It’s raining rewards points as e-retailers chase loyalty
According to industry executives, this change reflects a structural change in behavior rather than a seasonal trick.
Amit Koshal, founder and chief executive of rewards platform TWID, noted that his platform sees food and groceries providing the highest average savings for users in 2025, at around 8% of order value, surpassing savings from bill payments, e-commerce and even travel. TWID works with sellers 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 have been redeemed across our network this year and ₹Valued at Rs 100 crore, it signals a shift from occasional big-ticket payments to routine, daily use,” Koshal said. Mint.
The increase in usage frequency, despite decreasing ticket sizes per transaction, shows that reward points are increasingly being used for regular spending rather than being accumulated for indulgences. In this sense, according to Koshal, rewards begin to function as “embedded liquidity” in the vault; This means a soft budgeting layer that helps households smooth spending without changing their consumption patterns.
Fintech Razorpay Inc., which rewards users with POPcoins for routing UPI (Unified Payments Interface) transactions through it. For assisted payment platform POP, beauty, personal care and food are the top spending categories, with repeat rates increasing sharply as affordability increases.
“India is a value-driven market. Loyalty points are especially strong for repeat customers; when a person remains loyal to a brand, rewards strengthen 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 program market is moderately concentrated by 2025, with top players accounting for 50-60% of the market. According to estimates by market research firm Future Market Insights, brands such as Payback India, Amazon Prime and Tata Neu dominate the segment, while startup-focused digital loyalty platforms and retailer-specific programs provide competitive diversification.
positive reinforcement
For years, credit cards have been a staple of the nation’s rewards economy; It has conditioned consumers to accumulate points through spending and redeem these points largely in bank-led ecosystems. But shoppers now want rewards to translate into direct, tangible benefits on their favorite shopping and delivery platforms.
“I tend to stick to a few apps for most of my shopping,” said Aditya, a 28-year-old product manager in Bengaluru. “It’s convenient if I can easily use the points I earn there for my regular purchases. It just makes the overall experience a little more worthwhile.”
Riya, a 30-year-old marketing professional based in Mumbai, agrees. “If I’m ordering groceries every day, I’d like to see my points reduce that bill immediately, rather than waiting a year to buy a plane ticket.”
Based on this example, platforms are even bringing in global names to increase their appeal.
In January, Swiggy and e-commerce platform Flipkart partnered with Abu Dhabi-based airline Etihad Airways to allow its members to earn and redeem air miles for food delivery and shopping in India.
In August, hospitality chain Marriott Bonvoy linked travel rewards with Flipkart’s ecosystem, enabling points conversions and redemptions across travel and retail.
The country’s leading marketplaces are simultaneously expanding the scope of their in-house loyalty engines.
Flipkart has built multiple tiers into Flipkart Plus by tying rewards more closely to frequency and category spend. Eternal, the parent company of food delivery platform Zomato, continues to combine dining and food ordering benefits through its Gold program. In fact, the decrease in order value for Gold customers led to an increase in higher net order value in the December quarter due to higher order frequency from budget-conscious customers, Eternal said in its Q3 shareholder letter.
Beauty retailer Nykaa is launching a ‘Glam Pass’ pilot to build loyalty to its partner brands. Mint It was reported on January 6.
These programs aim to make rewards interoperable across categories rather than limiting them to single-use cases, said Satish Meena, an analyst at market research firm Datum Intelligence. “This shift comes as platforms focus more on loyalty initiatives, believing that a broader range of use cases will enable repeat use and increase lifetime value.”
Loyalty is not cheap
But behind this pressure lies increasing tension. As more platforms pile on tiers, partnerships and cross-category payments, the cost of financing rewards is rising, even as margins on groceries and essentials remain thin, according to Datum Intelligence’s Meena.
“Currently, many platforms pay to keep customers active. If these rewards do not lead to true loyalty over time, they become an additional cost rather than driving growth.”
Moreover, Meena stated that the next phase of loyalty will depend on making rewards more fluid and instantly useful. This includes easier conversions, broader merchant adoption, and tiered benefits like priority service and exclusive access designed to deepen engagement beyond simple refunds.
