What is about Tier 2 and Tier 3 cities that we are missing?
Was having a discussion how VMart incurred losses while operating in Tier 1 cities, shifted base to Tier 2 and 3 cities is now profitable and listed on market
Similarly success story of Snapdeal.
What is that these cities hold? How are the consumers different?
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Tier 2 - Tier 3 cities have higher % of "poor" and nearby villagers also go to their district hq town for shopping outside of daily essentials.
There's vibe of indifference/ look down upon consumption of "brands", partly because of previous experience getting "ripped off" in name of branded saman.
Think of it as deciding to buy a ₹99 nayasa soap tray against ₹49 Vmart soap tray or ₹29 Haat market soap tray when disposable income is ₹2000 for the month.
You do realise there are family of 4 living on ₹9000 salary of petrol pump attendent, or ₹8000 salary of bank security guard or ₹11000 of NTPC coal handler and these are figures of miniscule percentage of people having a predictable stable salary.
Aside from agriculture, Majority t2/3 working class is soiling in unstable Lala led sme/msme setup where they cut 2 days pay if you've to stay extra night at the hospital to take care of ailing family member.
Our supreme leader likes to boast about big gdp figure skewed by 3-4 cities, forgetting avg guy's purchasing power outside of roti-kapda-makan is sub ₹20000 for the whole year.
Rentals. Low rentals keep costs low. And the reason. Given above, spending power of people has increased and they are now looking forward to western like shopping experiences, which Tier 1 doesn't consider VMart etc to be, but TierX has no other option.
Another point is student towns. It's a scale game , where even if students don't have a lot of money, they like to explore. And they come in numbers.
Ofcourse I'm talking of the business/agriculture rich and not the lower middle class.