Urban areas account for 30% of the total population in India, and the rest of the total population resides in tier II and tier III cities, which remains untapped
Franchising has brought the revolution in the India market. Till recent times, the franchise biggies were confined to urban and suburbs. However, with the changing time, the small towns have also imparting huge growth potential for brands planning to expand their footprints. Urban areas account for 30% of the total population in India, and the rest of the total population resides in tier II and tier III cities, which remains untapped.
With overcrowded market place, soaring real estate prices and increased competition is causing franchise brands to make the pragmatic shift of entering the small towns. However, it not only franchise brands who are benefitting from this, but franchises are also offering entrepreneurship opportunities to aspiring entrepreneurs there, as a result uplifting the economic condition of small towns.
Small Towns Attracting Big Franchise Brands
There was a time when opening an outlet in tier II and tier III cities were a nightmare of industry players. But, with the changing lifestyle of the small towners and the exposure to TV, smartphones, Social media, has revolutionised the whole scenario. It is now not an uncommon sight to see people, from tier ii and tier iii, wearing branded apparel, or sipping coffee in big coffee chains.
Small towns are a highly untapped market with huge growth potential. People there are deprived of facilities available in metros and thus, increased demand. Experts agree upon the fact that their major growth is coming from tier II and tier III only.
Factors facilitating the growth
There are numerable factors which are contributing to the growth of the franchise brand. The increased disposable income, brand consciousness, and love for better living standards have led to a large number of people preferring to visit branded beauty salons or restaurants.
Another major reason which is bringing these cities into the limelight is connectivity. Recognising the potential of these upcoming cities, the Indian government’s ambitious Regional Connectivity Scheme is attempting to create and renovate airports, making accessibility to smaller cities affordable.
People from small towns are realising the importance of branded products and now prefer them over local brands. Especially millennials, who these days go to metros for higher education. They visit big eating places and salons but the unavailability of such brands in their home towns creates little disappointment for them. Identifying the need for such brands, people are looking to get franchises of big industry players from all the fields. Thus, franchises are offering entrepreneurship opportunity to small towns and also increasing employability.
Better Use of land and resources
Most of the people in small towns have vacant land or barren land, which is of no use. Therefore, people are considering taking franchises to leverage on this unused space. Franchise brands are giving them the opportunity to make better use of this land by turning it from liability to an asset and earning handsome revenue.