E-retailers are widening the scope of their loyalty programmes to capture everyday spending on food, groceries, and daily essentials, giving reward points a life beyond air miles and luxury splurges.
The shift, according to industry executives, reflects a structural behavioural change rather than just a seasonal gimmick.
Amit Koshal, founder and chief executive of rewards platform TWID, noted that his platform saw food and groceries deliver the highest average savings for users in 2025, at about 8% of order value, exceeding savings from bill payments, e-commerce, and even travel. TWID works with merchants across categories, including food-delivery platform Swiggy, e-commerce platform JioMart, fashion e-retailer Myntra, and travel portal MakeMyTrip.
“More than 5 billion reward points were redeemed across our network this year, unlocking over ₹100 crore in value, signalling a move from occasional, high-ticket redemptions to routine, everyday usage,” Koshal told Mint.
The rise in redemption frequency, even as per-transaction ticket sizes have moderated, suggests reward points are increasingly being used for regular expenses rather than saved for indulgences. In that sense, rewards are beginning to function as “embedded liquidity” at checkout, meaning a soft budgeting layer that helps households smooth spending without altering consumption patterns, according to Koshal.
For fintech Razorpay Inc.-backed payments platform POP, which rewards users with POPcoins for routing UPI (Unified Payments Interface) transactions through it, beauty, personal care, and food are the top spend categories, with repeat rates rising sharply as affordability improves.
“India is a value-centric market. Loyalty points are especially powerful for repeat customers—once someone has committed to a brand, rewards reinforce that relationship and give them another reason to keep coming back,” said Bhargav Errangi, founder and chief executive officer (CEO) of POP.
POP's partners include health food brand Yogabar and cosmetics brands Revlon and Foxtale.
The Indian loyalty programme market, as of 2025, is moderately concentrated, with the top players accounting for 50-60% of the market. Brands such as Payback India, Amazon Prime, and Tata Neu dominate the segment, while startup-driven digital loyalty platforms and retailer-specific programmes add competitive diversity, according to estimates by market research firm Future Market Insights.
Positive reinforcement
For years, credit cards have anchored the country's rewards economy, conditioning consumers to accumulate points through spending and redeem them largely within bank-led ecosystems. But shoppers now want rewards to translate into direct, tangible benefits at their favourite shopping and delivery platforms.
“I tend to stick to a couple of apps for most of my shopping,” said Aditya, a 28-year-old product manager in Bengaluru. “If the points I earn there can be used easily on my regular purchases, it’s practical. It just makes the overall experience a bit more worthwhile.”
Riya, a 30-year-old marketing professional in Mumbai, agreed. “If I’m ordering groceries every day, I’d like to see my points reduce that bill instantly rather than wait a whole year to buy a flight ticket."
Taking a cue, platforms are even bringing global names to improve their appeal.
In January, Swiggy and e-commerce platform Flipkart partnered with Abu Dhabi-based airline Etihad Airways to enable members to earn and redeem air miles on food delivery and shopping in India.
In August, hospitality chain Marriott Bonvoy linked its travel rewards with Flipkart’s ecosystem, allowing point conversions and redemptions across travel and retail.
The country’s top marketplaces are simultaneously widening the scope of their in-house loyalty engines.
Flipkart has layered multiple tiers into Flipkart Plus, linking rewards more closely to frequency and category spend. Eternal, parent of food-delivery platform Zomato, continues to bundle dining and food-ordering benefits through its Gold programme. In fact, a reduction in order value for Gold customers led to higher net order value growth in the December quarter, on account of higher ordering frequency from the more budget-conscious customers, Eternal said in its Q3 shareholders’ letter.
Beauty retailer Nykaa is piloting ‘Glam Pass’ to build loyalty for its partner brands, Mint reported on 6 January.
These programmes aim to make rewards interoperable across categories rather than confined to single use-cases, said Satish Meena, analyst at market research firm Datum Intelligence. “The shift comes as platforms sharpen their focus on loyalty initiatives, betting that broader use cases will enable repeat usage and lift lifetime value.”
Loyalty isn't cheap
However, behind the push lies a growing tension. As more platforms pile on tiers, partnerships and cross-category redemptions, the cost of funding rewards is rising, even as margins in groceries and essentials remain thin, according to Datum Intelligence’s Meena.
“Right now, many platforms are paying to keep customers active. If those rewards don’t lead to real loyalty over time, they simply become an added cost rather than a growth driver.”
Moreover, the next phase of loyalty will hinge on making rewards feel more liquid and immediately useful, Meena noted. This includes easier conversions, wider merchant acceptance, and layered benefits, such as priority service and exclusive access, designed to deepen engagement beyond simple cashbacks.