PUNO Founder, Pankkaj Aggarwal, on Why Entertainment Demand Is Rising in Tier 2 and Tier 3 India

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oi-Sathish Raman

Published: Wednesday, April 15, 2026, 7:20 [IST]

For a long time, experiential entertainment in India was largely seen as a metro story. The biggest formats, the newest concepts, and most of the competition were concentrated in large cities. That equation, however, has been changing over the last few years, with smaller cities beginning to show a very different kind of demand.

For Pankkaj Aggarwal, founder of PUNO, this shift has been visible on the ground for some time now. He believes it has less to do with trends and more to do with how people want to spend time today, especially in cities where options have traditionally been limited.

An entrepreneur who often describes himself as an “entertainpreneur”, Pankkaj Aggarwal has spent years building experiential entertainment destinations across India as an entertainer as well as entrepreneur. His approach goes beyond building businesses. It is rooted in creating spaces where people come together, because entertainment today is no longer just leisure, it is social infrastructure.

In a country as diverse and fast evolving as India, these spaces play a deeper role. They bring communities closer, create shared moments, and offer environments where people can connect, celebrate, and belong. What may appear as a simple outing often becomes a meaningful part of how people experience time together.

“Entertainment is not a distraction from life. It is a way people bond and feel connected,” he says.

That thinking has shaped how he looks at the category today. In tier 1 cities, however, building such experiences has become increasingly complex. High rentals across malls and high streets, combined with intense competition, have made the
market crowded and demanding. Consumers are well exposed and harder to impress, which means operators have to constantly upgrade formats, introduce new elements, and differentiate in order to stay relevant. “You are expected to keep evolving all the time, and that comes with its own cost pressures,” Pankkaj Aggarwal says.

Beyond metros, the dynamics begin to change.

In tier 2 cities, the opportunity is shaped as much by aspiration as it is by access. Many of these markets still have limited presence of high-quality experiential entertainment centres, even as consumer expectations have moved closer to metro standards. According to Pankkaj, people are actively looking for experiences they would otherwise associate with larger cities, but within their own environment. As expectations rise, so does the need for spaces that reflect a more evolved, experience-driven lifestyle.

In many of these cities, access has not fully caught up with aspiration. People are looking for environments where they can engage, celebrate, and connect more and more nowadays. This is less about entertainment in the traditional sense and more about enabling a richer social life, one that aligns with how people want to live today.

What stands out strongly is how time is being valued. In these markets, outings are rarely individual or incidental. They are shared, intentional, and often centred around groups. Families come together, friends gather, and even social circles such as schools or groups participate collectively. When a space delivers meaningfully on this need, it becomes more than a place to
visit. It becomes part of people’s routines and their celebrations.

From an operator’s lens, this changes the business equation. Lower rentals ease some pressure, but more importantly, the absence of clutter allows a brand to stand out faster. “You are not competing with too many similar formats in the same catchment,” Pankkaj explains. That early recall, combined with consistent footfall, makes these markets more stable than they may appear at first glance.

Tier 3 cities, on the other hand, are still at an early stage of evolution. These markets remain underpenetrated, with limited exposure to structured entertainment formats. For Pankkaj, this presents a long-term opportunity rather than an immediate scale play.

“There is interest, there is curiosity, but there is also a need to explain the format,” he says. Awareness and pricing sensitivity both play a role, which means expansion into these regions requires patience and a deeper understanding of local behaviour. At the same time, he sees strong community-driven demand, where once acceptance is built, loyalty tends to follow.

Much of this perspective comes from Pankkaj’s own journey of building and operating entertainment-led businesses. Over the years, he has focused on combining experience-led thinking with disciplined execution, while continuously learning from consumer behaviour on the ground. He believes that the fundamentals of this industry are shaped less by theory and more
by observation, changes, implementation and active feedback. “You learn by watching how people interact with your space, what excites them, and what brings them back,” he says.

Instead of keeping his learnings limited to his own ventures, Pankkaj Aggarwal also spends time interacting with others entering the space. Many of them, he says, are figuring things out without a clear roadmap. Conversations often revolve around practical challenges, from understanding what customers actually respond to, to building a model that works on the ground. It is something he has come to value over time, not just building for the business, but contributing to
how the category and at large the industry itself evolves.

The broader industry is already reflecting this shift. and experiential entertainment in India is growing quickly, driven by urbanisation, lifestyle changes, and the increasing importance of shared experiences. But the growth is no longer centred only around metros.

For Pankkaj Aggarwal, the next phase will depend on how well brands understand and serve emerging markets. “The real opportunity is not just in metros anymore. It is in building for these cities with the same intent and quality,” he says.
As consumption patterns continue to evolve, experiential entertainment is finding a different role in people’s lives. It is becoming less about filling time and more about spending it meaningfully.

And much of that shift is now unfolding outside the country’s largest cities.