Tier Two Beckons, And How!

Chitra Balasubramaniam explores how the demand for branded apparel is growing in tier two and tier three cities and towns.

 

Much has been written about the potential for the branded apparel segment, the humungous market size and how this segment is growing, given the convenience of branded apparel. In this process of the opening up of the market, another growth story being witnessed is how the demand for branded apparel in tier II and tier III cities is booming. The potential in these towns has been well documented. In a recent Ernst & Young report titled, ‘India’s growth paradigm – how markets beyond metros have transformed,’ it says, “India’s retail sector is set to continue its double-digit growth on the back of rising disposable incomes, rapid urbanisation and the growth of organised and Internet retailing. Fashion (apparel and footwear) is the largest segment in Indian organised retail and the market is projected to grow at a healthy CAGR of 13 percent during 2015 - 2020, from INR four trillion in 2015. While organised retail’s share of the national market is projected to rise from 10 percent today to 16 percent by 2020, many new wave cities remain under-penetrated and online distribution models are becoming increasingly popular. Given the millions of aspirational consumers in these markets and their appetite for brands, the untapped opportunity is indeed very significant.”

It shows significantly the growth potential for the brand. The report has also put the spotlight on top ten untapped markets which have a huge growth potential. According to it, the top ten untapped markets are Jaipur, Jamshedpur, Kota, Mysore, Nagpur, Raipur, Trivandrum, Vadodara, Vijayawada, and Vizag. Thus, throwing the spotlight on several towns where growth potential is huge. For marketers, this is a boon.