Scribd
Upload
102 views2 pages

Tier 2 Consumer

Tier II consumers in India prefer platforms in their native language and prefer paying cash-on-delivery. Growth of online retail in tier II and beyond cities is driven by the expansion of smartphone and internet users. These cities contributed close to 66% of India's total online consumer demand. Younger consumers in tier 2 and 3 cities are more open to experimentation and options for online shopping. They prefer lower prices and spend more on personal care, clothing, and shoes. Cash-on-delivery remains the preferred payment method due to a lack of trust in online payments. Evolving consumer behaviors and adoption of technology require companies to adapt quickly by focusing on customer needs and developing unique offerings.

Uploaded by

yashica
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
102 views2 pages

Tier 2 Consumer

Tier II consumers in India prefer platforms in their native language and prefer paying cash-on-delivery. Growth of online retail in tier II and beyond cities is driven by the expansion of smartphone and internet users. These cities contributed close to 66% of India's total online consumer demand. Younger consumers in tier 2 and 3 cities are more open to experimentation and options for online shopping. They prefer lower prices and spend more on personal care, clothing, and shoes. Cash-on-delivery remains the preferred payment method due to a lack of trust in online payments. Evolving consumer behaviors and adoption of technology require companies to adapt quickly by focusing on customer needs and developing unique offerings.

Uploaded by

yashica
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Tier II consumers can be categorised as those who have high aspirations but limited access

to brands and products, prefer platforms to be in their native language, and prefer CoD as a
payment method,
Growth drivers : The expansion of the number of smartphone users in addition to the
increase in the number of internet users is a major driver of the online retail market
tier-II and beyond cities contributed close to 66 per cent of the total online consumer
demand in India.
The sectors that stood out were electronics and home appliances, fashion and accessories,
health and pharma, and fast-moving consumer goods (FMCG), with an average growth in
sales of 133 per cent.
The dramatic rise in consumption in tier 2 and tier 3 cities can be attributed to evolving user
preferences in these smaller cities. The younger population in these regions are open to
experimentation, and like the options that online shopping provides them. 
buyers in smaller towns are more value and price conscious. They go in inexpensive mobile
phones and are ready to spend money on personal care products, garments, ethnic wear
and branded shoes.

Business Head (E-commerce and Surface), BlueDart, cash-on-delivery (COD) continues to be

the preferred mode of paying in tier-2 and -3 towns. Customers prefer to pay only after

getting the product in their hands, although more than a dozen pre-paid payment options

are available.

The key, according to Bharath Ram, Vice-President – Product, Engineering and Design,

Flipkart, is trust. The level of trust will manifest itself when buyers are more open to paying

at the time of ordering. Managing the cash, Bhushan pointed out, for COD orders was in

itself a big challenge for the companies.

Flipkart’s Ram said buyers in tier-2 and -3 towns preferred images over text while browsing

product categories on the app. They also preferred voice assistance to give a human feel to

the app. The e-commerce marketplace was available in regional languages and he expected

those using the app in regional languages to outnumber those using English by a margin of

2.5 times.

Change in spending patterns : According to research, there has been a steady, progressive
change in the customer's aspirations and spending behaviour and ability. Shopping has also
become more social. With the tendency to shop with family members and friends, the urge
to shop online is increasing in frequency. Customers today highly value instant gratification
as compared to asset creation which indicates the different purchase and trade-off
decisions. For instance, aspirational customers from tier II and III cities have moved away
from the notion of wanting a car and house to wanting an international vacation. They are
willing to pay the price for their demanded comfort level. Social media plays a large role as
well. It has been able to influence customers in a way that they want to fit in particular
categories with their peers.
With these constantly evolving consumer behavioural patterns and increasing adoption of
new technology, companies need to be able to focus on customer needs - as well as adapt
their business model swiftly to the changes in the market. Hence, for Amazon, Flipkart, or
Snapdeal to stay one step ahead of the other, it must develop their own unique offerings
and increase their flexibility.

You might also like