INDIA’S

TIER-3 CITIES
From a retail point of view
Presented by
Jitendra kumar
Deepak tiwari
Rohit sharma
Anuj sharma
 Classification of the cities
• The Status of Indian cities comprises two
ranking systems used by the Government of
India.
1. Compensatory City Allowance (CCA):
2. House Rent Allowance (HRA): This classification
was initially based on the recommendations of the Fifth Pay
Commission of India (1997)
 CCA CLASSIFICATION
• On This Basis, Following Cities Come Under
Tier-3 Category:
• Kochi,Patna,Indore, Bhopal,Guntur,Vadodara,
Ludhiana,Agra, Nashik,Kakinada,Raipur,
Madurai,Varanasi,Rajkot,Rajahmundry
Jabalpur,Jamshedpur,Allahabad
Amritsar,Asansol, Dhanbad
 HRA CLASSIFICATION
• According to HRA following cities come under tier
– 3 category.
Kochi, Patna, Indore, Bhopal, Guntur, Vadodara,
Ludhiana, Agra, Nashik, Kakinada,Raipur
These classification is important because indian
small cities are comprised with service class
people, those are in turn will be the prospect of
modern retail development in these cities.
 LaSalle-Meghraj survey(2007)
• LaSalle-Meghraj is a firm which works for retail location development.
According to this India's tier-3 cities can be categorized into two following
categories:-
• Emerging cities:
• These cities are having the presence of national and international retailer.
• Mall developer companies are selectively focusing on these cities because
of:
• Growing income.
• Scarcity of branded product

KOCHI,INDORE,LUDHIANA,AGRA,NASHIK,COIMBATORE,MYSORE,BHUBNES
WER,JALANDHAR,MANGLORE,VIZAG,THIRUVANANTHPURAM,MEERUT,JA
MSHEDPUR,ALLAHABAD AMRITSAR,NAGPUR,GOA,KANPUR
 Nascent cities
• LaSalle-Meghraj SURVEY has named these cities
as Nascent Cities because of:-
• Population being between 1-1.5 million.
• Low per capita income
• Limited corporate activity
• Cities are:Jodhpur, Patna,Varansi,Meerut,Rajkot,
Aurangabad, Bhopal,sonipat,vijaywada, Madurai,
Ranchi, Gauhati, Jabalpur, Asansol, Dhanbad,
Panipat, Kolhapur,srinagar,solapur
 Top 20 tier-3 cities of india
• On the basis of CCA, HRA and LaSalle-Meghraj
survey we can select top 20 tier-3 cites which are:

KOCHI,INDORE,LUDHIANA,AGRA,NASHIK,COIMBA
TORE,MYSORE,BHUBNESWER,JALANDHAR,MANG
LORE,VIZAG,THIRUVANANTHPURAM,MEERUT,JA
MSHEDPUR,ALLAHABAD, VIJAYWADA,
AMRITSAR,NAGPUR,GOA,KANPUR,
PATNA,SONIPAT, AURANGABAD,
Modern retail development in tier-3 cities of
India.
• In emerging cities 13% national organized
retailing has taken place by 2009
• No. of malls in these cities are 2-5 by 2008.
• In nascent cities there is 3% modern retailing
has taken place and 1-2 mall are there by
2008.
 Opportunities for the formats.
• Mixed use malls
• Branded store
• Supermarket/hypermarket
• First mover advantage
• Department stores.
 International retailing in tier-3 cities

• Some of the tier-3 cities are having presence

of franchise owned retail stores.
• Some fast developing cities such as
KOCHI,INDORE,LUDHIANA,AGRA,NASHIK have
the presence of international retailer like
Levie’s, Addidas, Reebok,Nike etc.
 Refrences
• http://finmin.nic.in/the_ministry/dept_expen
diture/miscellaneous/hracca.pdf
• Jones lang lasalle-meghraj research
THANK YOU