In the last two weeks, we dealt with the G3 and H1 segments, in which the chief wage earners were in their middle years, married with young children, and had very low skills and education levels. This week we move to the top of the spectrum in the same life-stage—segment A2, comprised of households whose chief wage earners are married with young children and are all businessmen with a college-level education. The A2 segment is much more affluent than the ones seen in the past few weeks, and a much smaller one as well. With nearly 400,000 households, it stands 25th in size but has the sixth highest income among all 33 in this series. These are households where the chief wage earners are second- or third-generation urban residents. With good access to education, more than three-quarters have completed graduate degrees while 12% of the chief wage earners have moved on to earn postgraduate qualifications. As all the chief wage earners in this category are self-employed, the sectors of employment are quite diverse—wholesale and retail trade, manufacturing and construction each account for more than 20% of the sectoral employment. While the first two have traditionally been sectors where entrepreneurs have struck out into after graduation, the third—construction and real estate—has attracted larger numbers in the past decade. The insatiable demand in cities spans a range of opportunities—apartment complexes, row houses, townships, office complexes, farmhouses for the high net-worth individuals, etc. Being a “builder” or a real estate developer is a career move that has attracted those with the inclination to work independently and the capacity to move through the maze of regulations in local urban bodies. Access to finance is relatively easier than before, and not just from financial institutions. With soaring real estate prices, funding is also available from relatives and friends with money to spare for what is seen to be an opportunity to make a quick buck. There are some in this segment who may have been hit the hardest by the 2008 crisis, being over-extended on their projects. But this still hasn’t taken away from the essential demand-supply dynamics of urban real estate; this is still a profitable sector for those with business instinct. A2 household sizes are small, fitting in with the higher education and income levels. Though this segment includes both joint and nuclear families, the latter form the majority, following the trend of urban families. Most homes have just three-four members, and just 14% have more than two children. Though there is a wide range of income segments within A2, children would be high-priority when it comes to consumption decisions—be it schooling or entertainment, parents try to give their children the best they can afford. Aspiration levels are very high and set to global standards in many of the households—whether they be vacations abroad, eating out, international baccalaureate schooling or the latest gadgets, the children get them all. These are parents who have made it at a young age, and they don’t want to see their children lack anything now. Around 13% of the households earn more than Rs15 lakh a year, and though one-third are still at the lowest end, earning less than Rs3 lakh a year, this could be because they are just starting out in their ventures or are very small families. Whatever may be the income levels for now, these households are set to work their way upwards to even higher levels.

1. Published: Mint dated 12 th July 2010 Indicus Consumer Segment