Consumer brands are turning to tier-2 and smaller cities for festive-season growth as urban consumption weakens. Titan, Nykaa, Biba, Fabindia and Forest Essentials are expanding their reach through sharper marketing, distribution and delivery, while Amazon has widened instant delivery to more cities, seeking to tap rising demand beyond metros.
New Delhi: Consumer companies across sectors are banking on small cities and towns this festive season, as consumption in metros remains under stress.
Titan, Nykaa, Biba, Fabindia and Forest Essentials are among brands that are stepping up marketing, distribution and last-mile delivery to new localities in cities such as Jaipur, Coimbatore, Kochi, Lucknow, Indore and Bhopal, executives said.
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"About 70% of India's consumption is coming from breakout towns-the tier-2 ones; that market is playing out really well this festive season," said Rahul Shukla, chief sales and marketing officer, watches division, at Titan Company. "A lot of government policies, money flowing into upcountry towns, new smart cities getting made and digitalisation of the economy have exposed consumers to new brands, new trends, irrespective of which tier they are in," he said.
According to a recent report from market researcher Worldpanel, urban consumption dropped 4% year-on-year in the first quarter of 2026. As much as 48% of consumers cut back on non-essential purchases, with 59% consumers expressing concerns about inflation and increase in fuel prices, it said.
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The small-town focus is playing out across sectors, with lifestyle brands including Biba, Fabindia and Forest Essentials releasing lower-priced products targeting such markets to attract first-time consumers.
IndoBevs, a homegrown company that makes spirits and liqueurs such as BroCode, Eden and Wingman, is strengthening its presence in tier-2 and emerging markets by investing in on-ground teams, distribution, and closer consumer and trade relationships, founder Sam Mahandru said. While the festive season "gives an opportunity to build on this momentum", the company's focus remains long-term, he said.
Beauty and fashion platform Nykaa, which announced at its annual investor day that it was making a strategic push into tier-2 and tier-3 markets, has begun the festive campaign by setting up two-five local stores at every tier-2 and -3 town, and doubling the total count of outlets to more than 600 by 2030.
Tier-2 households are being aggressively wooed by retailers in the home and household sector, even though ticket sizes may be smaller in the festive season, Deloitte South Asia said in a recent report. Small-town consumers spent an average ₹3.9 lakh per home on interiors in 2025, reaching nearly 74% of tier-1 spending levels, it said, predicting the momentum to continue this festive season.
Amazon India said it expanded the Amazon Now instant delivery platform to more than 120 cities, including Varanasi, Kochi, Jalandhar, Ranchi, Salem and Gorakhpur, ahead of this year's festive shopping season. "We have announced our biggest expansion of operations, increasing storage capacity by 50% to 64 million cubic feet, and enabled same-day deliveries to reach 30% more cities over the last year," Amazon India vice-president Saurabh Srivastava said.
