MUMBAI: The growth of digital payments across India continues to gain momentum, fueled by technological advancements and changing consumer behaviors. According to the Reserve Bank of India's (RBI) Digital Payments Index (RBI-DPI), the annual growth rate reached 11.11 percent as of September 2024, marking the Index at 465.33, up from 445.5 recorded earlier this year. This notable increase reflects the expansion of payment infrastructure and performance across the nation, underscoring the shift toward cashless transactions.
The RBI-DPI was established by the Reserve Bank to measure the country's online transaction adoption and to track the depth of digital payment penetration over time. It encompasses five broad parameters: payment enablers, payment infrastructure, payment performance, and user-centricity, each weighted differently. The growing adoption of these digital methods indicates not just convenience but also the shifting cultural norms surrounding shopping and payment practices.
Meanwhile, as digital payments soar, India's online shopping revolution is also thriving. A recent Ipsos Shopper Insights study aptly titled 'Clicking Into The Future – Trends Driving India’s Online Shopping Surge' reveals significant shifts within the Indian retail market. While the total retail market stands at $1.3 trillion, e-commerce and q-commerce collectively represent $100 billion, showcasing the rapid growth of these segments.
Interestingly, the demographic mix of online shoppers reflects changing patterns. Previously dominated by men, the online shopping arena is becoming more balanced; the Ipsos report shows about 53 percent of online shoppers are male, compared to 47 percent who are female. This trend includes not just younger generations, where millennials and Gen Z are leading online purchases, but also Gen X, who are now increasingly engaged, with 19 percent participating actively.
Rural areas are joining the digital shopping wave as well, breaking through traditional barriers. Reports indicate 45 percent of internet users reside outside major urban locations, with shoppers from smaller towns and rural regions becoming significant contributors to online sales. Notably, two out of ten shoppers from these areas are actively engaging with e-commerce platforms, selecting fashion as their preferred item category, contrasting with the preference of urban consumers leaning more toward groceries.
The rapid expansion of 4G networks has made shopping more accessible than ever. With brands like Jio facilitating widespread 4G availability, consumers are no longer hindered by slow connectivity. This seamless access is leading to significant reliance on speed and convenience; the Ipsos study found 68 percent of users prioritize these factors over discounts, indicating a shift to valuing time-saving advantages when shopping online.
Consumers are increasingly impatient with the shopping process, with 31 percent perceiving online shopping as quicker than the traditional store experience. Among Gen X users, this number jumps to 41 percent, showcasing their preferences as they prioritize ease of access without having to leave home. The 24/7 nature of e-commerce ensures shoppers can browse and buy anytime, with 31 percent valuing this flexibility greatly.
Impulse purchases have become standard, with 66 percent of q-commerce users buying items frequently. Add to this the changing stock-up habits as consumers shift away from bulk purchases toward smaller, more immediate buys—driven by the availability of instant fulfillment services. With the ascent of online marketplaces, completely transforming consumer behavior, shoppers also rely heavily on online reviews and influencer endorsements, relying on them as pivotal trust signals before making purchases.
The Ipsos report highlights another significant trend: brand loyalty is waning. With consumers faced with countless choices, about 60 percent of apparel shoppers report they might switch brands when their preferred option isn't available, reflecting the need for consistency and availability from brands aiming to remain relevant.
“The online shopping environment is changing rapidly, and marketers must adapt to stay relevant,” commented Shruti Patodia, research director at Ipsos Shopper Insights. “The drive for speed, convenience, and alternatives is reshaping consumer expectations and brand interactions.”
Digital payments are central to facilitating this shopping shift, with 48 percent of consumers confessing they’re often unaware of their spending habits when shopping online, rendering budgeting tools even more necessary. The growing reliance on digital payment methods not only enhances the ease of transactions but also significantly affects consumer psychology, leading to impulse buying and brand switching. This interplay indicates how fundamental digital payment systems are to the evolution of shopping experiences and consumer relations across India.