What is the primary product focus of retailers expanding into Tier 2 and Tier 3 cities in India?

Retailers expanding into Tier 2 and Tier 3 cities in India primarily focus on everyday grocery items. The rationale behind this strategy lies in the demographic and economic characteristics of these regions.

These cities often have a rapidly growing urban population, with increasing disposable incomes and a rising middle class that seeks access to basic goods and services. As these areas develop, the demand for essential items like groceries tends to increase significantly, making it a lucrative market for retailers looking to establish a foothold.

Additionally, grocery items represent a staple necessity for consumers, ensuring a consistent demand that can lead to stable revenue for retailers. The competition for everyday groceries is also less intense compared to luxury or specialty items, leading to a greater opportunity for new entrants to capture market share.

In comparison, luxury items, electronics, and apparel do not align as closely with the immediate needs of consumers in these emerging markets, where priorities often center around essential products rather than premium goods. Thus, the focus on everyday grocery items is strategically advantageous for retailers venturing into these expanding markets.