India's digital shoppers spend 7.5% more, but vegetable markets remain largely offline

India's digital shopping habits are expanding, but when it comes to buying everyday vegetables, fruits and meat, most households still prefer the neighbourhood market over an online platform. The contrast is striking because households that use digital platforms for purchases and payments report 7.5% higher monthly per capita consumption expenditure (MPCE) than those that do not, yet online purchases of vegetables account for just 1.32% of consumption.

An analysis by SBI Research, based on the National Statistical Office's Household Consumption Expenditure Survey (HCES) 2023-24, covering 2,61,953 households, highlights this duality in India's consumption story. While digital adoption is increasingly associated with higher spending and a wider consumption basket, traditional retail continues to hold its ground, particularly in fresh food.

The report finds that 45.6% of Indian households reported using online purchase or payment platforms for at least one consumption item, while 54.4% did not. Among digitally adopting households, monthly per capita consumption expenditure was 7.5% higher. The difference was more pronounced across non-food categories, with expenditure on durable goods 24.5% higher and consumables and services 23.4% higher. Food expenditure was also 21.4% higher among households adopting digital platforms.

However, the shift towards online consumption is far from uniform. Even as e-commerce and quick-commerce companies expand their reach, digital purchases of everyday food items remain limited. According to the report, online purchases account for just 1.32% of vegetable purchases, 1% of fresh fruit purchases and 0.59% of egg, fish and meat purchases. Dry fruits are marginally higher at 0.62%.

The digital divide in India's consumption basket

The preference for online channels is considerably stronger in categories where consumers have greater flexibility in choosing products. Online adoption for clothing stands at 19.97% and footwear at 12.05%. Within food, grocery purchases record the highest digital adoption at 4.29%, followed by served processed food at 2.62% and packaged processed food at 1.65%.

SBI Research attributes the limited online purchases of perishables to the continued reliance on traditional retail channels, noting that consumers still prefer visiting markets for such food products. This suggests that convenience and digital access have not yet fundamentally changed how households source their daily fresh food requirements.

The gap in digital adoption is also closely linked to household spending power. The share of households using online purchase or payment platforms rises consistently with consumption levels, from 25.3% among the bottom 20% of households to 69.5% among the top 20%. This represents a 44.3 percentage point difference between the two groups.

The report also points to limited online adoption in high-value durable categories such as furniture, where it stands at just 0.18%, medical equipment at 0.32% and recreational goods at 0.52%.

Overall, digital platforms are being associated with higher spending across categories, but shopping habits remain deeply rooted in traditional channels for everyday essentials.