How long will you fall back on the sheer size of the present? The large metros are still big, but are they losing sheen? Happy hours build consumption. The quality of life people have in tier-two towns influences consumption. We have stores in places such as Kanpur, Meerut, Agra and so on. In these places the store is just a five-minute drive away.
Compare that to the time we spend on our roads to reach from Point A to Point B. The hours you save on the road lead to happiness which, in turn, leads to consumption and growth.
Then in the metros, festivals are celebrated on a smaller scale than in smaller towns. People visit their relatives a lot more than they do in cities. That, in turn, boosts gifting, which is certainly bigger in smaller towns. In the large cities it’s all about reclaiming freedom. In smaller towns the lack of freedom was never an issue to begin with. The other is that cities are polarising people. Around every suburb you will find a slum pocket. There is a served class and a serving class and the disparity is humongous.
From a consumption and marketing state, this disparity comes in the way of the ripple effect. In tier-two cities there is a difference between the served and the serving class. But it is not as large to affect spending.
(Excerpts from an IAA Debate on Are Metros Losing their Sheen to Tier-Two Towns?)
(Sadashiv Nayak is CEO Future Value Retail)