Contribution of big cities to India’s retail growth declines: Kearney

As per global management consulting firm Kearney, contribution of big cities to the growth of India’s retail industry is declining, as consumption patterns have changed over the last decade.

As per a report by Economic Times, smaller cities, including Surat, Jabalpur, Raipur, Mangalore and Faridabad are emerging as the growth centers with their own consumer preferences.

This is especially evident in the share of luxury retail spending, which grew from around 9 per cent in 2013 to 55 to 60 per cent in 2018 in non-metro cities, says Siddharth Jain, Partner, Kearney. Around 65 per cent of the leading apparel e-commerce platforms’ revenue, for instance, currently comes from Tier II and smaller cities.

Several Tier II and Tier III cities boast favorable conditions such as unaddressed demand for organized brands, lower rentals and manpower, increasingly dense populations and growing disposable incomes.

Between 2006 and 2017, Tier II and smaller cities received five times more investments, too, in retail infrastructure than tier 1 and metro cities, the report said.