Small towns, big achievements

Who would have thought 10 years ago that Amritsar would have greater mall penetration (per thousand population) than Delhi;that Vittorio De Sica’s arthouse classic ‘Bicycle Thieves’ would be shown at an international film festival in Yamunanagar;that the Indian cricket team would be captained with such distinction by a Ranchi boy? Indeed, who would have thought that small towns would be so integral to India’s growth narrative? But is that the full picture? Amidst soaring real estate prices and mushrooming super-luxury car showrooms, there’s also a lament for a vanishing way of life – a time when you could just drop by at a friend’s place. TOI-Crest brings you the story of small-town India 2. 0 and what it has lost and found in transition

Revolution has many colours. But at the Adidas shop on Delhi Road in Rohtak, it’s white. Middle-aged farmers from nearby kasbahs and villages drive in SUVs and ask for the priciest pair of white sneakers. “They hardly bat an eyelid before shelling out Rs 9, 000, the maximum for a pair, ” says Durgesh Sharma, who manages the store. The colour matches with their time-honoured all-white outfit: kurtapyjama and pagri. And as they pay the bill, many also pick up a trendy deodorant, a new-millennium substitute for the traditional ittar.

Five years ago, says Sharma, Rohtak was home to just one big shoe store that stocked most wellknown brands. That was then. “Now you have separate stores for Adidas, Puma, Lotto, Reebok, Woodland, Liberty and many more. Even Nike is coming shortly, ” he says.
It isn’t that this small town in Haryana, about 70 km west of Delhi, has been seized by a sudden shoe fetish. Struck by a tsunami of desires, Rohtak is simply enjoying its affair with hedonism. At least 100 super luxury cars – Mercedes, Audis, BMWs – parade its narrow roads. “I have three Mercedes, all different models, and a white colour Audi, ” says Kamal Mittal, who deals in Maruti cars.

When the Mittals opened the town’s first automobile showroom back in 1992, they sold about 45 cars every month. That number has climbed to 250. Now Tata, Hyundai and General Motors have set up shops adding to that figure;Toyota, Honda and Skoda are coming soon. A fortnight ago, Mayank Agarwal opened his Mitsubishi Motors showroom. He already has three Pajero bookings. “Nobody wants a car jo sabke paas hai, ” he says.

And that’s just the tip of Rohtak’s urge to splurge. At Sheela Cineplex, where the cheapest ticket is Rs 100 and the costliest Rs 200, middle-aged matrons soaked in Bvlgari walk in with Terra handbags. In the evenings, kids shoot pool and gun down terrorists playing Counter-strike in gaming parlours. The town’s young and restless cannot wait for March next year when Rohtak, famous for rewari and gazak, will gets its first multiplex mall, Merion Sky, where they can chew on Domino’s Pizza and down Baskin Robbins ice-cream.

Another mall, Sheetal Lifestyle, is ready to take off. And IIM. Yes, the original Indian Institute of Management is all set to have its Rohtak edition. Scholar’s Rosary, a preparatory school for kids, is fully airconditioned. City walls show study-abroad posters. “Earlier, we went to Delhi for a slice of the good life. But now, Delhi has come to Rohtak, ” says Mittal.
Rohtak is emblematic of what’s happening to the happening side of small-town India. Says Gurcharan Das, columnist and author of India Unbound: “Small towns were always centres of substantial business. But the growth in GDP and middle-class income has led to an explosion of volumes. In the 1960s and ’70s, Indians were hypocritical about money. We loved money but nobody wanted to admit it. ”

Now the hypocrisy has gone. Consequently, many in Tier II and Tier III towns have dumped their squirrel-like stashing mentality for serious spending. Nothing is an excess anymore. Shopkeepers observe that brand consciousness is at an all-time high. Those who have arrived want to announce it with a super luxury car, a designer wedding or a dream holiday. Sociologist Yogendra Singh explains, “The brand consciousness is arising from a rising contact between city, small town and village. There is a leveling of lifestyles. More media penetration has created new psychologies of consumption. A new value system has taken birth. ”

Back in 2008, the R K Swamy/BBDO guide to market planning had named 25 district towns ranging from Erode in Tamil Nadu to Sangli in Maharashtra, from Sangrur in Punjab to Alappuzha in Kerala (Rohtak too was one of them) as emerging markets of consumption, thereby fuelling India’s growth narrative.

The growth, though, as Singh points out, isn’t proportionately distributed among all classes. Far from it, a substantial percentage is either left untouched by it or has emerged worse off. But many with economic muscle and social pedigree have also adroitly located themselves in the sweet spot of emerging opportunities.

In May 2010, Ernst and Young (E&Y ) released a report titled, ‘The new market shehers: Tapping the potential of emerging markets’. For the purpose of the report, India was divided into four categories: top six metros, 22 key urban towns (KUTs) or Tier II towns, 39 rest of urban India (ROUI) or Tier III towns and rural India. The cities and towns were classified on the basis of population, affluence level and growth potential. Some of the key urban towns were Pune, Chandigarh, Jaipur, Ahmedabad, Lucknow, Ludhiana, Cochin, Vijaywada, Vizag and Nagpur. Among the 39 rest-of-urban-India towns were Aurangabad, Allahabad, Gwalior, Bhubaneshwar, Moradabad, Rohtak, Faizabad, Hasan, Shimla and Shillong.

The findings are revealing. Between 2006 and 2008, the growth in the number of malls in key urban towns (55 per cent) was twice that in metros (24 per cent). In 2008-09, sales of refrigerators and washing machines registered growth rates in KUTs and ROUI that were almost double the rate in metros.

The E&Y study also provides insights into consumer behaviour. In Surat, it says, women surprised retailers and manufacturers with “their adventurousness in trying out new things and their willingness to pay large amounts for beauty treatments and products. ” Beauty treatments such as age correction, body sculpting and removing skin imperfections have become increasingly popular there.

It’s no surprise, therefore, that the industry is putting its money where the moolah is. According to 2007 industry estimates, about 30-35 per cent of the urban advertising expenditure was spent on KUTs and ROUI. Now they potentially command 40-50 per cent of the expenditure. Samsung’s dealership network has increased from branch offices in 20 towns in 2007 to 50 towns in 2008. Skoda has increased its marketing budget for non-metros from 25 per cent in 2006 to 40 per cent in 2009, the E&Y study says. Simply put, the research suggests “an uptake in the consumption of premium brands and services in KUTs”.

Within the big picture of liberalisation, every town has its own specific reason for its growth: some have benefited from the establishment of small industries, others have flourished as BPO hubs, some have profited from their proximity to a metropolis.

Saloni Nangia of management consulting firm Technopak adds that the consumption uptake is partly spurred by small-town middle-class women working outside homes. “This has improved their quality of life, given them financial freedom. They decide much of their own lifestyle spends, ” she says.

Nangia also points out that with real estate and labour being cheaper, many MNCs have shifted to small towns. Rohtak, for instance, has gained from being Haryana CM Bhupinder Singh Hooda’s town. About 5, 500 acres of land was acquired around it to set up an Industrial Model Township. Integrated townships – Omaxe City and Sun City – are coming up. “In the past one year, land rates have doubled, ” says Jitesh Gupta of Omaxe. The rural elite benefiting from the boom are the ones who want the white Adidas shoes and the Pajeros. They are the driving force behind Rohtak’s romance with conspicuous consumption.

The insatiable hunger for more cuts across regions. Aurangabad, in north-west Maharashtra, wasn’t satisfied buying 150 Mercedes-Benz worth Rs 65 crore;builders, industrialists and others have come together to book 101 BMWs. All the cars will be delivered in January, 2011.

Even smaller, wannabe towns that have escaped the attention of management consultancy reports have discovered ways to gorge and indulge. Ask Ishita Swaroop. Her company 99labels. com sells firang fragrances, handbags, lingerie and watches online and 32 per cent of her buyers come from towns like Jorhat, Jammu, Hajipur, Sambalpur, Dimapur. There’s Ranjan Kumar (name changed on request) from Chandausi who recently bought Bwitch lingerie for his wife online – “I enjoy ordering intimate apparel for my wife without discomfort, ” he says – and Julia Manchong (name changed) from Guwahati has bought perfumes from D&G and Police.

But the need to flaunt greed is only one side of the small-town growth story. Those who are yet to join the gravy train are working hard at it. Das narrates a story that illustrates the small town’s fibre. “I did a Bharat darshan while working on India Unbound. In a Tamil village, I met a 14-year-old named Raju, who served tea and coffee at a wayside dhaba. In the evenings, he was learning computers. He confidently told me that he had found the secret of success – learn Windows and 400 words of English. His hero was Bill Gates and he wanted to be the richest man in the world. Raju reflects the spirit of small-town India: hunger, ambition, a willingness to work hard. ”

Fulfilling that ambition now appears accessible. The expansion of media, including the recent growth of the DTH industry, has democratised experiences and aspirations. Aditya Swamy, channel head, MTV India, found this while interviewing contestants for the channel’s Roadies show. The Tier II town lads, he says, are not short of social confidence in any way. “They dress the same way, use the same gadgets, consume the same net content. There is a homogenisation of young people. Only the small town guys have a hunger to prove themselves more, ” he says. One edition’s winner, Ashutosh Kaushik, ran a dhaba in Saharanpur. A majority of MTV’s Facebook community belongs to Tier II towns. As Nangia says, “City and small-town India are on the same page now. ”

This has caused, as Singh says, “a blurring of identities. ” Today, the term ‘small town’ is perhaps explained by what it is not: it is neither metro nor hinterland. Marketing survey categories such as Tier II and Tier III towns fail to fully decode their mindscape, their soul. Even within small towns, there are hierarchies of population, economics and mentalities. But though they are in different stages of development, in different moments of history, most are united by a common desire for the good life. The binge isn’t just a reflection of a nouveau riche behaviour;it is also an indicator of how middle India has been liberated from its past, from the Hindu rate of consumption.

Which is why towns that once swore by grandmother’s pickles and maa ke haanth ka khana (food cooked by mom) are now enjoying eating out. Towns like Allahabad and Kota are saying ‘I’m loving it’ to new McDonald outlets. And Jalandhar and Patiala are feasting on aloo da tikki burgers. “About 70 per cent of our new outlets are in Tier II and Tier III towns, ” says Rajesh Maini of McDonalds.
Similarly, Nagpur, that once boasted of only Soaji (spicy Nagpuri cuisine) joints and highway dhabas is now biting into Subway sandwiches, sipping cappucino at Cafê Coffee Day. And that’s when it is not in the hookahjoints. The first mall, Landmark, came in 2003. The number has gone up to eight, four with multiplexes where young girls try out Revlon and Maybelline. Three more are in the works.

The truth is that middle-class Indians love to shop. As Das points out, “Even in our hypocritical socialist days, the few who went abroad and who had money were famous for shopping till they dropped. There has also been an austere, Gandhian streak in our society but it was always an aspiration, limited to a few. Today India is a consumptiondriven economy and this is also a part of the small-town ethos. ”

The question is: In a country with so many versions – India Shining, India Invisible, India Ignored – can the small towns, driven by an expanding moneyed class in them, in nearby mofussils and villages, continue to flourish as growth hubs? Or will the larger contradictions bring them down?

Amit Mitra, secretary general, Ficci, believes that just as the future of economic reforms lies with the states, the future of consumer and knowledge products lies with small towns. “The challenge for small towns would be overcoming the limitations of urban planning and civic facilities. If these aspects are taken care of, small town will be big for business for long, ” he says.

Das sums it up succinctly: Small town 2. 0 is a crucial part of India 2. 0. 

With inputs from Deepender Deswal in Rohtak, Falguni Banerjee and Vaibhav Ganjapure in Nagpur

Top six cities now contribute a mere 27 per cent of urban consumption;the share of key urban towns or Tier II towns and rest of urban India (Tier III towns) is now 73 per cent Around 50 per cent of high-end TVs are sold outside the metros UFO Moviez, the country’s largest digital theatre chain, has more than 1, 000 screens across India. Of these, 80 per cent are in Tier II and Tier III Towns

Social networking site Bigadda gets roughly 50 per cent of its registered users from non-metro cities. Almost 60 per cent of Bigadda’s page views come from such cities

Gaming arrived rather late in smalltown India. But already gaming portal Zapak’s 40 per cent gameplexes are in non-metros
According to Planning Commission in 2007, the government pledged 29 billion dollars to make Tier II towns economic hubs by 2014 

Source: Ernst & Young’s May 2010 report titled, ‘The new market shehers: Tapping the potential of emerging markets’



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