70% of India's Consumption Now Comes From Small Towns
Brands like Titan, Nykaa, and Amazon are expanding their reach to tier-2 cities, driven by growing consumption and government policies
About 70% of India's consumption is now coming from tier-2 towns, with brands such as Titan, Nykaa, and Amazon expanding their marketing and distribution efforts to these areas. This shift is driven by growing consumption in small-town India, with consumers in these areas spending an average of ₹3.9 lakh per home on interiors in 2025.
Amazon India has been at the forefront of this expansion, with the company announcing its biggest expansion of operations ahead of the festive season. The company has increased its storage capacity by 50% to 64 million cubic feet and enabled same-day deliveries to reach 30% more cities over the last year. Additionally, Amazon India has expanded its Amazon Now instant delivery platform to more than 120 cities, including Varanasi, Kochi, Jalandhar, Ranchi, Salem, and Gorakhpur.
Other brands such as Biba, Fabindia, and Forest Essentials are also stepping up their marketing and distribution efforts in small-town India. According to executives, government policies and digitalization have exposed consumers in these areas to new brands and trends, leading to increased spending. In fact, small-town consumers' spending on interiors has reached nearly 74% of tier-1 spending levels in 2025.
## Why it matters The shift in consumption patterns to small-town India has significant implications for consumer brands. With the government's focus on developing new smart cities and digitalization, consumers in these areas are becoming increasingly exposed to new brands and trends. As a result, brands are expecting continued momentum in consumption this festive season. The expansion of e-commerce platforms and logistics infrastructure is also supporting this growth, enabling brands to reach a wider audience and providing consumers with greater access to products and services.
## What happens next As the festive season approaches, consumer brands are likely to continue their focus on small-town India. With the growth in consumption expected to continue, brands will need to adapt their marketing and distribution strategies to meet the changing needs of consumers in these areas. This may involve further expansion of logistics infrastructure, increased investment in digital marketing, and the development of new products and services tailored to the needs of small-town consumers.
