Gen Z, especially in India, is a unique cohort that has captured the attention of marketers and brands worldwide. As the MSL Gen Z Report points out, this generation, born between 1996 and 2012, is incredibly tech-savvy, financially savvy, and deeply conscious about their choices. With 47.2 crore Gen Z individuals residing in India alone, their spending power and preferences are critical for brands to understand and cater to.

But what drives the spending decisions of Gen Z? How do their habits differ in metro areas versus Tier 3 and 4 cities? Let’s dive into the complexities of this generation’s consumer behavior and how brands can effectively connect with them.

How Does the Rural-Urban Divide Affect Gen Z’s Behavior?

The MSL report sheds light on the dichotomy between Gen Z in metro cities and those in smaller towns and rural areas. While both segments share characteristics like tech-savviness and individuality, the report highlights that Gen Z in Tier 3 and 4 cities are more influenced by their close-knit communities, making them more prudent in their spending choices.

For instance, while metro Gen Z may be drawn to international fashion brands or luxurious dining experiences, their counterparts in smaller cities are more focused on need-based purchases and value for money. The report also emphasizes how family and friends play a significant role in guiding spending decisions for Gen Z in smaller towns, more so than social media influencers or celebrities.

How Important Are Family and Friends in Shaping Gen Z’s Spending?

One of the key findings of the report is that 67% of Gen Z in smaller cities rely heavily on family and friend recommendations when making purchasing decisions. This is in stark contrast to metro-based Gen Z, who are often swayed by online reviews, influencers, and advertisements.

In smaller towns, the influence of celebrities is minimal, with only 12% of respondents mentioning that celebrities impact their purchasing decisions. Instead, family, friends, and even local influencers or social media contacts play a more prominent role. This shift indicates a growing trust in personal connections over celebrity endorsements, a trend that brands need to account for when targeting this audience.

What Categories Dominate Gen Z’s Discretionary Spending?

When it comes to discretionary spending, travel tops the list for Gen Z across both metro and smaller cities. 64% of respondents in the MSL report stated that they spent on travel in 2023, reflecting the post-pandemic trend of prioritizing experiences over material goods. This preference for travel is seen as an essential way for Gen Z to fulfill personal desires, explore new places, and gain new experiences.

Other key areas of spending include:

• Health & Fitness: A notable 50% of respondents cited health and fitness as a top priority, highlighting how the pandemic has reshaped priorities around well-being.
• Gadgets: 50% of Gen Z respondents continue to invest in gadgets, keeping up with the latest in tech, whether it’s a new smartphone or laptop.
• Food Delivery and Dining Out: Eating out or ordering food online, a trend primarily seen in metro areas, is also gaining traction in Tier 3 and 4 cities, with 50% of respondents mentioning this as part of their monthly spending.

How Do Gen Z Consumers in Smaller Cities Prefer to Shop?

Another interesting trend that emerges from the report is the growing dominance of online shopping. Over 55% of Gen Z respondents in smaller cities prefer to make discretionary purchases online, whether it’s gadgets, clothing, or even travel bookings.

The surge in digital payments through UPI and the widespread use of e-commerce platforms have made online shopping more accessible, even in remote areas. This has opened up new opportunities for brands looking to reach this segment, allowing them to showcase products and services on platforms where Gen Z is already active.

However, the report also indicates that print media remains relevant for Gen Z in smaller towns. 83% of respondents from Tier 3 and 4 cities stated that they regularly consume print media, with newspapers being a common source of daily information. This highlights the unique blend of traditional and modern media consumption habits within this demographic.

(Also Read: 10 Reasons Why Gen Z Make Great Public Relations Professionals)

What Media Channels Do Gen Z Prefer for Entertainment?

When it comes to entertainment, television still reigns supreme, especially in smaller towns where families often gather around the TV for news and entertainment. According to the MSL report, 86% of respondents said television is their top source of entertainment, followed by OTT platforms and short-form videos on YouTube and Instagram.

While metro-based Gen Z are likely to consume content on streaming platforms like Netflix and Amazon Prime, those in smaller towns are just as invested in watching vernacular content on regional OTT platforms. This trend of bi-cultural media consumption—balancing both local and global influences—is another defining characteristic of Indian Gen Z.

How Do Brands Appeal to Gen Z’s Pragmatic Side?

For brands, appealing to Gen Z, especially those in smaller towns, requires a shift from traditional advertising strategies. The report suggests that value for money and practicality are crucial factors that drive purchasing decisions. With 90% of Gen Z respondents citing value for money as a key driver, brands need to emphasize the functional benefits of their products, highlighting how they solve real-world problems or add tangible value.

Moreover, with Gen Z being trendsetters and early adopters, they are constantly seeking brands that align with their values. Transparency, authenticity, and sustainability are three key pillars that resonate with this cohort. Whether it’s using eco-friendly materials or offering full disclosure about product origins, brands that are transparent in their practices are more likely to win over this discerning generation.

How Can Public Relations Help Brands Connect With Gen Z?

Public relations (PR) plays a critical role in helping brands navigate the evolving consumer landscape shaped by Gen Z. As the report shows, Gen Z is heavily influenced by online platforms, social media, and peer recommendations. PR professionals can help brands build authentic connections by leveraging influencer marketing, curating relatable stories, and creating campaigns that resonate with the experiences of Gen Z.

Monitoring trends and staying ahead of consumer preferences is another area where PR can add immense value. By continuously analyzing data on Gen Z’s consumption patterns, social media usage, and cultural influences, PR professionals can help brands tailor their strategies to stay relevant. Whether it’s launching a campaign that speaks to Gen Z’s love for travel or focusing on health and fitness, the insights gathered from PR can be invaluable in shaping a brand’s messaging.

(Also Read: The Impact of Gen Z on Consumer Behaviour – A Paradigm Shift in the Marketplace)

How Is the School of Communications and Reputation Shaping the Future of PR?

The School of Communications and Reputation (SCoRe) is at the forefront of preparing the next generation of PR professionals to meet the challenges posed by an ever-evolving media landscape. Through its comprehensive curriculum, SCoRe equips students with the skills needed to not only excel in traditional PR but also navigate the digital-first world that Gen Z is shaping.

With a focus on practical learning, industry mentorship, and real-world experience, SCoRe ensures that its students are ready to tackle the challenges of modern PR. From mastering influencer marketing to understanding the nuances of data-driven strategies, SCoRe’s approach is all about staying ahead of the curve and preparing students to lead the PR industry into the future.

As brands continue to evolve to meet the preferences of Gen Z, the role of PR will become even more critical in helping them build lasting, authentic connections with this influential generation. Want to learn more about how SCoRe is shaping the future of PR? Explore our courses and start your journey today!