Tier 2 and 3 Markets as the New Frontiers of Fashion E-Commerce

Brands and businesses have gradually penetrated the tier 2 and 3 cities' regional areas of the country because they hold immense market potential.
Tier 2 and 3 Markets as the New Frontiers of Fashion E-Commerce

Today, the fashion industry in India is witnessing exceptional growth due to factors such as suitable demographics, the emergence of new players, rising consciousness among consumers, and intelligent transformations in the digital space. Along with the fashion industry concentrating on reinventing itself, a key element leading to advancements in the industry is the participation of consumers from tier 2 and 3 cities.

Brands and businesses have gradually penetrated the tier 2 and 3 cities' regional areas of the country because they hold immense market potential. Until a few years ago, brands primarily focused on tier 1 cities, but we now witness a shift in dynamic towards tier 2, 3 cities and towns, with both international and domestic brands and businesses moving to these towns and cities and changing mindset of the people there.

Digitization: Propelling Tier 2 and 3 Markets 

Digitization and technological innovations have been a blessing to the retail sector, opening doors to newly introduced opportunities for customers and sellers alike. With the outbreak of COVID-19 and the subsequent lockdowns in the country, technology became a necessity rather than an option as we collectively adapted to the ‘new normal’. This also led to individuals across all age groups seeking safe and reliable digital solutions for their shopping needs, thereby introducing digital platforms as the significant pillar to support the needs of communities, individuals, and businesses alike. Not only does digitization reform the retail segment but it also facilitates a close interplay amongst sectors, mutually benefiting them by increasing their values and efficiencies.

Shift Towards Online Consumption in Tier 2 and Tier 3 Cities

In the current scenario, small businesses and MSMEs have efficiently transitioned towards digitization and e-commerce. Due to this sentiment, local businesses too are evolving by adapting to digital techniques as per the consumer and industry requirements. These businesses are making necessary changes to survive in the growing e-commerce space.

The advent of e-commerce has led to greater democratization of fashion with an expanse of product choices available in all parts of the country. Online sales being a key growth driver for the fashion industry, has led to an eco-system wherein customers interact, belong, and selectively choose from an array of brands before making their preferred purchase decision. It has become essential for e-commerce platforms to touch upon each consumer segment through a variety of initiatives and cater to the unique needs of customers. Additionally, with low entry price points and easy accessibility of products on platforms, customers choose to engage with the rising popularity of the social commerce segment as well.

Shopping Patterns Adopted by Consumers in Tier 2 and 3 Markets

As for fashion, there is a minimal difference in the aspirations of shoppers residing in tier 1 and tier 2-3 regions of the country. With the proliferation of social media, customers have become more informed about making smart shopping decisions. Unique social interactions and aesthetically curated content have led celebrities, influencers, and bloggers to fairly contribute to this, as they build immense exposure and aspirational value for brands. Today, the impact of emerging influencers from tier 2 and 3 cities has risen exponentially. Regional influencers continue to curate content that is central to their distinctive and localized style, amassing a wider audience and revolutionizing the fashion industry at large.

Owing to the current situation in the country, most professionals have moved to their hometowns, leading to an influx in online shopping from these regions. A majority of the shoppers from tier 2 and 3 cities engage in value-based shopping by opting for an array of products widely available on the platform.

At Amazon Fashion, we have seen an increased penetration and coverage of online shopping from tier 2 and 3 regions with more than 80% of our new shoppers from these markets. In terms of fashion, we have witnessed shoppers from these regions opting for ethnic wear such as Lehenga Cholis, Sarees, Kurta, Sandals; winter essentials like Jackets, Coats as well as for opting for loungewear and comfort wear. To meet the demands of our customers, we also house specially curated selections like pocket-friendly fashion, stay-in style for every mood, cool & comfy closet staples, and runway-worthy trends among others. Further, to enhance their shopping journey, we have launched storefronts like The Mask store, The Designer Boutique, and The Plus Size store among others. Features like brand-specific size charts, multiple-angle product imagery and videos, no-hassle return policy, and newly launched technological guides, such as Outfit Builder, Style Snap and Brand Logo Farm ensure that our customers make well-informed purchase decisions.

Personalization: Preference of Shopping in Local Languages

Another facet widening the customer base is the adoption of regional languages. As localization is crucial to shoppers, the intervention of technology has brought about cultural diversity, allowing various sellers to understand and explore the unique shopping experiences offered. Individuals can skim through content available in their native languages, giving them an easy browsing experience. 

Current Scenario and the Way Forward

With the changing market dynamics and growing popularity of online shopping, fashion retailers have become more flexible to engage with tier 2 and 3 cities that promise significant opportunities. In order to cater to the aspirations of consumers in these regions, newer formats that integrate technology and improve shopping experiences are being stressed upon by e-commerce platforms. The fashion industry has become more customer-oriented as opposed to being purely business-focused, since tailoring consumer experiences and letting customers lead their own way is seen as the way forward.

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