Want to dominate in India? Focus on tier 2 and 3 cities

Forget the big districts. Tier 2 and 3 cities (less developed cities in India) are witnessing a more and more growth in ecommerce.

While tier 1 cities like Delhi hold the biggest chunk of the ecommerce market (37.1%), tier 2 and 3 cities are catching up fast, with a combined share of 62.9%.

• During Amazon India's festive sale in 2023, 80% of 1.1 billion visits came from these cities

Several factors are at play.

• Tier 2 and 3 cities have a growing population with smartphones

• There's more desire for a better lifestyle, with more disposable income as fuel. (called "aspirational spending")

Experts like Sonal Arora of GI Group Holding confirm this trends saying there's a lot of expansion happening in tier 2 and 3 cities with companies recognizing India's consumer market and the job opportunities.

• Half of all online shoppers in urban India are from here, and this is expected to reach nearly 60% by 2030.

For businesses, this means understanding the unique preferences of tier 2 and 3 consumers. According to Creative Thinks Media:

• Unlike their metro counterparts who chase the latest trends, these shoppers are often first-time online buyers.

• Affordability is key, and recommendations/opinions from friends and stories hold more weight than online reviews.