Digital adoption linked to 7.5 pc higher household consumption expenditure: Report
New Delhi, October 31
Growing digital adoption could support higher household consumption and accelerate the diversification of spending towards services and durable goods, although India's shift towards online purchasing remains uneven across income groups and product categories, according to a research report by SBI Research.
Households adopting online purchase and payment platforms recorded 7.5 per cent higher Monthly Per Capita Consumption Expenditure (MPCE) compared with non-adopting households, while their expenditure on services and durable goods was 23.4 per cent and 24.5 per cent higher, respectively, the report said.
The findings are based on a fixed-effects log-linear model that controls for household characteristics and state-district factors.
The report found that 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 did not report such usage.
Digital adoption also showed a significant income-based divide. The proportion of households using online purchase and payment 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, reflecting a gap of 44.3 percentage points.
Across consumption categories, digital purchases were concentrated in consumables and services, accounting for 39.68 per cent, followed by durable goods at 23.3 per cent. Food items accounted for only 7.10 per cent of digital purchases.
Within food categories, grocery purchases recorded the highest digital adoption at 4.29 per cent. 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 continued reliance on traditional retail channels, indicating that households still prefer visiting markets for daily food purchases.
Among durable goods, clothing recorded online adoption of 19.97 per cent, followed by footwear at 12.05 per cent. However, purchases of furniture, medical equipment and recreational goods through digital platforms remained limited.
The report also found that services accounted for the largest share of online purchases within consumables and services at 37.93 per cent, followed by fuel and light at 15.96 per cent.
SBI Research said digital adoption is associated with higher consumption intensity and more diversified household spending patterns, although the substantial income-based gap indicates that digital participation remains uneven across India.
— ANI
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