Tier 3-5 towns to grow twice as fast as metro peers driven by higher disposable incomes

Key Highlights

• Tier 3–5 cities are growing almost twice as fast as metros, driven by higher disposable incomes, rising aspirations and a lower starting consumption base.
• Categories from dining to apparel are seeing clear trading‑up behaviour, but the meaning of ‘premium’ varies sharply by geography — making hyperlocal product assortments increasingly important as mass‑premium offerings lose relevance.
• With tier 1–2 markets approaching saturation, highway and high‑street retail corridors (2H) are emerging as new demand engines.
• Fuel and food consumption along these routes indicate rising footfall, first‑time brand adoption and the formation of new retail hubs.
• Future growth will depend on category mix, micro-marketing and the ability to understand consumers at a highly granular level, said the report.