India Loyalty Programs Market Intelligence and Future Growth Dynamics - 50+ KPIs on Loyalty Programs Trends by End-Use Sectors, Operational KPIs, Retail Product Dynamics, and Consumer Demographics - Q1 2025 Update

The loyalty market in India is expected to grow by 18.3% on annual basis to reach US$3.58 billion in 2025.

In value terms, the loyalty market in the country has recorded a CAGR of 20.0% during 2020-2024. The loyalty market in the country will continue to grow over the forecast period and is expected to record a CAGR of 15.6% during 2025-2029. Loyalty market in this region is expected to increase from US$3.02 billion in 2024 to reach US$6.40 billion by 2029.

This report provides a detailed data-centric analysis of the loyalty market opportunities and risks across a range of end-use sectors and market segments in India. With over 50 KPIs at the country level, this report provides a comprehensive understanding of loyalty market dynamics, market size and forecast, and market share statistics.

The publisher’s research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view on emerging business and investment market opportunities.

Key Insights

In India, there is a growing preference for digital-first, mobile-based loyalty programs, which are gaining popularity across various sectors. Companies are moving away from traditional loyalty cards and offering rewards via mobile apps, websites, or integrated e-commerce platforms. For example, Flipkart’s "Flipkart Plus" and Amazon’s "Prime" programs are designed to reward customers digitally, offering free shipping, exclusive sales, and cashback points. Similarly, digital payment apps like Paytm and PhonePe incorporate loyalty systems, where customers accumulate points through various transactions, which can be redeemed for rewards like cashback or vouchers.

• This transition is primarily driven by India’s growing mobile internet penetration and the rise of mobile-first consumers. The country is expected to have over 900 million smartphone users by 2025, and mobile internet usage has surged. This shift in consumer behavior toward mobile apps, especially post-pandemic, has encouraged businesses to offer loyalty programs through these platforms. Additionally, the convenience of tracking rewards, redeeming benefits, and engaging with offers directly through smartphones has made digital loyalty programs more appealing.
• This trend will likely intensify in the next 2-4 years as mobile penetration and smartphone usage continue to increase. We can expect loyalty programs to become even more personalized, with AI and data analytics enhancing the ability to offer tailored rewards based on individual behavior. This shift will increase customer engagement and retention as businesses leverage digital platforms to interact more seamlessly with consumers. As mobile wallets and payment apps become central to daily transactions, loyalty systems will integrate even more tightly with other digital services, fostering a deeper connection with consumers.

Increased Use of Artificial Intelligence and Data Analytics for Personalization

Companies in India are increasingly utilizing artificial intelligence (AI) and data analytics to make loyalty programs more personalized and relevant. For instance, Myntra’s "Myntra Insider" program uses customer data to offer personalized discounts and promotions based on shopping history. Similarly, BigBasket tailors its loyalty rewards to consumer preferences by providing personalized offers for specific categories like groceries or household items.

• The rise of data availability and the advancement of AI technologies have enabled businesses to gain deeper insights into customer behavior and preferences. Retail, especially e-commerce platforms, is leading this push for personalized loyalty programs. With consumers increasingly expecting tailored experiences, companies use data analytics to optimize loyalty offerings and maximize consumer engagement. Furthermore, India’s expanding digital infrastructure has made these advanced technologies more accessible to businesses of various sizes.
• Over the next few years, AI and data-driven personalization will be critical in shaping the future of loyalty programs. By 2027, most large brands in India are expected to rely heavily on these technologies to offer highly targeted rewards, likely boosting customer satisfaction and retention. As more companies adopt AI, the level of personalization in loyalty programs will only grow, making it increasingly difficult for competitors to keep up if they do not invest in similar capabilities. However, businesses must also be mindful of data privacy regulations, as increasing scrutiny around data use may require adjustments to how data is collected and utilized.

Cross-Industry and Cross-Brand Loyalty Partnerships

Cross-industry and cross-brand partnerships are becoming more common in India as businesses seek to offer consumers a wider range of rewards and build stronger relationships. An example is the "SmartBuy" loyalty program from HDFC Bank, where users can earn rewards across various sectors, including travel, entertainment, and retail, by partnering with brands like Amazon, BookMyShow, and Myntra. This approach enables customers to earn points from multiple industries and redeem them in different ways, offering greater flexibility.

• The driving force behind this trend is the desire to increase the perceived value of loyalty programs by offering customers more diverse rewards. In a highly competitive market like India, brands explore collaborations to differentiate their loyalty offerings. By teaming up with companies across different sectors, they can offer customers a broader, more attractive range of benefits while sharing reward fulfillment costs. These partnerships help companies maintain customer loyalty by providing added value, even in fiercely competitive industries.
• Cross-industry partnerships will likely expand in the next few years, particularly as more brands realize the benefits of offering an integrated loyalty experience. Companies will increasingly look for ways to provide customers with rewards that span multiple categories, such as retail, travel, entertainment, and lifestyle. This trend could lead to a more interconnected loyalty ecosystem where customers can earn and redeem points seamlessly across brands and industries. However, managing these partnerships effectively will require close coordination and clear agreements on data sharing and customer privacy.

Integration of Sustainability into Loyalty Programs

Sustainability and social responsibility are becoming key components of loyalty programs in India. Companies like IKEA India and Tata CLiQ are integrating sustainability into their offerings by rewarding customers who make eco-friendly purchasing decisions. For example, IKEA's "IKEA Family" program offers loyalty points to consumers who buy products made from sustainable materials. This trend reflects the growing importance of sustainability to Indian consumers, particularly younger generations.

• As consumers become more aware of environmental issues, businesses increasingly demand sustainable practices. Research indicates that many Indian consumers, especially Millennials and Gen Z, are willing to spend more on products that align with their values, including sustainability. Companies respond to this shift by incorporating sustainability into their loyalty programs to attract and retain eco-conscious customers. Additionally, government policies promoting sustainability, such as the National Action Plan on Climate Change, encourage businesses to integrate environmental considerations into their operations.
• In the coming years, we can expect sustainability to become an even more prominent feature in loyalty programs, especially as younger consumers continue to prioritize eco-consciousness. By 2027, many loyalty programs in India will likely offer rewards for making sustainable choices, such as purchasing eco-friendly products or participating in recycling initiatives. This focus on sustainability will differentiate brands in an increasingly crowded market and may lead to stronger consumer loyalty, especially among environmentally aware segments. However, the challenge for businesses will be to balance sustainability efforts with profitability, as fulfilling sustainability goals may involve higher costs.

Competitive Landscape in the Indian Loyalty Market

India's loyalty program market is a dynamic and rapidly growing sector that reflects the country's digital transformation and evolving consumer behavior. Dominated by major players such as Payback India, Flipkart Plus, and Amazon Prime, the market thrives on innovation, personalization, and extensive partner ecosystems. While established programs leverage their brand equity and resources, startups like Cred and Zomato drive disruption through unique value propositions tailored to younger, tech-savvy demographics.

The market will continue to evolve, driven by technological advancements, multi-brand collaborations, and regulatory reforms. Companies that adopt AI-driven personalization, explore coalition models, and address sustainability preferences will likely gain a competitive edge. As consumer awareness grows and regulatory frameworks strengthen, businesses must balance innovation with compliance to unlock the full potential of loyalty programs in India's diverse and competitive landscape.

Current State of India’s Loyalty Program Market

• India's loyalty program market is expanding quickly, driven by digital transformation and rising consumer awareness of rewards systems. Major players such as Payback India and Tata Neu have established significant market presence by leveraging retail, travel, and banking partnerships. For instance, Tata Neu integrates rewards across Tata Group's diverse businesses, including retail, aviation, and hospitality.
• With high engagement in sectors such as retail, e-commerce, and fintech, Payback India partners with brands like Big Bazaar, ICICI Bank, and BookMyShow, creating a multi-brand ecosystem that caters to diverse customer needs.
• The widespread adoption of smartphones and digital wallets has fueled loyalty program growth in India. Platforms such as Amazon Pay and PhonePe reward customers with cashback and vouchers, offering real-time incentives that enhance engagement and retention.

Competition Intensity in India’s Loyalty Market

• The market is led by programs like Payback India, Tata Neu, and e-commerce loyalty platforms like Amazon Prime, which combine rewards with exclusive benefits such as free shipping and early deals. These players dominate by creating integrated ecosystems that offer seamless experiences across multiple categories.
• Companies are investing heavily in AI-driven analytics to provide tailored offers and recommendations. For instance, Flipkart Plus uses customer data to deliver personalized rewards and ensure frequent engagement, particularly during sales events.
• Indian consumers are extremely value-conscious, pushing companies to offer cashback, discounts, and other immediate rewards. Paytm, for instance, attracts users by offering cashback on digital transactions, making it a preferred choice for millions of consumers.

Types of Players

• Retailers like Reliance Retail and e-commerce platforms like Flipkart and Amazon dominate the loyalty space. Flipkart Plus and Amazon Prime offer integrated benefits such as free delivery, OTT subscriptions, and early access to sales, attracting a broad consumer base.
• Indian banks, such as HDFC Bank and ICICI Bank, offer robust loyalty systems tied to credit card usage. ICICI’s collaboration with Payback India allows customers to earn and redeem points across a wide network of partners, enhancing value for high-spending customers.
• Emerging players like Cred and Zomato are disrupting the market with innovative loyalty models. Cred rewards credit card users with Cred Coins that can be redeemed for exclusive offers, while Zomato Gold provides dining and delivery discounts, targeting urban millennials.

Market Structure

• The market features a mix of dominant players and niche programs catering to specific demographics. For instance, Cred targets premium credit card users, while smaller programs like Paytm First cater to cost-conscious digital wallet users.
• High operational costs and the need for extensive partnerships pose challenges for new entrants. Established players like Amazon Prime and Tata Neu benefit from strong brand recognition and robust ecosystems, making it difficult for smaller competitors to scale.
• Niche players often rely on innovation to compete, such as Zomato Gold’s subscription model for dining discounts or Cred’s unique focus on financial rewards for timely credit card bill payments.

Future Competitive Landscape

• AI and blockchain are expected to drive the next wave of innovation in loyalty programs. Flipkart Plus and Tata Neu will likely enhance AI-based personalization, while startups like WazirX could introduce blockchain-powered loyalty solutions, offering secure and transparent rewards.
• Coalition loyalty programs will likely grow, with platforms like Payback India expanding their partner networks to include more brands. Tata Neu, which already integrates rewards across multiple sectors, is a model for the potential expansion of multi-brand loyalty ecosystems in India.
• Programs offering eco-friendly incentives will gain popularity as Indian consumers increasingly align with sustainability values. For example, banks like SBI are exploring green loyalty programs that reward customers for adopting environmentally friendly practices, such as using electric vehicles or reducing paper-based transactions.

Regulatory Changes Impacting Loyalty Programs

• The upcoming Data Protection Bill will require companies to enhance data privacy measures, ensuring transparency in customer data collection and use. Programs like Amazon Prime and Flipkart Plus must invest in secure systems to maintain compliance and retain customer trust.
• Indian regulators focus on ensuring fair practices in loyalty programs, particularly regarding points expiration and redemption processes. Clear communication of terms and conditions will become essential to avoid misleading consumers.
• Loyalty points may soon be subject to financial regulations, with discussions around classifying them as taxable benefits. Such changes could impact how programs like ICICI Payback or Cred structure rewards.

Scope

This report provides in-depth, data-centric analysis of loyalty programs in India. Below is a summary of key market segments.

India Retail Sector Spend Value Trend Analysis

• Ecommerce Spend
• POS Spend

India Loyalty Spend Market Size and Future Growth Dynamics by Key Performance Indicators

Value Accumulated and Value Redemption Rate of Loyalty programs in India

India Loyalty Spend Market Size and Future Growth Dynamics by Functional Domains

• Loyalty Schemes
• Loyalty Platforms

India Loyalty Spend Market Size and Future Growth Dynamics by Loyalty Program Type

• Points programs
• Tier-based programs
• Mission-driven programs
• Spend-based programs
• Gaming programs
• Free perks programs
• Subscription programs
• Community programs
• Refer a friend program
• Paid programs
• Cashback programs

India Loyalty Spend Market Size and Future Growth Dynamics by Channel

• In-Store
• Online
• Mobile

India Loyalty Schemes Spend Market Size and Future Growth Dynamics by Business Model

• Seller Driven
• Payment Instrument Driven
• Others

India Loyalty Spend Market Size and Future Growth Dynamics by Key Sectors

• Retail
• Financial Services
• Healthcare & Wellness
• Restaurants & Food Delivery
• Travel & Hospitality (Cabs, Hotels, Airlines)
• Telecoms
• Media & Entertainment
• Others

India Loyalty Spend Market Size and Future Growth Dynamics in Key Sectors by Online

• Retail
• Financial Services
• Healthcare & Wellness
• Restaurants & Food Delivery
• Travel & Hospitality (Cabs, Hotels, Airlines)
• Telecoms
• Media & Entertainment
• Others

India Loyalty Spend Market Size and Future Growth Dynamics in Key Sectors by In-Store

• Retail
• Financial Services
• Healthcare & Wellness
• Restaurants & Food Delivery
• Travel & Hospitality (Cabs, Hotels, Airlines)
• Telecoms
• Media & Entertainment
• Others

India Loyalty Spend Market Size and Future Growth Dynamics in Key Sectors by Mobile App

• Retail
• Financial Services
• Healthcare & Wellness
• Restaurants & Food Delivery
• Travel & Hospitality (Cabs, Hotels, Airlines)
• Telecoms
• Media & Entertainment
• Others

India Loyalty Spend Market Size and Future Growth Dynamics by Retail

• Diversified Retailers
• Department Stores
• Specialty Stores
• Clothing, Footwear & Accessories
• Toy & Hobby Shops
• Supermarket and Convenience Store
• Home Merchandise
• Other

India Loyalty Spend Market Size and Future Growth Dynamics by Accessibility

• Card Based Access
• Digital Access

India Loyalty Spend Market Size and Future Growth Dynamics by Consumer Type

• B2C Consumers
• B2B Consumers

India Loyalty Schemes Spend Market Size and Future Growth Dynamics by Membership Type

• Free
• Free + Premium
• Premium

India Loyalty Platform Spend Market Size and Future Growth Dynamics by Software Use Case

• Analytics and AI Driven
• Management Platform

India Loyalty Platform Spend Market Size and Future Growth Dynamics by Vendor/Solution Partner

• In House
• Third Party Vendor

India Loyalty Platform Spend Market Size and Future Growth Dynamics by Deployment

• Cloud
• On-Premise

India Loyalty Spend Market Size and Future Growth Dynamics by Loyalty Platforms

• Software
• Services

India Loyalty Spend Market Size and Future Growth Dynamics by Software Use Case Platforms

• Custom Built Platform
• Off the Shelf Platform

India Loyalty Spend Market Size and Forecast by Consumer Demographics & Behaviour

• By Age Group
• By Income Level
• By Gender

Reasons to buy

• Insights on Strategy & Innovation: Navigate through future direction of the loyalty programs and platforms market by understanding strategic initiatives taken by key players to gain market share and innovation.
• In-depth Understanding of Loyalty Market Dynamics in India: Understand emerging opportunities and future direction of the loyalty programs and platforms market, key drivers, and trends. Benefit from a detailed market segmentation with 50+ KPIs.
• Value and Volume KPIs for Accurate Understanding: Value and volume key performance indicators (KPIs) help in developing an accurate understanding of market dynamics.
• Competitive Landscape: Get a snapshot of competitive landscape with key players and market share in India. Formulate your strategy by gaining insights into the current structure of the market.
• Develop Strategies to Gain Market Share: Create and fine tune your targeting strategy in the loyalty sector, identify growth categories and target specific segments across the value chain; evaluate important trends and risks unique to your market.
• Deeper Understanding of Consumer Behaviour: Increase ROI by understanding how consumer attitudes and behaviours are evolving. Get a detailed view on retail spending dynamics across consumer segments.