Summary of this article
Millennials, Gen X show stronger financial security than Gen Z.
Gen Z spends cautiously despite high economic optimism.
AI widens generational gaps in spending behaviour.
The latest BCG consumer study reveals a world sharply divided between optimistic developing markets and growing pessimism across developed economies. India sits comfortably on the confident side of this divide, while the report shows consumers in the UK, France, Germany, and Japan are increasingly convinced that geopolitical disruptions will slow their economic habits. India remains relatively unfazed, with a high share of respondents expecting a stable economic future. Under this broad economic optimism lies a generational financial divide that is reshaping consumer behaviour.
Millennials and Gen X feel secure enough to maintain their spending habits. While Gen Z is burdened with early career income and rising living costs, they are more cautious when it comes to spending.
This generational gap becomes clearer when spending intentions are examined. The report shows that in developing markets like India, categories like automobiles, mobile devices, and home appliances expect net increases in spending, as compared to developed markets where consumers are trimming their non-essential demands. Millennials are largely behind India’s stronger momentum in financial demands. Gen Z, on the other hand, spends aspirationally.
As per the report, GenAI is adopted globally, with the usage primarily across shopping, research, translations, planning and healthcare research. Millennials tend to depend on AI for optimising work and productivity. Meanwhile, Gen Z is leaning heavily on AI as a budgeting tool, using it to compare products, evaluate alternatives and make informed purchases. The difference is subtle; millennials use AI to accelerate what they have, while Gen Z uses it to boost what they lack.
The report also indicates a brand behaviour that reflects the same generational shift; even if the consumers say they are open to trying new brands, they are relying more on the familiar. Millennials do this because they trust a brand or company, while Gen Z does it in case their exploration becomes risky. Sustainability shows the same picture, even across different categories; people are willing to pay for reasonable, eco-friendly options. Both generations care about the issue, but neither is willing to go out of their way for it.
What emerges is a picture supporting that India and other developing markets have a strong consumer confidence, but the confidence is unevenly distributed across different age groups. Millennials are willing to invest, upgrade and expand, while Gen Z is navigating a world of rising expectations and confined financial stability.
