India’s premiumisation wave spreads beyond metros, lifting demand from beauty to beer
Consumers are trading up across homes, cars, watches, smartphones and FMCG, with brands such as L’Oréal India, Godrej Enterprises Group and AB InBev targeting affluent demand in smaller cities. Premium smartphone purchases in tier-II-and-beyond markets rose 8% year-on-year in 2025, while Swiss watch imports climbed 37% in H1 2026.
What happened
L'Oreal India · Indian consumers are trading up across housing, travel, vehicles, FMCG, appliances and smartphones. Brands including L'Oreal, Godrej and AB
Key facts
- 54% of residential sales in eight major cities were above ₹1 crore in H1 2026, versus 49% a year earlier
- International air travel grew 3.9% in FY26
- Utility vehicles accounted for 68% of passenger vehicle sales
- Swiss watch imports rose 37% in H1 2026
- L'Oreal India generates 40% of beauty sales from products below ₹100
What changed
Indian consumers are trading up across housing, travel, vehicles, FMCG, appliances and smartphones. Brands including L'Oreal, Godrej and AB InBev report premium demand spreading beyond metros, supported by rising incomes, ecommerce reach and EMI financing.
Why this matters
Expand premium assortments, financing and omnichannel service into tier-II and smaller cities, where trading-up demand is accelerating across categories.
What to watch
- Growth in premium smartphone, beauty, spirits/beer, jewellery, watch and appliance sales from tier-II and tier-III pin codes.
- EMI share of sales, consumer-credit delinquencies, BNPL approval rates and trade-in volumes.
- Same-store sales and gross-margin trends at premium retail outlets outside top metros.
- Expansion pace of premium brand distribution, mono-brand stores, experience centres and service hubs in smaller cities.
- Rural and non-metro wage growth, inflation in essentials, and consumer-confidence readings.