Retail Revolution in Tier-II Cities: Over 30 Brands Drive Growth

The retail sector in India is witnessing a significant expansion in Tier-II cities, with over 30 major retail brands opening their stores in 14 such cities during the January-September period of 2023. This growth is highlighted in a report titled "Tier-II Cities: The Time to Shine" released by property consultant CBRE.

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Key Findings of the Report

According to the report, several domestic and international retail brands, including Croma, Armani Exchange, Malabar Gold & Diamonds, Reliance Smart, Tanishq, H&M, Marks & Spencer, GAP, Starbucks, Pizza Express, and Under Armour, have expanded their retail footprint to Tier-II cities. These cities include Chandigarh, Jaipur, Indore, Goa, Mangalore, Kochi, Lucknow, Patna, Ranchi, Guwahati, Bhubaneshwar, Vizag, Mysore, and Coimbatore.

Retail Real Estate Space in Tier-II Cities

The total retail real estate space in these 14 Tier-II cities stood at 29 million square feet as of September 2023. Jaipur, Lucknow, and Chandigarh each boast of retail real estate space ranging between 3 to 7 million square feet. The retail development in these cities has been a healthy mix of high streets and malls.

Factors Driving Retail Growth in Tier-II Cities

Anshuman Magazine, Chairman, India, Southeast Asia, Middle East & Africa of CBRE, attributes the retail growth in Tier-II cities to several factors. These include the e-commerce boom, a tech-savvy consumer base, growing aspirations, and a surge in discretionary purchasing. Investment-grade developers are setting up large-sized contemporary malls in these cities, which are seen as entertainment destinations rather than just places to shop.

The expansion of retail brands to Tier-II cities in India reflects the growing economic importance and consumer demand in these regions. With a growing population and increasing disposable incomes, Tier-II cities are emerging as attractive markets for retailers looking to expand their reach beyond metropolitan areas.