Every generation rewrites the rules of competition. Baby Boomers rewarded trust and distribution. Millennials rewarded convenience and digital access. Gen Z rewards relevance, identity, and experience.
This shift matters because India has nearly 375 million Gen Z consumers, roughly one in four Indians. Gen Z accounts for around 40% of India’s online shoppers, despite representing only about a quarter of the population. Today they influence purchasing decisions; tomorrow, as they enter the workforce and incomes rise, they will become India’s largest incremental spending cohort. Their product discovery rarely begins inside a store. It begins on Instagram, YouTube, Blinkit, Amazon, Nykaa, or via creators.
For decades, leadership in consumer industries followed a familiar formula: build a quality product, create nationwide distribution, advertise heavily, and leverage scale. That strategy created India’s strongest consumer franchises. Those businesses remain fundamentally strong. What has changed is the consumer.
Investors spend enormous time analysing market share, pricing power, and customer retention. Yet another question may become equally important over the next decade: Is the company replacing today’s customer with tomorrow’s?
A business may continue reporting healthy revenues because its existing customer base remains loyal. But if it fails to attract younger consumers, growth eventually slows as purchasing power shifts to the next generation. Market leaders rarely lose because they lose their current customer. They lose because they fail to replace them.
Every board should ask: Are we merely retaining loyal customers, or are we becoming relevant to the 25-year-old who will define the next 20 years of consumption?
Maruti illustrates this well. It still possesses exceptional competitive benefits — cost leadership, an unmatched service network, strong resale values, and high reliability. Yet its market share has declined as consumers shifted towards SUVs, connected technology, premium interiors, and stronger safety perception. Maruti continues to win the rational purchase decision, as rivals increasingly win the emotional one. A similar story is unfolding in quick-service restaurants. Domino’s built its leadership around affordable pricing and fast delivery. But once food-delivery platforms democratised access to restaurants, convenience stopped being a unique advantage. The transition is visible in footwear too. Bata built one of India’s most trusted brands through affordability and reliability. Today, footwear has become an expression of fashion and identity. FMCG is seeing a similar shift. Traditional companies built powerful moats through physical distribution and shelf space. Today, digital platforms have democratised discovery. Distribution is becoming easier to replicate; relevance is becoming harder.
Retail could become the next major battleground. D-Mart remains one of India’s finest retail businesses. However, quick commerce has changed shopping behaviour, particularly among younger urban consumers who prioritise instant delivery, digital discovery, and wider assortment. D-Mart’s recent growth moderation reflects several factors — not Gen Z alone — but the bigger question remains: where will tomorrow’s incremental consumer spending migrate?
Many of the strongest Gen Z opportunities share four common characteristics. First is premiumisation — buying better rather than buying more. Second is convenience, where saving time has become a product feature in itself. Third is experiences, with spending shifting towards travel, dining, and entertainment. Finally, tech is becoming embedded across consumption, from connected products to digital services. These themes are shaping where future demand and value creation will emerge.
The broader lesson is that the source of competitive advantage is changing. Distribution once determined what consumers could buy. Today, algorithms increasingly determine what consumers discover. The companies that win Gen Z today are far more likely to become the market leaders of tomorrow.
The author is Executive Vice President (EVP) at Elara Capital.
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.