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Should A Brand Open Franchise In Small Cities? The digital payment giant Paytm has recently said that its 50% user base comes from small cities.

By Sachin M

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Post demonetization, trauma has started crawling down people's head and business, and only after this market has seen a visible difference in the market especially coming from tier II and III cities, which were long overlooked by brands.

The digital payment giant Paytm has recently said that its 50% user base comes from small cities. Smaller cities are undoubtedly the fastest growing market sector, which is why they are considered as India's fastest emerging business location.

A more aspiring, informed and confident consumer is making demands in the marketplace in tier II and III cities that the brands are scrambling to satisfy. Franchisors are more than happy to fulfill this increased demand.

Here are some of the reasons why brands are eyeing smaller cities to expand their presence:

Easily Accessible Location

Small cities are divided into close-knit localities and the marketplace is common for all. The word of mouth spreads faster than any advertisements in small cities due to social gatherings.

Unlike metro cities, small cities are easily accessible by customers.

Minimized Real Estate Rentals

The skyrocketing rentals in metro cities are one of the reasons why brands are moving their focus to tier II and III cities.

Small cities are rolling down areas with cheaper price as compared to the metro cities to welcome brands in their locality.

Opportunity for Unemployed Millennial

Unemployment is another problem India is dealing with right now. The "Make in India" has been proven as the need of the hour, which is why at one hand when entrepreneurs are taking centre stage, the aspiring businessmen are not lagging behind.

The aspiring businessmen are trying to start their business but they find franchising as a secure opportunity to grow fast and eradicate unemployment problems in small cities.

Higher Expectancy of ROI

The small cities have the potential customers and the franchisee knows the market better, which is why they select the desirable brands and the result reflects in the ROI.

Also, the introduction of mall culture is helping brands to find their place to be in the eyes of customers. The small cities are quite excited to welcome brands as well as the malls.

Sachin M

Consulting Editor, India

A keen observer of business and finance, Sachin M is a writer and author with vast experience. He specializes in entrepreneurship, franchising and is also a mentor to aspiring young minds.
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