How India’s tier 2/3 cities are driving affordable luxury & premium brands

The metros dominated India's premium consumption story for a long time. Delhi, Mumbai, and Bengaluru were the markets where brands tested their strategies, launched collections, and gauged consumer appetite. That dynamic has shifted. 

Today, the most exciting growth for affordable luxury and premium brands is coming from Tier 2 and Tier 3 cities such as Indore, Surat, Vadodara, Varanasi, Prayagraj, Guwahati, Raipur, Lucknow, and Nagpur, among others. These markets are no longer secondary. 

They are at the forefront of shaping how India consumes premium products, driven by rising aspirations, digital exposure, and an evolving middle class that is brand-conscious yet value-oriented.

The aspiration curve has flattened

Thanks to smartphones, social media, and OTT content, global trends travel seamlessly to smaller cities.

A consumer in Lucknow or Nagpur can now see the same fashion reel, review, or influencer endorsement as someone in South Mumbai. The gap between awareness and access has narrowed dramatically.

But the difference lies in how consumers approach their purchases. In smaller cities, a handbag, watch, or piece of luggage is often linked to a milestone, be it a wedding, festive occasion, academic achievement, or professional breakthrough.

These are researched, thoughtful purchases, where brand credibility and after-sales assurance matter as much as design.

Affordable luxury as the sweet spot

This is precisely where the premium, mid-premium and affordable luxury categories thrive.

Consumers want global styling and aspirational experiences, but without the prohibitive pricing of traditional luxury. They’re willing to pay a premium, provided the product justifies itself through quality, durability, and service.

As a company operating in this space, we've observed a double-digit growth in demand outside of metro areas. Our network of 50 stores across India, many of them located in Tier 2 and Tier 3 cities, has shown us how strong the appetite is when consumers are provided access to organised retail and branded experiences. 

These stores are not just sales points; they are validation hubs where consumers can touch, feel, and build trust in the product before buying.

Global brands, local reach

One of the most exciting trends is the desire for international labels in smaller cities. Consumers no longer see global brands as the preserve of metros. Bringing fashion-forward brands such as Juicy Couture and Tommy Hilfiger to India allows us to cater to this growing aspiration. 

For a young professional in Surat or Lucknow, the ability to buy an international brand locally is not just about the product; it’s about being part of a larger lifestyle movement.

Manufacturing to bridge aspiration and affordability

Another important shift is happening on the supply side. To make affordable luxury truly accessible, brands need to rethink their cost structures and service models. Local manufacturing plays a critical role here.

By producing closer to the market, brands can ensure two critical outcomes:

1. Competitive Pricing: Products designed to global standards can now be priced more accessibly, which is vital for value-conscious buyers in Tier 2 and Tier 3 markets. 

2. Extended warranty & faster service: Having a domestic manufacturing and service base means they can back their products with longer warranties and quicker repair turnaround times. 

For milestone-driven buyers, this assurance builds lasting trust. We recently set up a manufacturing facility for Tommy Hilfiger travel gear in Ujjain, Madhya Pradesh.

This combination of global aspiration, localised production, and strong service allows affordable luxury to truly resonate outside metropolitan areas.

Omnichannel and trust-building

Another unique feature of these markets is the omnichannel journey. While online platforms help consumers discover and research, physical retail remains central to the final purchase. 

Buyers want to feel the texture, check the finish, and ask detailed questions before committing. Such behaviour makes store staff, visual merchandising, and service infrastructure even more important.

That said, the digital influence is undeniable. Regional influencers, vernacular content, and community-driven digital campaigns often perform better than big-ticket celebrity endorsements. 

The decision-making process may start with a YouTube review in Hindi or a regional language Instagram Reel and culminate in an in-store purchase.

Local context, global mindset

Tier 2 and 3 cities also serve as a reminder that the concept of "premium" is not universally applicable. Regional festivals, wedding seasons, and cultural events often drive sales spikes. 

A luggage promotion around the wedding season in Jaipur or a handbag collection aligned with Diwali in Indore resonates far more than a generic campaign.

At the same time, consumers want to feel connected to global conversations. This balance of celebrating local context while delivering international design is the crux of success in these markets.

The road ahead

India's smaller cities will shape the consumption story of the upcoming decade. With rising disposable incomes, improving infrastructure, and increasingly brand-conscious consumers, Tier 2 and Tier 3 markets are not just growth opportunities; they are the backbone of future demand for affordable luxury and mid-premium brands.

At Brand Concepts, we've learnt that success here requires more than just distribution. It’s about building trust, ensuring durability, offering after-sales assurance, and making global aspiration locally accessible. 

What’s clear is this: the future of premium consumption in India won’t be defined by metros alone. It will be authored in the heart of India’s rising cities, where aspiration meets pragmatism and where affordable luxury is not just desired but demanded.

(Abhinav Kumar is the Co-founder and CEO of Brand Concepts Limited, a leading Indian fashion and lifestyle retail company.)