their money but are also reshaping the cultural and social fabric of the nation. As this trend continues, it will be crucial for both businesses and policymakers to understand and cater to the new Indian consumer, one who is increasingly tech-savvy, informed, and diverse in their choices. Technology is rapidly evolving and will invariably impact consumer behaviour. The pace of that change is like a whirlwind. With IoT and 5G still springing up, companies need to be ready by spotting the trends now and capitalizing before it is too late.

The ascendancy of technology is a powerful catalyst for change. If brands and businesses don’t move with technology, they will be left behind and see their market share fall.