Why The Next Big Gifting Revolution Will Come From Smaller Cities

 For decades, metro cities such as Delhi, Mumbai, Bengaluru and Hyderabad have been the traditional epicenters of spending power, lifestyle upgrades and aspirational consumption. While they continue to drive India’s consumer growth, Tier 2 and 3 cities are fast emerging as powerful growth centers in their own right. 

This expansion is especially visible in the gifting category, where rising incomes and evolving aspirations are fueling a fresh wave of demand.

Gifting holds deep cultural significance in India, being central to festivals, milestones, and social traditions, making it both an emotional and economic driver. The numbers tell the story. India’s gifting industry is currently valued at USD 75.16 billion (Rs 6.25 lakh crore) in 2024 and is expected to grow to USD 92.32 billion by 2030. 

Nearly 50 per cent-55 per cent this growth over the next five years is expected to come from Tier 2 and 3 markets, fueled by rising disposable incomes and aspirational lifestyles. Corporate gifting already contributes nearly Rs 12,000 crore, or about 16 per cent of the market, and is expanding at two to three times the pace of consumer gifting. 

Within this growth, Tier 2 and 3 towns like Lucknow, Indore, Patna, Coimbatore, and Jaipur are not just buying more, but buying better. Consumers are moving beyond typical mithai and flowers, towards personalised hampers, luxury chocolates, premium gifts that elevate the gifting experience, and curated offerings that were once a metro-only expectation.

Cakes, in particular, have emerged as the fastest-growing gifting categories in this shift. No longer reserved only for birthdays or anniversaries, consumers are increasingly opting for premium cakes, personalised designs, and same-day deliveries to celebrate festivals, milestones, and even everyday moments. 

With innovation in flavors, presentation, and delivery assurance, cakes are now at the heart of modern gifting, blending indulgence with emotion.

Drivers Behind Transformation

The transformation is only possible due to the logistics and fulfilment infrastructure now in place. Customer Fulfilment Centres (CFCs) across India have ensured faster delivery cycles, improved overall product freshness, and made premium options accessible even in smaller cities. 

Without this backbone, the gifting boom in India would not have happened. With India's gifting industry expected to exceed USD 92.32 billion by 2030, the next decade will be characterised by:

● Tier 2 and 3 Adoption: Smaller cities are driving significant growth and contributing meaningfully to the overall market, steadily expanding their role alongside metros.

● Hyper-personalisation: AI-led curations, local relevance, and custom hampers.

● Speed as Standard: Same day, or even 30-60 min deliveries, as customer expectations have risen.

● Experiential gifting: Moving beyond products to curated events, experiences, and digital formats.

Upside Down

The gifting industry has always been about celebrating moments and strengthening relationships. What is changing now is scale, speed, and personalisation, and this shift is being led by India’s emerging cities and new-age consumers.

Simultaneously, India’s luxury segment is surging, growing at approximately 20 per cent year-on-year, and projected to hit USD 85–90 billion (around Rs 7 - 7.5 lakh crore) by 2030, and spotlighting premium gifting’s massive upside. Interestingly, much of this luxury demand is now diffusing into Tier 2 cities. From fine wines in Chandigarh to artisanal hampers in Indore, premium gifting is no longer a metro phenomenon but a lifestyle aspiration being democratised.

This change also has a strong cultural perspective. Festivals and occasions in Tier 2 and 3 towns are often celebrated with more fervor and emotional connection than in metros, as cities often dilute tradition through busy lives. 

With increasing disposable income, these celebrations are connecting traditions with modern aspirations. From the perspective of the gifting industry, there is a unique duality in our industry that is benefiting from preserving our heritage and leveraging convenience, and smaller towns are a unique and powerful market to help deliver consumption trends.

Future Of Gifting

Technology is acting as a great equaliser. The rise of regional-language content and social media has been transformative, with vernacular platforms, social commerce, and regional influencers enabling gifting brands to build trust and relevance beyond metros. 

The democratisation of discovery and delivery is reshaping the gifting landscape, and with digital penetration expected to reach nearly 1 billion users by 2028, the next frontier will be powered by data, vernacular content, and localised storytelling.

For entrepreneurs, brands, and investors the message is clear, the future of gifting is not just to be found in India's large metros - it is expanding rapidly across Tier 2 and 3 cities, where new markets and opportunities are taking shape. Those that see and invest in this shift today will be the ones dictating the future of the industry tomorrow.

(Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the publication)

(The above given article has been written by Tarun Joshi, Founder and CEO, IGP)