66% of new D2C orders come from India’s Tier 2 and 3 cities
66% of new D2C orders now come from Tier 2 and 3 India. The next high-value consumer trades up by occasion, not identity.
An order for Korean skincare is placed from Patna. In Ranchi, a shopper compares premium smartphones over reviews and chooses an EMI instead of paying all at once. A household that once bought the smallest detergent sachet now picks a bigger pack at full price.
None of this is a one-off. Across FMCG, beauty, BFSI and durables, marketers are watching Tier 2 and 3 consumers move past basic buying: researching more, experimenting more, and spending more when they believe the quality, convenience or experience is worth it.
The numbers have left the metros
Digital commerce is no longer a big-city story. A Deloitte-FICCI report puts over 60% of India’s e-commerce transactions in Tier 2 and 3 cities. PwC estimates more than 12.5 crore Indians shopped online for the first time in recent years, most of them from Tier 2, 3 and 4 towns. And Unicommerce says 66% of all new D2C orders in FY26 came from these smaller cities, contributing 60% of incremental GMV.
Premium is following access. In Bain & Company and Flipkart’s “How India Shops Online 2025” report, the share of premium men’s sneaker brands sold in Tier 2 and smaller markets during January–September 2024 was about 1.8 times its 2022 level; for premium dry fruits it was around 1.4 times.
Who is the next high-value consumer?
For Binit Kumar, Marketing Head for health supplements at Dabur India, this consumer is not a brand-new segment but an evolution of the existing base. He describes them as “light buyers with widening repertoires” who buy across more brands instead of staying loyal to one. Their spending is occasion-led rather than identity-led: gifting, a winter immunity routine or a child’s daily health regimen can each trigger a trade-up inside a category.
“The evolution over five years isn’t that this consumer became aspirational; they always were. What changed is that supply, distribution and attention finally arrived where they live,” he adds.
Saket Sinha, founder of Kyntraa, frames it as access beating geography. A shopper in Ranchi, Guwahati or Coimbatore can now reach the same brands, influencers, reviews and financing as someone in Mumbai or Delhi. “Geography is becoming history,” he says.
The quiet signals of someone ready to trade up
The earliest signs are behavioural and unglamorous, Kumar notes. He points to two in particular:
- Pack-size laddering: a household moves from the smallest sachet or trial pack to a mid-size SKU at full price, instead of waiting for a discount.
- Occasion expansion: the category starts appearing in more moments of daily life. “Trade-up almost always follows a widening of when the category gets used, not a deepening of loyalty,” he says.
Sinha adds research and credit to the list. Buyers now compare prices, features, videos, expert views and customer reviews before deciding. They increasingly use EMIs, Buy Now Pay Later and loans to own aspirational products. Price still matters, but the question has shifted, he says: “Is it worth paying more?”
Is every brand really fighting for the same wallet?
Here the two experts part ways. Sinha argues categories do compete for the same incremental rupee — a raise could go to a smartphone, skincare, a holiday or an SIP. His test for marketers: “Who can take away my customer’s next rupee?”
Kumar is more measured. He points to the Duplication of Purchase Law: brands mostly compete inside their own categories, in line with penetration, and cross-category substitution is weaker than the “share of wallet” story suggests. The real scarcity, he says, is attention and availability. The practical advice is to be distinctive, be mentally available at more Category Entry Points than competitors, and be physically present at the moment of decision.
What to do with this
Geography no longer identifies the premium buyer. The useful work is watching for the moments when an existing customer widens their repertoire, uses the category on a new occasion, or ladders up in pack size at full price. That is the window to introduce a premium tier, offer financing or shift messaging from price to worth.
India’s next high-value consumer is less a new person to discover and more a behaviour change to catch early.
Source: BMI Publications Private Limited
