Wealth, in India, is spreading from the big cities into the smaller ones. And with it comes an expansion of demand for Western goods, stoked by advertisements. Now desis in smaller cities want KFC, blue jeans, Fords (huh?) and (of course) premium alcohol. I wonder how many of star’s advertisers are making big bank in India? Maybe we should spread a list of their names to the Indian press — that would get their attention fast! Nobody wants to stumble in an emerging market. [Anybody have that list yet?] Read the whole article on the NYT (no permalink avail, unfortunately), snippets provided below:

KFC’s parent, Yum Brands, now has 100 KFC and Pizza Hut restaurants in India, 30 opened in 2004, and a goal of 1,000 by 2014. To realize such growth, the chains have begun a seemingly inexorable march into the country’s smaller boomtowns, cities like Coimbatore and Cochin in the south, and Jaipur and Meerut in the north, where middle-class Indians – who increasingly crave localized Western foods, regional flavors and ingredients infused into the pizza, pasta or poultry – have hailed their arrival. As India’s galloping economy has extended to its smaller cities, a younger population with expendable income is finding many Western and upmarket domestic products, brands and services increasingly accessible. Nearly 35 Indian cities have a population exceeding a million, and proliferating shopping malls cater to the rapidly growing consumer class.

Ford’s Indian unit said most of its sales growth was coming from outside the primary cities. “When we came in 1996, we set up with 12 dealer facilities in 8 cities; today, we have 90 facilities in 70 cities,” said Vinay Piparsania, vice president for sales and marketing at Ford India. “People are finding cars more affordable, with banks chasing customers in smaller cities to offer loans.” India’s demographics support the expansion. According to a report by the National Council for Applied Economic Research, which is based in New Delhi and partly government financed, half of India’s 10.7 million households with an income of up to a million rupees ($23,000) are in smaller cities. The report recorded a big rise in the number of rich households, those with incomes of 1 million rupees to 5 million rupees, in smaller cities like Vadodara, Nagpur, Ahmedabad and Vijayawada. And while in 1995 just 2.8 percent of households were counted as middle class, with income of 200,000 rupees to a million rupees, the report projected that 12.8 percent would be counted as such by 2009. With a manufacturing boom as well as an expansion of back-office outsourcing into the second-tier cities, “wealth and purchasing power are no longer a big-city syndrome,” said the research group’s senior fellow and economist, Rajesh Kumar Shukla. “The urban market is more or less saturated for a lot of products, but in smaller cities consumers are hungry.” Contrary to expectations, even premium brands are doing well in second-tier cities. For Bacardi Martini India, the top six Indian cities now account for only 45 percent of sales, compared with 70 percent in 2001.