SBI Research Report Highlights Higher Household Spending Among Digital Shoppers in India

Indian households that utilize online purchase and payment platforms record a 7.5 per cent higher Monthly Per Capita Consumption Expenditure (MPCE) compared to non-adopting households, according to a recent research report by SBI Research.

The study also found that expenditure on services and durable goods among digital adopters was significantly higher at 23.4 per cent and 24.5 per cent, respectively. These findings are based on a fixed-effects log-linear model that controls for household characteristics as well as state-district factors.

Overall, 45.6 per cent of Indian households reported using online purchase or payment facilities for at least one consumption item, while 54.4 per cent reported no such usage.

The report highlights a significant income-based divide in digital adoption. The proportion of households using online platforms increased from 25.3 per cent in the bottom 20 per cent consumption quintile to 69.5 per cent in the top 20 per cent, representing a gap of 44.3 percentage points.

Across various consumption categories, digital purchases were largely concentrated in consumables and services at 39.68 per cent, followed by durable goods at 23.3 per cent. Food items accounted for a much smaller share at 7.10 per cent.

Within the food category, grocery purchases recorded the highest digital adoption at 4.29 per cent. In contrast, online purchases remained limited for vegetables at 1.32 per cent, fresh fruits at 1 per cent, dry fruits at 0.62 per cent, and egg, fish, and meat at 0.59 per cent. The report attributed the limited online adoption of perishable food items to a continued reliance on traditional retail channels, with households preferring physical markets for daily food purchases.

Among durable goods, clothing recorded an online adoption rate of 19.97 per cent, followed by footwear at 12.05 per cent. However, digital purchases of furniture, medical equipment, and recreational goods remained limited.

In the consumables and services segment, services accounted for the largest share of online purchases at 37.93 per cent, followed by fuel and light at 15.96 per cent.

SBI Research concluded that while digital adoption is associated with higher consumption intensity and more diversified spending patterns, the substantial income gap indicates that digital participation across India remains uneven.

"The findings from SBI Research provide a clear view of how digital adoption correlates with consumer spending patterns in India. While the data shows higher consumption among digital platform users, the noticeable gap across income quintiles and product categories indicates that significant structural hurdles remain. For businesses and digital commerce startups, this highlights both an opportunity to cater to high-spending segments and a challenge in penetrating perishable goods and lower-income brackets where traditional retail habits still dominate." — Dr. Shishir Gupta, Founder & CEO, StartupLanes