In Tier-2, -3 and -4 cities, consumer brands and e-commerce platforms are increasing their marketing efforts and building inventory in anticipation of boosting sales during the July–September and October–December holiday periods.
Ahead of the festive season, which is also India’s busiest shopping time, e-commerce sites Amazon, Meesho and Flipkart are expanding their delivery networks to nonmetropolitan areas.
Companies in the fashion, beauty and lifestyle sectors, such as Nykaa, have stated that they are increasing their efforts in smaller cities and towns.
In an investor presentation last month, the beauty and fashion platform Nykaa stated that it is expanding its presence in Tier-2 and Tier-3 cities by “creating deep partnerships” with local content creators and encouraging engagements on local media and OTT platforms. In these markets, it intends to provide up to 50% off during the festive months of September and October.
India’s discretionary goods sales growth slowed to 4-5% during the last 12 months from 9-10% a year earlier as consumers, particularly in major cities, reduced their spending due to inflation. In the second half of the year, businesses anticipate that demand in smaller markets will continue to be higher than in metro areas.
In order to generate new demand for clothing, jewellery, watches and electronics, Amazon India said that it is establishing 30 additional locations in cities including Panchkula, Mohali and Howrah. The company announced on Monday that it had opened over 30 additional delivery stations in Tier-2 and Tier-3 cities, such as Howrah, Nagpur, Panchkula, Hubli, Mohali and Indore.
According to a May analysis by Anarock Property Consultants, tier-1 cities would account for 35% of India’s online purchasing activity by 2030, while small cities and villages would account for 65%. It ascribed the anticipated growth to increased discretionary incomes, increased smartphone usage and the uptake of e-commerce.
