India's Non-Metro Cities Outpace Metros in Retail Growth, Report Finds

A joint report by data analytics firm ClarityX and Mastercard has found that India's retail growth is decentralising, with smaller cities recording consumption gains that outstrip those of established metros. The report, titled Winning in India's Retail Sector – Harnessing Next-Gen Analytics to Drive Transformative Growth, analyses demand and supply trends from 2023 to 2025, using geospatial data from MapmyIndia to track retail activity at a granular level.

The findings show that offline consumer spending grew 20 percent between 2023 and 2025, while the number of retail outlets expanded by 25 percent over the same period. Among the sharpest divergences recorded was in grocery spending, which rose 74 percent nationally — but grew 104 percent in Tier 3–5 cities compared with 32 percent in Tier 1–2 cities.

The report identifies food and beverage as the fastest-growing segment in organised retail, with 89 percent growth over three years. Electronics, durables and jewellery remain in early growth phases nationally, while footwear has reached maturity across all city tiers. Apparel and food and beverage are approaching maturity.

Spending in the bracket above Rs 25,000 recorded the highest growth across categories, which the report attributes to a shift toward higher-value purchases across income segments. The report notes that premiumisation — the trend of consumers moving toward higher-priced goods — varies substantially by geography and income level, and does not follow a uniform pattern.

With Tier 1 and 2 markets showing signs of saturation, the report highlights highway and high-street retail corridors as emerging demand engines. Fuel and food consumption data along these routes indicate rising footfall and early-stage brand adoption, pointing to the formation of new retail clusters outside traditional urban boundaries.

Rakhi Prasad, co-founder of ClarityX and non-executive director at CE Info Systems (MapmyIndia), said the findings reflect a broader shift in purchasing power: "The seeping of retail demand and its premiumisation at lower demographics are strong markers of democratisation of purchasing power and inclusive economic growth."

Rajesh Chopra, Senior Vice President and Head of Advisors for South Asia at Mastercard, said the combination of payments data, traffic patterns and location intelligence offers retailers a more complete picture of market conditions. "The retailers who turn this intelligence into decisive action will be the ones who lead," he said.

ClarityX is an AI-driven analytics firm founded by the founders of MapmyIndia, a publicly listed geospatial technology company. Mastercard, which operates in more than 200 countries, provides payments infrastructure and data advisory services. The report draws on aggregated and anonymised payments data alongside MapmyIndia's location and point-of-interest datasets.