Home / Knowledge / News / Apparel/Garments / Tier II & III cities coming in to their own to delight of retailers
Tier II & III cities coming in to their own to delight of retailers
Mar '09
Most of the sectors are complaining of reaching saturation levels in tier-I cities, which also includes even the fastest growing sector; telecom. This situation is making most of the companies; turn their eye towards the tier II and III cities, which have witnessed a growth in disposable incomes in the last few years.

Though sales may be high in tier-I cities, the profits delivered by outlets in tier II and III cities are higher due to their comparative lower costs of rentals and operating expenses. Tier I cities sales account for around 40-45 percent of a typical retailer, which means the remaining cake is shared amongst the tier II and III, towns and cities.

But at the same time urban cities continue to be the focus of attention of all retailers, irrespective of their product offerings, due to the fact that a smaller proportion of population with high disposable incomes is responsible for the 40 percent of all sales delivered by an retail outlets situated, for e.g., in any of the eight metro cities.

The growth rates delivered by stores in tier II and III cities are growing with each passing year as rural incomes have increased to a large extent, fuelled by high agriculture yields and galloping farm output prices. The consumers in tier II and III towns are also able to fulfill aspirations which also help fuel the boom in the retail sector.

The main point that retailers need to take care of, is that the consumer in towns and small cities are value conscious customers and expect the money they spend to last them a long way. So retailers will have to be extra careful while pricing their products, for e.g. lower priced shirts would move faster off the shelves than the high priced ones.

In the current circumstances, where consumer confidence is at its lowest and recession is taking a toll on sales of retail outlets in big cities, also add the saturation point that has been reached, the potential inherent in the tier II and III towns and cities, could prove lucrative in enlarging volumes in this period of crisis.

Fibre2fashion News Desk - India

Must ReadView All

Textiles | On 25th May 2017

Huntsman and Clariant to have merger of equals

Huntsman Corporation and Clariant have announced that their boards of ...

Courtesy: CBRE

Apparel/Garments | On 25th May 2017

European cities preferred for retailer expansion: CBRE

European cities were the preferred new destination for international...

Apparel/Garments | On 25th May 2017

Guess records $458.6 million revenue for Q1 2018

For the first quarter of fiscal 2018, the net revenue of American...

Interviews View All

Riddhika Shah
SS Homme

'Worsted wool is the ideal fabric for menswear'

Manuj Terapanthi

Transparent supply chain and fair trade will boost sustainable market

Hugo Boss

'Hugo Boss works with carefully selected sourcing partners'

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Rupa Sood and Sharan Apparao

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


news category

Related Categories:
May 2017

May 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search