Retail presence shoots up in key towns, urban India

With the economy now on the revival path, organised shopping centres and malls have considerably increased retail presence in Key Urban Towns (KUTs) and the Rest of Urban India (ROUI), a report said.

The Ernst and Young report said that the percentage of growth in the number of malls in KUTs was more than double, at 55 per cent, than that of metros, which stood at 24 per cent, over the last two years.

The report, titled 'The New Market Shehers: Tapping Potential Beyond the Metros', identified the trends in consumption patterns and marketing spends in small-town India.

Consumers in KUTs show an increasing preference for premium products and services of established mass brands. The sale of consumer goods like LCD TVs is also on the rise in KUTs, given the significant uptake in leisure and lifestyle spends of consumers there, it said.

The report said that men were utilising wellness services now, more than ever before, not just in the big metros but also in Tier II and III cities.

Women in small towns are more willing to pay large sums of money for procedures pertaining to age correction, body sculpting and removal of skin imperfections, etc, it added.

Ashok Rajgopal, Ernst & Young, Partner, Media and Entertainment Practice, said, "We are witnessing enormous opportunities in non-metro urban markets, which were only marginally affected by the recession and now have enhanced purchasing power."

The report said that the share of KUTs and ROUI in newspaper advertising (by volume of activity) in 2009 was higher than 50 per cent across most categories.

In categories such as cellular skincare, oral hygiene, hair care and consumer durables, the advertising share was even higher than 75 per cent, it said.

The report said that while metros and KUTs were driving the growth in later-stage consumption (higher transaction value products and discretionary goods), ROUI was the force behind early-stage consumption (necessities and products with lower transaction value).

This trend is likely to continue with the changing consumption pattern of consumers, fuelled by greater purchasing power, the report said.