Tier 1,2,3 Cities in India
Tier III cities in India are those minor cities with a population of less than one million, such as Madurai, Baroda, Nashik, and Trichy. In contrast, Tier II cities like Ahmadabad, Kanpur, Chandigarh, Patna, Dehradun, and Pondicherry have larger populations of around one million.
Understanding Tier III Cities
According to the government classification, cities with a population ranging from 50,000 to 100,000 are identified as Tier II cities, while those having a population between 20,000 and 50,000 fall under the Tier III category.
For businesses looking to expand, establishing a presence in a Tier III city can be a smart move. This allows companies to take advantage of affordable real estate and lower labor costs. 😊
Benefits of Setting Up in Tier III Cities
However, it’s important for businesses to be ready to invest time and money. They will need to build basic infrastructure, manage logistics, and train local employees in essential tasks. Adapting to a less developed business environment can also be part of the journey.
For companies already operating in a Tier I city, moving some operations to nearby Tier II or Tier III cities can help decrease costs significantly. For instance, staff focused on back-end functions could be relocated to these emerging cities.
In the same way, companies can shift manufacturing processes to smaller cities, while keeping management teams based in Tier I locations to ensure smooth operations.
If there are existing industry clusters that align with the company’s goals, they might find that Tier III and Tier II cities can offer Tier I capabilities at a fraction of the cost.