Product Management often centres around metro cities, but what about the untapped potential in Tier 2 and Tier 3 cities?

The Untapped Potential
Metro cities constitute only 15% of India’s population, yet they dominate the spotlight in Product Management. Meanwhile, Tier 2 and Tier 3 cities remain underexplored, contributing approximately 31.89% and 16.64% to India’s GDP.

The Solution: A Multi-Faceted Approach

• Local User Research: Understand user behaviours via localized market research.
• Geographically targeted MVPs: Create and launch MVPs specific to these markets.
• Local Partnerships: Partner with local vendors to offer localized features.
  Infrastructure Adaptation: Design products for low-speed internet connectivity.

The Benefits

• Untapped User Base: Gain access to potential users for data-driven decision-making.
• Cost Efficiency: Reducing operational costs could significantly increase a startup’s runway by up to 40%.
• Innovation Surge: According to a NASSCOM report, 44% of new startups in India come from outside metro cities.

Additional Considerations

• Comparative Data: Firms that expanded into these cities experienced a 30% growth in their user base and a 20% increase in revenue within a year.
• Challenges as Opportunities: Limited connectivity is more than just a hurdle; it is an innovation opportunity.
• Socio-Economic Impact: This strategic change can contribute to balanced regional economic growth.
• Success Metrics: Track user engagement, customer acquisition costs, and retention rates.

Real-Life Example:
Zerodha expanded its user base by 25% within a year by strategically targeting Tier 2 and 3 cities.

Takeaways

• Tier 2 and 3 cities are rich in untapped potential.
• Localized strategies are essential to effective market penetration.
• This shift isn’t just profitable; it’s socially and economically impactful.