Industry Odisha Bureau, Sep 24: India premiumisation is spreading from metros into smaller towns and rural markets. Easier EMI financing helps shoppers trade up to higher-value purchases. The finance minister wants the base broader still.
Indian consumers are paying more for phones, fridges, homes and watches. Premium demand no longer rests only on the affluent urban consumer. Smaller towns, semi-urban districts and rural markets are increasingly trading up. Easy EMI financing, ecommerce and rising aspirations are widening that access.
Premium Demand Moves Beyond Metros
Counterpoint Research says premium smartphone purchases in tier-II and beyond markets grew 8% in 2025. Wider financing options helped, said research director Tarun Pathak.
AB InBev India reports premium demand in markets where it barely operated before. In Jharkhand, its premium beer sales rose from zero to 6 lakh cases. One brand’s experience does not make rural India uniformly affluent.
Premium Housing, Cars and Travel Move Upmarket
In H1 2026, Rs 1 crore-plus homes took 54% of sales in eight major cities. That compares with 49% a year earlier, Worldpanel by Numerator data shows.
Utility vehicles took 68% of passenger vehicle sales, though not all are luxury buys. International air travel grew 3.9% in FY26, nearly three times domestic growth. Imports of pricier Swiss watches jumped 37% in the first half. The signals differ, but all point to stronger discretionary spending.
EMI Financing Pushes Shoppers Up the Price Ladder
EMIs lower the upfront cost, bringing higher price bands within reach. They do not, however, raise household income.
Kamal Nandi of Godrej Enterprises Group credits deeper EMI penetration for pricier appliance sales. He also cites ecommerce, value retail and fast fashion in smaller towns. Nandi says first-time and upcountry buyers are choosing larger, higher star-rated products.
Smartphones and Appliances Show the Clearest Upgrade
Phones below Rs 15,000 made up 45% of sales in 2024. That share slipped to 42% in 2025 and 24% this year. Premiumisation and easier credit explain part of the drop. Rising memory costs also pushed brands to lift their portfolios.
In single-door direct-cool refrigerators, 180-190 litre models hold about 60% of sales. The sub-180 litre segment has shrunk 5-6%.
In semi-automatic washing machines, 8-9 kg models now lead. The former leading 7-8 kg segment has shrunk 15%; sub-7 kg models more than 22-25%.
Mass Consumers Still Matter
Premium growth has not erased the mass market. At L’Oréal India, 40% of beauty sales come from items under Rs 100, like shampoo sachets. Managing director Jacques Lebel sees an addressable market of 300 million people. He sees room at both ends, citing wealth creation and global aspiration.
Unilever chief Fernando Fernandez sees the prize in lifting mass consumers as incomes rise. Worldpanel data shows premium-oriented households spending up to 2.3 times more per trip. That applies only in some everyday categories.
Premiumisation Needs a Broader Consumption Base
Finance minister Nirmala Sitharaman has warned against an upgrade limited to cities. She said consumption rests on working families across several sectors. These include agriculture, rural construction, transport and informal enterprise. Urban-only premiumisation, she warned, would weaken growth’s structural durability.
She also described India as at a structural inflection point in consumption. The next phase, in her view, depends on households entering higher-income brackets.
Premium demand is clearly spreading. Whether it becomes broad-based consumption remains the open question.
