India Loyalty Management Market Overview, 2029

Unlike their western counterparts, Indian consumers crave a deeply personal connection with brands, with a staggering 74% citing it as a key factor in loyalty. This emotional connection transcends traditional points and discounts, demanding a loyalty program that understands their unique needs and aspirations. Further complicating the landscape is the fragmented nature of the retail sector. India boasts a thriving network of mom-and-pop stores alongside burgeoning e-commerce giants. This creates a loyalty ecosystem where a one-size-fits-all approach simply won't cut it. To win customer loyalty, brands must devise a nuanced strategy that seamlessly integrates offline and online experiences. A recent example of this successful integration is Reliance Jio's loyalty program, Jio Rewards, which allows users to earn points not just through phone recharges but also by shopping at partner stores like Reliance Fresh. Also, India boasts the world's youngest population, with millennials and Gen Z constituting a dominant force. These digital-native demographics crave interactive experiences, and loyalty programs are catching on by incorporating gamification elements. One can earn badges for repeated purchases, unlock exclusive content through virtual challenges, or participate in leaderboards for a chance to win dream vacations. Companies like Flipkart are pioneering this approach, with their "Gamified Loyalty Program" that integrates interactive elements to boost customer engagement.

According to the research report "India Loyalty Market Overview, 2029," published by Bonafide Research, the Indian Loyalty market is projected to grow by more than 15% CAGR from 2024 to 2029. On the positive side, a burgeoning middle class with rising disposable income presents a fertile ground for loyalty programs. This, coupled with increasing smartphone penetration and digital adoption, creates a perfect storm for mobile-driven loyalty initiatives. Indian consumers, particularly millennials, are tech-savvy and appreciate the convenience and instant gratification offered by loyalty programs with user-friendly apps and real-time rewards tracking. Furthermore, the fiercely competitive nature of the Indian retail sector incentivizes businesses to implement loyalty programs as a powerful tool for customer retention and differentiation. However, this dynamic market also faces hurdles. Many loyalty programs struggle to effectively engage customers beyond the initial sign-up. Complex program structures, unclear reward structures, and cumbersome redemption processes can leave consumers frustrated and disengaged. Additionally, with a multitude of loyalty programs vying for attention, standing out from the crowd can be difficult. To win in this crowded space, businesses need to offer unique and personalized rewards that resonate with individual customer needs. Data security is another concern, as some consumers remain wary of sharing personal information required for program participation. Finally, the ever-evolving regulatory landscape in India necessitates close monitoring to ensure compliance and avoid any legal pitfalls.

Looking at what loyalty programs offer, there are two main categories: solutions and services. Solution-based programs focus on rewarding customer behavior and building long-term loyalty. This could involve points systems where customers earn points for purchases, which can then be redeemed for discounts, free products, or special experiences. Tiered programs reward customers based on their spending habits, offering exclusive benefits like priority service or access to members-only events for high-tier members. Gamification is another growing trend, where programs incorporate game mechanics like challenges and badges to keep customers engaged. Service-based programs, on the other hand, provide immediate benefits and value to customers. Cashback programs offer a percentage of the purchase amount back as instant savings. Co-branded programs partner with other businesses to offer customers additional discounts or benefits at partner stores or services. There are also airline miles or travel points programs linked to travel spending, allowing customers to accumulate points redeemable for flights or hotel stays. The Indian loyalty market is further segmented by the type of enterprise offering the program. The retail sector is a major player, with loyalty programs being a common strategy for supermarkets, fashion stores, and electronics retailers to encourage repeat business. The Banking, Financial Services and Insurance (BFSI) industry uses loyalty programs to incentivize credit card usage and other financial transactions. Hospitality businesses like hotels and resorts leverage loyalty programs to retain guests and encourage them to book directly. Media and entertainment companies use loyalty programs to reward subscriptions, movie tickets, or online streaming service purchases. The IT and Telecommunications sector offers loyalty programs that reward customers for data usage or phone plans, while manufacturers might use loyalty programs to incentivize purchases of specific electronics or appliances. Transportation companies like airlines and ride-sharing services can also implement loyalty programs to reward frequent travelers. Finally, other sectors like consumer electronics stores and grocery chains are also increasingly adopting loyalty programs to attract and retain customers in a competitive market.

Another key division is by operator type, focusing on who runs the loyalty program. Business-to-Business (B2B) operators are the puppet masters behind the scenes, creating and managing loyalty programs for other companies. These B2B operators understand the Indian market and can design programs that resonate with local consumers. For example, they might develop programs that reward customers for buying groceries with points that can be redeemed for discounts on movie tickets or gold, a popular investment in India. On the other hand, Business-to-Consumer (B2C) operators are the shopkeepers running their own loyalty programs directly. This could be a large clothing chain offering points for every purchase or a local grocery store rewarding customers for buying their own branded products. Another way the Indian loyalty market segments itself is by program development, focusing on where the program is stored and accessed. On-premise loyalty programs are like local stores, kept in-house by the company running the program. This might involve using physical cards or paper coupons that customers collect and redeem at the store. While this method is familiar to many Indian consumers, it can be less flexible and require more manual tracking. In contrast, cloud-based loyalty programs are like modern shopping malls, existing on the internet. These programs are accessed through mobile apps or online platforms, making them convenient for customers and easier to manage for businesses. Cloud-based programs also allow for greater flexibility, with features like tiered memberships, personalized rewards, and real-time tracking of points.

Considered in this report
• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029



Aspects covered in this report
• Loyalty Management market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Offering
• Solution
• Services

By Enterprises Type
• Retail
• BFSI
• Hospitality
• Media & Entertainment
• IT and Telecommunications
• Manufacturing
• Transportation
• Others (Consumer Electronics, Grocery)

By Operator
• B2B
• B2C

By development
• On-Premise
• Clouds

The approach of the report:
This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Loyalty Management industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.