For years, the question seemed easy.
Where should a brand expand?
Mumbai. Delhi. Bengaluru. Hyderabad. Pune.
Go where the people are. Go where the
money is. Go where the market is already familiar with your kind of business.
It made sense.
And for a long time, it worked.
But look at the map today.
Something feels different.
Some Markets Are Getting Interesting
The interesting part isn’t that smaller
cities suddenly became important.
They didn’t. People have always lived
there. Businesses have always operated there.
What has changed is what those customers
expect.
A customer in a smaller city can discover
a new brand on Instagram in the morning, watch a review by afternoon, compare
prices online in the evening and walk into a physical store a few days later
already knowing exactly what they want.
The brand doesn’t feel distant anymore.
The internet has already brought it
closer.
And the numbers are beginning to reflect
that shift.
Deloitte and FICCI reported in 2025 that
Tier II and Tier III cities accounted for more than 60% of India’s e-commerce
transactions. Their broader outlook projects India’s retail market to grow from
about US$1.06 trillion in 2024 to US$1.93 trillion by 2030.
The Customer Arrived Before the Store
This may be one of the biggest changes in
the story.
Earlier, a new store often meant
introducing a brand to a market.
Today, the introduction may have happened
months earlier.
A customer may already know the product.
They may have seen someone using it. They
may have read reviews. They may have compared it with three competitors. They
may even have decided that they want it before the first store opens in their
city.
So when the physical outlet finally arrives, it isn’t always saying:
Sometimes it is saying:
That is a very different starting point.
And Then Something Else Happened
Businesses started noticing.
Retailers began looking beyond traditional
formats and locations.
CBRE recorded around 8.9 million sq. ft.
of retail leasing activity across India in 2025, a record level, with retailers
increasingly focusing on experiential stores, new formats and locations beyond
traditional mall environments.
And the movement hasn’t stopped. In the
first half of 2026, India recorded roughly 3.9 million sq. ft. of retail
absorption, with CBRE noting that development is increasingly extending into
peripheral and suburban corridors.
The map isn’t disappearing.
It’s expanding.
But Here’s the Part People Get Wrong
This does not mean every smaller city is
the next big opportunity.
And it certainly doesn’t mean a brand can
take the exact same model from Mumbai and drop it somewhere else.
That’s where things become interesting.
Because a growing market can still be the
wrong market.
A city can have a large population but
weak demand for your particular product.
Another city can be smaller but have
exactly the customers you need.
One location may have excellent footfall
but expensive real estate.
Another may have less footfall but much
stronger repeat customers.
So How Do You Find That Market?
You start looking at the things that don’t
appear on the population chart.
Walk around.
What are people buying?
What businesses are busy?
What do people travel to another city for?
What has opened recently?
What are people complaining they can’t
find?
What are young customers discovering
online?
What brands are people already asking for?
And perhaps the most important question:
That last question can change everything.
Because interest is easy.
Demand is different.
A City Can Tell You More Than a Spreadsheet
Imagine two cities.
City A is bigger. More people. More
businesses. More competition.
City B is smaller. But there is a growing
residential area, a new college, improving connectivity and customers who
currently travel elsewhere for the service you want to offer.
Which one is the better opportunity?
The answer isn’t automatically City A.
That is the point.
This Is Where Local Knowledge Becomes
Valuable
A national brand may understand its
business extremely well.
But someone who actually lives in the
market may understand something the spreadsheet cannot show.
Which people prefer. Where
families spend their weekends. Where students actually go. Which road gets busy
after six. Which local competitor has loyal customers. Which price feels
reasonable.
That knowledge matters.
And it is one reason the franchise model
can become interesting when businesses enter new markets.
The brand can bring its systems, identity,
training and experience.
The local entrepreneur can bring something
equally important:
The Opportunity Isn’t Just in Retail
And this shift isn’t limited to one
category.
It can be seen across consumer businesses.
Food. Education. Healthcare. Beauty and
wellness. Home improvement. Retail. Entertainment. Services.
Deloitte has also highlighted Tier II and
III cities as emerging growth hubs in areas such as home and household
consumption, driven by rising incomes, digital access and changing consumer
preferences.
That makes the trend more interesting.
This isn’t simply about where people shop.
The New Customer Doesn’t Want “Small-City”
Treatment
Perhaps that is the simplest way to
understand the change.
A customer may live in a smaller city.
But their expectations don’t necessarily
stay small.
They have seen better experiences. They
have more choices. They compare. They research. They travel. They share. They
recommend.
And they are increasingly comfortable asking:
That question is where many opportunities
begin.
But Growth Still Needs Judgment
There is a temptation whenever a new market starts looking attractive:
But good expansion isn’t just about being
early.
It is about being right.
The right location. The right format. The
right price. The right customer. The right operating model. The right timing.
Sometimes the smartest decision is to
enter.
Sometimes it is to wait.
And sometimes the opportunity isn’t where
everyone else is going.
Maybe That’s the Real Change
For years, businesses often asked:
The better question might now be:
That question opens up a much bigger map.
It allows a brand to look beyond familiar
names.
It allows an investor to look beyond
headline numbers.
And it allows an entrepreneur to see
opportunity in a market they already understand.
The Next Market May Already Be Growing
It may not have the biggest skyline.
It may not make national headlines every
week.
It may not have the most famous shopping
district.
But perhaps people are spending more.
Perhaps new neighbourhood are appearing.
Perhaps businesses are arriving.
Perhaps customers are becoming more
ambitious.
Perhaps the demand is growing quietly.
And by the time everyone notices it, the
opportunity may already have a few names on it.
That is what makes emerging markets
interesting.
The NFIS Perspective
India’s business story is becoming harder
to draw on a simple map.
Brands are looking for new customers.
Investors are looking for the right
businesses.
Entrepreneurs are looking for markets
where they can build something meaningful.
And across India, customers are becoming
more connected, more informed and more willing to explore.
At NFIS, that is the conversation worth
having.
Not simply :
But:
Because the next big market may not be the
biggest one.
It
may simply be the one you noticed early.
EXPLORE. COMPARE. CONNECT.
NFIS — National Franchise Investment Summit
Connecting franchise brands, investors and
entrepreneurs.
