It is a fact that after sometime any PAN India business model has to look at Tier-II and Tier-III cities for Growth. Telecom which started off with Metros has gradually penetrated into remote Indian villages. Taking a page out of the Telecom success story, Indian Retailers want to replicate the same.
Value retailers are of the view that they are tasting good success in smaller cities due to lower investments and manpower costs. Consumers in smaller cities are inclined to purchase in clothes, jewelery, accessories and footwear.
Big Bazaar is of the opinion,
The growth rates in the smaller markets show great promise. But it cannot be this or that. Urban markets continue to be crucial and there’s no question of saturation at all. In terms of sustainability, it is clear that consumers keep coming back even after the initial novelty wears off. The entry of several retailers including Indian corporate means real capital coming into the business.
Apparels is witnessing good growth in these cities but volumes are still not high. However, due to rising working class and Women being added to the work force retail spending is expected to go up.