Purchase Power of Global Teens Tops $819 BillionChristina Sommer |
I often get the opportunity with financial institutions to discuss consumer trends and how these impact our industry. One of the key findings of the trends research we analyze is that the youth and the affluent tend to be the leading segments – and then everyone else eventually follows suit.
These discussions naturally drift toward the affluent, the consumers who have the money. In my opinion, we as an industry focus plenty of time on this segment and tend to be less attentive to teens. Generally the discussions go something like this: teens don’t have much money to spend – especially compared to their parents, so it makes more sense to “go where the money is.” So let’s talk about the affluent.
While the argument is certainly logical, it might be short-sighted. According to recent research from TRU Insights, the purchase power of teens (12 to 19 years old) has reached $819 billion globally. I believe anyone who has a teenaged son or daughter can attest that teens have great influence over purchases whether they are paying for the item or not. Also, teens today – across the world – act and have expectations far different from previous generations. These young consumers have become the “ushers of new technology,” challenge the status quo, and set the standard for what is popular—their actions and taste flow upwards to older consumers who often have more money. They are not to be under-estimated.
Some regions perhaps are more influential than others given their sheer size. Asia-Pacific alone accounts for more than two thirds of the teen population globally and half the global spending power of teens with $474 billion. Not surprisingly, China ($326B) and India ($108B) lead the charge. North America is second on the list with 37 million consumers and $118B in spending power.
The time is now for financial institutions and retailers to engage with this younger audience, get to know what they are all about, and cater to them – not just their wealthier parents. I am willing to bet that they will not be disappointed in the long run.