Not Delhi, Mumbai but cities like Patna, Madurai may lead India’s spending revival: KPMG

By: |
July 23, 2020 8:32 AM

Consumers in tier three cities intend to spend double the amount than their tier one counterparts on accessories and skin care items priced above Rs 5,000.

Consumer spending in India, KPMG study, consumers in tier two cities, Uttarakhand, online spends, post covid 19“Tier two and three consumers are more liberal in their spending habits, hence these could be the next focus area for retailers to expand their presence,” analysts at KPMG said in the report.

Consumer spending in India is expected to see a revival led by tier two and three cities—nearly 22% consumers in tier two cities and 30% in tier three regions estimate their spending to either increase or remain at the pre-Covid levels, according to a KPMG study released on Wednesday.

Consumers in tier three cities intend to spend double the amount than their tier one counterparts on accessories and skin care items priced above Rs 5,000. They are also inclined to spend 1.4 times more than tier one cities on apparel of a similar value, the survey showed.

“Tier two and three consumers are more liberal in their spending habits, hence these could be the next focus area for retailers to expand their presence,” analysts at KPMG said in the report. Customers from the regions have also doubled their online spends compared to the pre-Covid period. However, both metros like New Delhi and smaller cities like Uttarakhand have registered a 50% increase in online shopping.

Overall, about 49% respondents intend to spend up to Rs 5,000 across categories which shows “consumers are cautious about spending”. Only 19% respondents said they would spend above Rs 5,000, led by the northern and eastern parts of the country. The survey noted that economic uncertainty will be the primary reason to affect buying post Covid-19.

The survey is based on a study of 2,376 respondents between May 18-June 7.

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