Small towns' big desires drive e-commerce and D2C growth

Trend signals broader shift in consumer behaviour, with rising demand for high-quality items

- PEERZADA ABRAR

In 2024, India's Tier-II and Tier-III towns and other rural regions emerged as key growth drivers for e-commerce companies and direct-to-consumer brands, with strong demand for their products and services.

E-commerce firm Meesho concluded 2024 with a 35 per cent year-on-year increase in orders, more than half of which were placed by buyers in small towns. The firm recently reached approximately 175 million annual transacting users this year despite challenging market conditions. Interestingly, about 50 per cent of its user base comes from Tier-IV+ towns, among them Naidupeta in Andhra Pradesh, Sherghati in Bihar, and Harapanahalli in Karnataka.

The platform also retained its position as the most downloaded shopping application for the fourth consecutive year, surpassing 210 million downloads.

Ladakh, Uttar Pradesh, and Bihar emerged as big contributors in e-commerce user growth, highlighting the untapped potential of Tier-II+ markets.

This trend signals a broader shift in Indian consumer behaviour, with increasing demand for value-driven and high-quality products. This is driving a resurgence of consumption in smaller towns.