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Brands flock to smaller cities as consumer base expands

Brands flock to smaller cities as consumer baseInstead of focusing only on metros and big cities, now, brands are taking a U turn by setting up stores in smaller cities classified into the Z’ category. It’s not surprising to find a Harrods store in Gangtok, an Infosys store in Agartala or a Mango store in Raichur. Many of these category Z cities also have Samsung Smart Cafés and mobile phone-only showrooms. They also have Adidas-Puma-Reebok stores along with fashion brands AND-Global Desi, W and Biba.

India has 170-200 cities belonging to Z category with hipsterBrands flock to smaller cities as consumer base expands fashion being common across all of them. As Swapan Seth, Head of digital advertising agency, ThisContent, and luxury platform, Luxortium, notes, it not uncommon to find people with a pair of earphones, a backpack, phone and sneakers across these cities.

Changing attitude, increasing mobility drive growth

The attitude of youth towards their life is the prime sales driver in these cities. People in these cities want to celebrate all aspects of their lives. They also want to experience the same kind of comfort and luxury in their home as they would in developed cities like Hong Kong. Brands also noted that customers in these cities are firm advocators of sustainability. They believe in buying lesser but good quality products.

Mobility between Indian cities and the larger proliferation of social media has also led to a change in the mindset of people in these cities. Now, people in Chandigarh expect a similar experience from their brands as people in Delhi would. This is compelling brands to keep their quality and services uniform across India.

Internet penetration blurs lines between cities

Fancy lifestyle products are also attracting consumers in smaller cities. Another factor driving sales in small cites is increasing number of internet users in them. As a 2017 report by global management consulting firm BCG, titled The New Indian: The Many Facets of a Changing Consumer, states, more than half of all new internet users are likely to be in rural communities.

According to Karthik Natarajan, Co founder and Director of Boonbox, a six-year-old Chennai-based digital rural retail start-up, consumer behavior in small cities is similar to those in a metro, with people demanding certain brands. These consumers would rather compromise on the size of their product than the brand or opt for a lower product category. These consumers are aware and brand loyal just like their urban counterparts.

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