Mumbai: Retailers are flocking towards Tier-2 cities Where rapid development in infrastructure and increasing working population is creating new areas of consumption.
Local brands are also cashing in on it market potential Among these opportunities, global players such as Zara, H&M, Adidas, Nike, Starbucks, Uniqlo and Marks & Spencer are rapidly expanding their footprint in non-metros, a recent study by CBRE showed .
Cities like Jaipur, Chandigarh, Patna, Lucknow, Kochi, Goa and Coimbatore are witnessing an influx of fashion and food and beverage (F&B) brands.
In fact, Jaipur, Lucknow and Chandigarh individually had between 3-7 million sq ft of retail stock by September 2023. “Most of these are non-metro established trade and business centres, and commercial office space is also seeing a healthy traction. Take-up… Retail supply has matured, with investment moving away from vanilla stores on high streets- “For the entry of grade developers who are establishing quality retail spaces that serve as both entertainment and shopping destinations,” CBRE analysts said.
Tata Group-owned Caratlane is betting big on tier-2 markets and has doubled its store count in places like Lucknow and Indore over the past year. “To explain, Caratlane started FY2023 with 22 stores in tier-2 cities and now has 39 stores across these cities. There are many other smaller cities like Kochi, Guwahati, Ludhiana and Mysore where we have seen strong demand. We have seen growth in the number of our stores in the last one year,” chief operating officer Atul Sinha told TOI.
E-commerce has played its fair share in promoting retail trade in small towns. The widespread adoption of e-commerce in these regions, helped to some extent by the pandemic-induced surge in digital subscriptions, has helped people discover and try new brands, creating a huge market for retailers in these cities. There is scope for increasing our presence. For perspective, about 50% of urban India’s online shoppers were living in tier-2, -3 cities in 2021 – a percentage that is projected to reach about 60% by 2030. “These e-commerce dynamics point to the presence of a high-aspiration consumer base, which will lead to an influx of quality retail supply,” CBRE analysts said.
Manyavar recently opened a 17,000 sq ft store in Ranchi and is about to launch another 20,000 sq ft store in Gorakhpur, reflecting the growing appetite of retailers towards smaller cities. “Tier-2 and -3 markets are becoming what we call mini metros. As more and more small medium businesses grow in these markets, it provides a lot of opportunities for people to move up the corporate ladder, leading to “They get higher levels of income.” And leading to higher discretionary spend, said chief revenue officer Vedant Modi, adding that around 40-50% of the company’s business today comes from tier-2 and -3 cities.
Local brands are also cashing in on it market potential Among these opportunities, global players such as Zara, H&M, Adidas, Nike, Starbucks, Uniqlo and Marks & Spencer are rapidly expanding their footprint in non-metros, a recent study by CBRE showed .
Cities like Jaipur, Chandigarh, Patna, Lucknow, Kochi, Goa and Coimbatore are witnessing an influx of fashion and food and beverage (F&B) brands.
In fact, Jaipur, Lucknow and Chandigarh individually had between 3-7 million sq ft of retail stock by September 2023. “Most of these are non-metro established trade and business centres, and commercial office space is also seeing a healthy traction. Take-up… Retail supply has matured, with investment moving away from vanilla stores on high streets- “For the entry of grade developers who are establishing quality retail spaces that serve as both entertainment and shopping destinations,” CBRE analysts said.
Tata Group-owned Caratlane is betting big on tier-2 markets and has doubled its store count in places like Lucknow and Indore over the past year. “To explain, Caratlane started FY2023 with 22 stores in tier-2 cities and now has 39 stores across these cities. There are many other smaller cities like Kochi, Guwahati, Ludhiana and Mysore where we have seen strong demand. We have seen growth in the number of our stores in the last one year,” chief operating officer Atul Sinha told TOI.
E-commerce has played its fair share in promoting retail trade in small towns. The widespread adoption of e-commerce in these regions, helped to some extent by the pandemic-induced surge in digital subscriptions, has helped people discover and try new brands, creating a huge market for retailers in these cities. There is scope for increasing our presence. For perspective, about 50% of urban India’s online shoppers were living in tier-2, -3 cities in 2021 – a percentage that is projected to reach about 60% by 2030. “These e-commerce dynamics point to the presence of a high-aspiration consumer base, which will lead to an influx of quality retail supply,” CBRE analysts said.
Manyavar recently opened a 17,000 sq ft store in Ranchi and is about to launch another 20,000 sq ft store in Gorakhpur, reflecting the growing appetite of retailers towards smaller cities. “Tier-2 and -3 markets are becoming what we call mini metros. As more and more small medium businesses grow in these markets, it provides a lot of opportunities for people to move up the corporate ladder, leading to “They get higher levels of income.” And leading to higher discretionary spend, said chief revenue officer Vedant Modi, adding that around 40-50% of the company’s business today comes from tier-2 and -3 cities.
