Tier 2 cities are becoming retail sector growth drivers in India

New Delhi [India], India's Tier 2 cities are emerging as major players in the country's retail sector, with Lucknow in particular leading the way in terms of gross leasable, according to a report by property consultancy, Knife Frank India. Holds 18.4 percent share in the sector. adamant. The report highlights that the growth of Tier 2 cities as retail hubs is driven by factors such as economic growth, employment opportunities, rising disposable income and increasing penetration of e-commerce in smaller markets. As a result these cities are becoming important growth drivers for the real estate sector attracting investment and development projects. Apart from Lucknow, other Tier 2 cities that contributed significantly to shopping center stock were Kochi, Jaipur, Indore and Kozhikode.“India's retail landscape is a fascinating mix of factors such as its huge population, advancements in digital literacy and economic expansion. These elements combine to fuel the growth of the retail sector, with particular retail locations evolving into multifunctional hubs. There is an emphasis on commerce and entertainment,” said Shishir Baijal, chairman and MD of Knight Frank India. have followed different trajectories. While the establishment of shopping centers in Tier 1 cities was seen only in the early 1990s, their emergence in Tier 2 cities was seen only in the early 2000s.As a result many Tier 2 cities are populated with relatively small shopping centres. Despite this, there are signs of progress and development. While 16 Tier 2 cities still have shopping centers of size less than 0.1 million square metres, only 5 Tier 2 cities have centers of size above this limit. This signals a shift towards larger and more robust retail infrastructure in Tier 2 cities, marking the next phase of growth for this sector in India. In recent years, the retail landscape in India has undergone significant changes, marked by trends such as return shopping, influencer marketing and Generation Z-centric strategies.These trends have reshaped brick-and-mortar shopping experiences, creating unique and immersive environments for consumers. Despite the challenges posed by the pandemic, the retail sector is emerging stronger, with a diverse landscape across the country and a wide geographical presence of brick-and-mortar stores.