Does e-commerce threaten corner stores? India’s consumption survey data has some clues

livemint.com:

Subscribe to enjoy similar stories. Household Consumption Expenditure Survey (HCES) data has been making headlines for its deep dive into India’s standard of living and evolving consumption patterns. The latest HCES 2023-24 fact-sheet, released hot on the heels of the 2022-23 micro-data, offers a treasure trove of insights into shifting consumption over the past year.

But the HCES offers more than just an update on spending habits. It gives us a ring-side view of how India shops, eats and lives. An intriguing subplot within the larger data-set is the rise of e-commerce.

Data that sheds light on a crucial question: How deeply has e-commerce penetrated India? Is e-commerce the new face of shopping or just a blip? While the HCES is not explicitly designed to map this, its data offers valuable insights on how online shopping is or isn’t reshaping consumption. We delved into the available 2022-23 numbers to unravel this. First things first.

Households with internet connections, as per the survey, constitute 62% of the total in rural India and 77% in urban areas, both exceeding earlier estimates of internet penetration. Only 2% of rural survey respondents order or pay for food online, compared to 15.34% in urban areas. For non-food items, 11.30% of rural respondents shop online, versus 37.33% in urban areas.

In consumables and services, digital engagement stands at 17% for rural and 46% for urban respondents. The accompanying table details item-wise online purchase percentages for rural and urban respondents. Categories like clothing (32.52%) and footwear (21.55%) have seen noticeable online adoption in urban areas, underlining the popularity of online platforms for discretionary spending, where, according to a report by Pahle