Urbanization and development are never-ending. A suburb decades before is a sprawling corporate hub today. This universal phenomenon gives businesses access to new markets with rising disposable income and aspirational value. For India, Tier II and III markets are becoming the next happening business destinations with amusement parks, multiplexes, shop-in-shops and what not. Jindal Lifestyle Ltd., KAZO, Perona, XYXX, and The Ayurveda Company (T.A.C) analyze the scenario.

Price Point Vs Brand Awareness

For Jindal Lifestyle Ltd., price point isn’t that big a factor when their target audience is well-traveled and well-informed about current trends in products such as stainless steel. Online orders keep coming from remote areas in small cities such as Bareilly, while in bigger markets, people usually visit stores for better experiences. 

“Advertisement helps in brand discovery partly, but our customers inquire about utilities, aesthetics, importance, and configuration as they identify their needs. They also analyze the reputation of the manufacturers,” says Rajesh Mohata, CEO and Executive Director of Jindal Lifestyle Ltd.

For fashion brands KAZO and Perona, the aggregate price point in smaller cities hover roughly across the Rs 2000- Rs 12000 bracket across clothes, apparel, and accessories. However, positive experience for first-time buyers helps in increasing price margins. 
 
Responsiveness Proportional to Data Reach

Mobile usage is prominent in Tier III markets, and TAC is ensuring that its website and online shopping experience are mobile-friendly and data-efficient. Relevant content across social media helps the brand establish a strong presence. 

For KAZO, consumer's consideration phase involves a dual approach of offline and online navigation initially in the hinterlands. Rapport is built through advertising, recommendations, social media platforms, and influencer marketing strategies. g“As consumers progress towards more comprehensive research, they surf websites to make informed decisions. Once satisfied with the information available, consumers reach the physical store for an immersive, end-to-end experience,” says Siddhant Aggarwal, Director of Operations at KAZO. 

Business Distribution

KAZO’s business amounts to 55 percent of its revenue from Tier I cities, 35 percent from Tier II cities, and 10 percent from Tier III cities. In terms of geographical contribution, business emanating from Tier II cities exhibits distinctive patterns. Specifically, within the Raipur region, their market share accounts for approximately 10 percent, while in Ludhiana, they garner a 25 percent market share of overall business of Tier II cities. In Tier III, their presence in Bhatinda commands a substantial 27 percent market share, and in Ambala, they secure a 41 percent market share of the overall business of Tier III cities. The brand has an omnichannel format across a mobile app, a website, 65+ Exclusive Brand Outlets (EBOs) and 120+ Shop-in-Shop (SIS) setups.

Jindal Lifestyle Ltd. is mainly present across Tier I and plans to expand more in metros in order to cater to the premium clientele better. However, 15 percent of their business comes from Tier II cities such as Ludhiana, Bareilly, Trivandrum, and Jaipur. “In cities such as Delhi, Mumbai, Bengaluru, and Hyderabad where we have been present since 2 decades, we see people buying products to improve their lifestyle. It’s a serious utility clause for customers across Tier II and III, and up-selling happens right from entry-level price points to premium, and then luxury products,” opines Mohata.

For Perona, apart from major metros such as Chandigarh, Surat, Kochi, and Pune, customers have been very responsive from Kanpur, Gwalior, and Jaipur with high digital reach and rising demand for western wear. 

For a skincare brand such as T.A.C, business is about 50-60 percent in Tier II and III and major markets arise from MP, Kerala, upcountry Tamil Nadu and Rajasthan, other than the Tier I category.

“With 25 percent of the business coming from Tier II and Tier III cities, we have capitalized on Amazon and Flipkart to optimize product visibility through enhanced listings, reviews, and strategic advertising. We have also invested in localized digital marketing campaigns and leveraged social media and influencer partnerships to reach potential customers in these regions,” says Yogesh Kabra, founder, XYXX.
  
Establishing a formidable offline foothold involves concentrating on distribution networks and fostering relationships with retailers and distributors via communication, training, and assistance. “We arrange events for retailer bookings to welcome new collaborators and guarantee extensive product outreach. We also offer incentives and backing to retailers in Tier III cities, spurring them to stock and endorse products, all the while executing a dependable inventory management system for prompt restocking,” Kabra adds. 

Market Locally to Sell Locally

In order to increase visibility and penetrate new markets, the apt solution is to go local across campaigns, ads, customer support and feedback, explains Param Bhargava, Co-Founder, T.A.C- The Ayurveda Co.

“Local influencers aligning with brand values, user-generated content encouraging customers to share testimonials, localized content creation via blogs and videos altogether steamroll the road to offline conversion. In the meantime, word-of-mouth promotion, print media and direct outreach through phone calls, SMS, and email campaigns provide personalized assistance,” Bhargava adds.

Similar is the case with Raipur as a market for Kazo, where alignment with local tastes have strengthened brand identity, resulting in a consistent influx of customers to stores. 

Perona is solidifying its footfall across Tier I at the moment, but its vast availability across its own website and ecommerce partners such as Tata CliQ Luxury, Nykaa Luxe, Ajio Luxe, Pernia’s Pop Up shop, Ogaan etc prove its interest to grab the emerging Tier II and III markets.

“We endeavor to provide our customers a complete shopping experience delivering them a strong reflection of the brand personality, shopping experience, and detailed product information. Offline, Perona can be bought through its three company-owned stores in Delhi and Mumbai, and the SIS partners such as White Crow, Ogaan and Evoluzione, to name a few,” concludes Puneet Mangla, Co-Founder, Perona.