Retailers are moving to Tier-2 cities because of their growing infrastructure and increasing working populations, leading to fresh consumer markets. These cities are not just traditional commercial centers but are also evolving into vibrant spaces for both shopping and entertainment.
Research by CBRE revealed a significant shift in retail dynamics, with both local and global brands like Zara, H&M, Adidas, Nike, Starbucks, Uniqlo, and Marks & Spencer rapidly expanding in India’s non-metropolitan areas. This expansion is evident in cities such as Jaipur, Chandigarh, Patna, Lucknow, Kochi, Goa, and Coimbatore, which are becoming new hubs of consumer activity.
As of September 2023, cities like Jaipur, Lucknow, and Chandigarh saw a boost in retail from 3 to 7 million square feet, reflecting this new retail wave.
E-commerce has played a pivotal role in this transformation. The pandemic-induced surge in digital subscriptions has broadened the horizons for residents in these cities, encouraging them to explore new brands online. About half of India’s online shoppers in urban areas were from Tier-2 and -3 cities in 2021, a figure expected to approach 60 per cent by 2030.
CBRE analysts stated, “These e-commerce dynamics point towards the presence of a high aspiration consumer base, thereby propelling the influx of quality retail supply. Tier-2 and -3 markets are becoming what we call mini metros. As more and more small medium businesses grow in these markets, that gives a lot of opportunities for people to grow in the corporate ladder, giving them higher levels of income, and leading to higher discretionary spending.”
