Technology companies looking at Tier-II and Tier-III markets with full focus

Be it televisions, laptops, cameras, washing machines or air conditioners, technology companies are launching entry-level products aimed at consumers in these markets. These companies are researching on the consumers needs of these specific markets.

As part of Panasonic's strategy to increase its reach in Tier II and III markets, the electronics maker has recently launched an air conditioner and television range with superior speaker quality.

Since rural people love to turn up the volume, Panasonic has designed the products accordingly. Industry experts say Tier II and III cities have been quick in adopting the technological advancements, making them the centre of focus for all the technology bigwigs.

Google has developed applications such as search in local languages, speech recognition in Indian accent, Google Translate and Google Transliteration to meet the local requirements. Google also has flagged off an "internet bus" to educate and lure more people in Tier II and III cities and rural areas into the Web culture.

Tier II and III geographies are getting extremely crucial. Mid-market customers have been underserved traditionally, and yet they represent the fastest growing segment and Dell's greatest opportunity for growth and profitability today

Yahoo supports new Indian Languages - BPO's drive to Tier II cities Trichy Coimbatore Madurai

Growth of white-collar jobs in tier-II cities is also driving Web sites to offer content in different Indian languages.

Yahoo is finding the push to tier-II cities so lucrative that it plans to soon start a support facility for many new languages. “We recently launched a Tamil portal. In 2011, we plan to start offering content in five more Indian languages,” Mr Shouvick Mukherjee, Vice-President and Chief Executive officer, Yahoo India R&D.

Banks have to look at Tier II and Tier III cities also - Coimbatore, Ludhiana, Madurai, Lucknow, Kozhikode, Bhopal and Nashik

These many days Banks and other majors have only looked at the metros and other main cities in India for their customer care and all other centers. But, now they will have to look at the tier II and tier III cities as well.

Banks (especially private ones) would have to pay more attention to the high demand for money in tier II and tier III cities in India.

Crisil says that despite the difference in volumes, higher profit margins can make smaller towns as attractive as metro cities.

The report covered 15 tier II cities that included Coimbatore, Ludhiana, Madurai, Lucknow, Bhopal, Nagpur, Nasik, Rajkot among others. These make up for 15 percent of the total retail loan demand in India.

In some of these cities growth prospects are so strong that the car loan demand might grow at 20 percent for the next couple of years against an expected Indian average of 13 percent.

Gold loans are expected to grow at 50 percent rate, mainly driven by smaller towns.

Even HDFC Bank, which disbursed Rs 15,000 crore worth new retail loans in the first quarter this year, saw 50 percent of loans coming from tier II and III locations.

Yes bank, which intends to take its retail portfolio to 10 percent by the year end from the current 1 percent, will also open most branches in tier I and Tier II cities.

Tier-II cities in india has lot of potential for investment

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Getting over the big cities for investors in real estate players is not easy but if a recent report released by CRISIL research, country’s largest independent rating agency, is to be believed, the sheer size of realty market of these ten tier-2 cities, Bhopal, Bhubaneswar, Coimbatore, Indore, Jaipur, Lucknow, Nagpur, Surat, Vadodara and Visakhapatnam is at whopping Rs 18,000 crore.

The real estate sector and financial institutions alike are now eyeing tier-2 cities for diversification since these offer huge growth potential and robust economic growth. Biggies like DLF, Unitech, Indiabulls Real Estate (IBREL), Parsvnath, Puravankara, Tata Realty, Reliance Urban Infra, Emaar MGF, Sobha Developers to name a few who are flocking these cities and launching projects with an average price band of Rs 2000-2700 per sft.

In contrast, these tier-2 cities are less susceptible to market shocks and interest rate hikes as only 30% population in these smaller cities are availing loans to buy real estate vis-à-vis almost 70% in tier-1 cities.

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HTC Global Services opens office in Chennai for BPO - has land in Madurai and Trichy

IT and BPO company, HTC Global Services inaugurated its 1.5 lakh sq ft facility at Guindy in Chennai on Tuesday. While the centre can house about 1,500 employees, HTC plans to hire over 3,000 professionals over the next one year, senior company official said.

Madhava Reddy, founder-president and CEO of HTC, said: “We invested over Rs 300 crore in the last one year to expand our current facilities in MEPZ (Madras Export Processing Zone) and to acquire new facilities in Chennai and Hyderabad. The centre in Guindy is our first own campus and we plan to move certain insurance operations there in phases.”

Michigan-headquartered HTC offers IT and back office solutions to clients across verticals.

According to Chary Mudumby, VP of HTC, the company is also considering expansion in a few tier II cities in Tamil Nadu and Andhra Pradesh. HTC has land in cities including Thiruchirapalli (Trichy) and Madurai and it is mulling about starting BPO operations in the second tier cities, he added.

Difference between tier-I, tier-II and tier-III

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Metros are basically regarded as Tier I cities, relatively smaller cities are regarded as Tier II cities whereas smaller cities are considered as Tier III ones. Here is the explanation why they are considered so:-

As Indian economy experiences the boom in all sectors triggered by its economic and investment policies, the metros or the Tier I cities are the ones that are inundated with burgeoning investments in the industrial and the services sector. Along with large-scale investments has boomed the realty sector creating congestion, arising out of an increasing demand for residential and commercial properties. This congestion in realty structures has forced the respective governments and many investment companies to seek out for alternative smaller cities leading to a demand for Tier II and III cities.

One of the basic reasons for investments flocking in to the smaller cities is available properties and affordable prices. Moreover, the special initiatives taken by the respective governments in providing the smaller cities with infrastructural facilities and creation of SEZs, has played a vital role in promoting these small towns into cities of the future. Keeping in view all the congenial factors necessary for setting up corporate infrastructure, the investing companies ranging from pharmaceuticals to financial institutions, automobiles to the IT & ITES sectors; to the retail and real estate sector are opting for the smaller cities transforming them into India's fastest growing cities in a matter of few years.

The large scale investments by the corporate sector in the smaller cities apart from initializing economic prosperity and job opportunities has also created demand for realty spaces. While developers from all the nearby areas flock in to cater to the real estate demands, the property markets in these smaller cities are witnessing along with a changing skyline, an unprecedented hike in real estate prices. While the realty trend in Tier I cities have reached a saturation point, with the yield gap witnessing significant margin of 9.5 to 10 per cent, the Tier II cities record a yield of 10.5 to 11.5 per cent. However, the emerging winners in the present real estate scenario of India are the Tier III cities, which offer greater yields of up to 12 percent. This rising prices and promising future of these cities are driving investors to buy properties predicting long-term gain in years to come.

Recent trend also shows that due to lack of availability of business equipped infrastructure and exorbitant property prices in the existing metros, the IT, ITES and the BPO companies are vying for the smaller cities where they are promised better infrastructure, state-of-the-art office spaces and also skilled manpower. A careful study of these Tier III cities reveals the close proximity of these cities, to the most happening cities of India like Delhi, Mumbai, Bangalore to name a few. Thereby, it will be no mistake if they are called the extension cities of the booming metros. Of late, the tier II cities like Pune, Kolkata and Hyderabad have made business opportunities and infrastructural development like never before. Now it is the turn of the Tier III cities or the smaller cities like Jaipur, Ghaziabad, Kochi, etc. to make it big into the realty business as the government and the corporate sector target them as 'India's Next Destination Cities'.

sourcing from p a v a n @ w i k i a n s w e r s

Challenges in Tier-II cities like Madurai Salem Coimbatore and Trichy

Here are few challenges in Tier-II cities like Madurai, Coimbatore, Trichy and Salem:

Lack of

quality commercial space,
infrastructure development,
quality hotels,
public transport in peripheral areas,
availability of recreational and
educational facilities and
rise in labour and real estate costs.

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CII Madurai Zone welcomes and suggest TN Government for Tier-II cities

CII Confederation of Indian Industry Madurai Zone Chairman R. Dinesh says -

Further development of Madurai-Tuticorin corridor,focus on Madurai tuticorin airports,and linking madurai tuticorin and Madurai Tirunelveli corridors would support the industry.

Dinesh requested the government to frame a new IT policy in such a way that it helped IT companies look at investments in Tier II and Tier III cities.

CII Madurai welcomes government initiatives to develop southern Tamil Nadu.

Vijay Shanthi Builders, Salem

Vijay Shanthi Builders would construct an integrated township having premium villas with luxurious amenities in the foot hills of Yercaud and Salem.

They also said they will also announce new projects to cater to mid and premium segments in tier-II cities.

Hopefully they will soon come to Madurai, since it is one of the tier-II cities.

Madurai ideal for BPO business/company: Madurai advantage as a tier-II city

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According to a recent study conducted by consultancy firm Everest Group, the increased real estate prices and a talent crunch in metros are forcing the $11 billion Indian BPO industry to move to tier II cities in the country.

"It is difficult to maintain the growth in tier I cities because of the rising real estate prices and talent crunch. There is no option but to move to tier II cities," Everest Group's Country Head (India) Gaurav Gupta said.

Currently, BPO industry is concentrated in seven cities namely Bangalore, NCR, Mumbai, Pune, Chennai, Hyderabad and Kolkata.

"Movement to lower-cost cities within India is likely to result in additional 15 to 30 percent reduction in operating cost despite lower employability and higher management costs," head of Global Services at Everest Research Institute Nikhil Rajpal said.

Everest Group is a global consulting firm specializing in sourcing and offshoring advisory services. The study ranks several tier II and tier III cities on their potential to become the next BPO hubs for various domains in the future.

For finance and accounting services, Ahmedabad, Nagpur, Jaipur, Indore and Nashik/Nasik emerge as ideal cities to host BPO firms.

Similarly, Nagpur, Vishakhapatnam, Ahmedabad, Mundra, Coimbatore and Madurai are ideal locations to have BPO operations in logistics domain.

Sourcing from SI

Chennai, Coimbatore, Dindigul and Madurai: Tier-1, Tier-2, Tier-3 and Tier-4 Cities of tamil nadu

Please refer to the map above for the districts/cities we refer to.

Government has divided the districts into four different categories, based on the level of existing development, infrastructure and the level of infrastructure and development needed in the years to come.

As years go by, if the cities progress, the city moves to upper tiers.
The four tiers are Tier-1, Tier-2, Tier-3 and Tier-4 cities.

For example, Tier-1 constitutes Chennai. Tier-2 constitutes Coimbatore, Madurai, Trichy etc., Tier-4 constitutes Dindigul.

Coimbatore is a strategic development centre for Cognizant like software companies, similar to the ones we have in Chennai, Kolkata, Pune, Bangalore, Hyderabad and Mumbai. Cognizant is committed to grow the centre, leveraging the rich talent pool of technical professionals in the region.

Coimbatore will soon emerge as a Tier-1 city for IT in one year, based on the growth we are seeing.

It is not only Coimbatore that is on the Tier-2 city map of Tamil Nadu, but also Trichy, Madurai, Salem, Hosur and Tirunelveli.

Other than Coimbatore, Tamil Nadu is trying to develop Tier-2 cities spreading across the entire state; from Chennai at the northern end to Tirunelveli at the southern tip. Sekar Ponniah of Global Software Solutions (TVL) Pvt Ltd started a 100 % Export Oriented Unit located at Tirunelveli in the year 2000.

While we look at the map above, Dindigul, which is a Tier-4 cities, is strategically located between Coimbatore, Karur and Madurai.

Coimbatore, which is currently a Tier-2 might move up to Tier-1 city soon. Madurai, which is Tier-2 city is also improving. Karur is a very well industrialized export unit. Now, Dindigul present in between Madurai, Karur and Coimbatore has lot of advantages in future.

Note down, in your diary - Dindigul will become big someday, considering its georgraphic location.

Madurai's Potential Lost in past

What do you know about Madurai-TamilNadu?

You may know - Madurai is known as :
ATHENS OF THE EAST
TEMPLE CITY OF INDIA
LAND OF NECTARS etc...

You may Know - Madurai is famous for its :

Meenakshi Temple
Tradition and Culture
Fragrant-smell JASMINE Flowers
Granite Marble stones
Tasty Food etc.,

While asking experienced people - they'll reply :

Madurai lacks Industrialization so lost millions of its native people to other cities.

That is real truth ! Did you know one thing ?

Our Temple city Madurai is losing nearly 40,000 Graduates every year to other cities like Chennai, Hyderabad, Bangalore, Mumbai and losing 50% of its Man-power to the industrialised cities like Coimbatore, Tirupur and Erode due to Unemployment.

Just Imagine the status of our city if those people remained here for work! None of the previous Governments took efforts to develop the Historic temple city. We had lost a Second MetroPolitan city of TamilNadu - YES !!! - Our Madurai might have become a Metropolitan city some decades ago next to those 4 Cities like what PUNE,BANGALORE,HYDERABAD is now emerging!! If there was a proper Governance and Good Local Administration.

But Taking its Potential into account - Our Present State and Central Governments had come forward atlast to develop our City Madurai right now.

Do anyone of you know its results ?

MADURAI is the only Tier-II City which attracted the Investments for More than Rs.50,000 Crores in the last two years which is now equal to the same power of Metros and Mini Metro cities of India.

Since this article is about improvement of Madurai, sourcing it from another madurai well wisher - madurai gilli - all for wellness of Madurai!