Online Shoppers Spend Significantly More Than In-Store Buyers
NEW DELHI: Indian households utilizing e-commerce apps are experiencing a notable increase in their monthly spending. According to a report by SBI Research, these households spend 7.5% more than those who do not engage in online shopping. The disparity is even more pronounced in specific categories, with spending on services and durable goods rising by 23.4% and 24.5%, respectively.
Digital shopping adoption varies significantly across income levels. The report indicates that less than half of Indian households have embraced online purchasing and payment methods. Specifically, 45.6% of households reported using these platforms for at least one consumption item, while 54.4% have not engaged in online shopping.
Digital shopping still has a long way to go
The income divide in digital shopping is stark. Among households in the lowest 20% consumption quintile, only 25.3% have utilized online platforms. In contrast, 69.5% of households in the top 20% have made the switch, revealing a gap of 44.3 percentage points. These findings are based on a fixed-effects log-linear model that considers household characteristics and state-district factors.
Groceries make the online basket
Consumables and services dominate online purchases, accounting for 39.68% of the total, while durable goods make up 23.3%. Food items represent a smaller portion, with groceries leading at 4.29%. However, the adoption of online shopping for fresh produce remains low, with vegetables at 1.32% and fresh fruits at 1%. SBI Research attributes the limited online adoption of perishable food items to a strong preference for traditional retail channels among consumers.
Clothing takes the lead among online durable purchases
Among durable goods, clothing has the highest online adoption rate at 19.97%, followed by footwear at 12.05%. Online purchases of furniture, medical equipment, and recreational goods are less common. In the consumables and services category, services account for the largest share of online purchases at 37.93%, with fuel and light following at 15.96%. The report indicates that digital adoption correlates with higher consumption intensity and diversified household spending, but significant disparities remain across income groups.
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