The Rise of the Experience Economy
There’s a new economic engine in town, and it runs on memories, not material goods. Recent reports confirm that spending on experiences like travel, dining, and live events is set to outpace spending on physical products in India. According to real estate
firm CBRE, while household expenditure on goods is projected to grow at a healthy 9.1% annually between 2025 and 2030, spending on experiences is forecast to grow even faster at 10.3%. This trend is a cornerstone of India's burgeoning 'experience economy', which is projected to nearly double in value from over $32 billion in 2024 to almost $60 billion by 2030. This growth is fuelled by a surge in live entertainment, destination weddings, and cultural tourism, sectors that are expanding at nearly twice the global average.
Gen Z and Millennials in the Driver's Seat
At the heart of this transformation are India's younger generations: Millennials and Gen Z. As the largest demographic group, Gen Z's spending habits are expanding faster than any other generation as they gain financial independence. This cohort, born between 1997 and 2012, along with Millennials, already accounts for a staggering 43% of the nation's consumer spending. Their preference is clear, with some reports indicating that as many as 78% of young consumers would rather spend money on a memorable event than a physical item. This isn’t just about small treats; travel has become the single largest discretionary expense for many young Indians. This demographic shift from saving to spending on 'fun' is not impulsive but reflects a calculated balance between enjoying the present and planning for the future.
The Social Media Influence
It’s impossible to understand this spending shift without looking at the role of social media. Platforms like Instagram and YouTube have turned experiences into a form of social currency. For many young Indians, travel and events have become a core part of their social identity, with some studies showing that social media influences the destination choices of over 70% of younger travellers. Experiences, from a weekend trek to a music festival, generate far more engaging content and personal stories than a new gadget. This has created a powerful feedback loop: the desire for shareable moments fuels spending on experiences, which in turn populates social media feeds, creating a fear of missing out (FOMO) that acts as an economic engine.
A New Definition of a 'Good Life'
The shift also reflects a deeper change in life goals and values. For previous generations, financial security was often defined by tangible assets like property and gold. While these remain important, for many young Indians, a 'rich' life is increasingly defined by a wealth of experiences. Research suggests that spending on experiences provides a longer-lasting happiness boost than material purchases. This generation has seemingly internalised this, prioritising personal growth, connection, and creating a life story. This mindset is further enabled by the rise of flexible and remote work, which has untethered many from a physical office and allowed for a blend of travel and work. Possessions can feel like a burden, while experiences offer a sense of freedom and lasting memories.
Smart Spending, Not Reckless Spending
The focus on experiences shouldn't be mistaken for financial irresponsibility. In fact, evidence suggests the opposite. Many young Indians are balancing their 'fun fund' with disciplined financial planning. Surveys show that a high percentage of Gen Z saves a portion of their income. However, their approach is different; they are adept at using fintech apps for budgeting and investing in modern instruments like SIPs and stocks to build wealth. This generation is not just saving for a rainy day but actively investing for specific goals, which include both financial independence and funding their next big experience. It's a pragmatic approach that seeks to enjoy the present without sacrificing long-term security.
