The market for loyalty programmes in India is anticipated to surpass US$ 2,922.9 million in 2022 and grow to US$ 10,852.6 million by 2031 at a CAGR of around 15%. In terms of worldwide loyalty programme market share, India’s market for loyalty programmes accounts for 4% to 8%.
Several retailers and businesses use loyalty programmes as one of their marketing methods to draw in and keep their channel partners and customers. They provide customers with additional benefits and encourage them to spend more money through these initiatives.
Rewards, points, discounts, and other unique incentives are provided by loyalty programmes in an effort to boost sales and foster client loyalty. This aids businesses in building a solid base of loyal customers.
The market for loyalty programmes is a subset of the market for loyalty management, which also includes software and services (professional services and managed services). These variables led to an 18% growth rate in the Indian loyalty programme market over the course of the historical period (2016-2021).
What are the Factors Driving Demand in India Loyalty Program Market?
Programs that reward customers’ loyalty are essential for lowering overall operational costs. Instead of spending more on marketing initiatives to expand their customer base, businesses are concentrating more on escalating repeat business.
So instead of spending more on marketing initiatives to find new channel partners, businesses are more concerned with sustaining the repeat purchase rate. The organisations’ current priority is increasing the percentage of repeat business.
Increasing the rate of repeat business is one of the key factors pushing businesses to implement loyalty programs.
How will Adoption of AI to Offer Personalized Rewards to Channel Partners Benefit Market?
Today’s industry professionals mostly concur that personalisation is advancing steadily across numerous industry areas. Artificial intelligence (AI) adoption to produce a more personalised experience has been more and more popular in recent years.
In order to personalise incentives that are likely to be deemed more effective than generalised rewards, the players gained information by creating user profiles. By logging in the channel partners’ purchasing histories, AI (artificial intelligence) can also be used to reward them for their cooperation. This function can assist the company in thoroughly analysing the purchasing patterns of channel partners at various levels or tiers.
Which Program Type Will Dominate the India Loyalty Program Market?
“The Most Preferable Loyalty Program to be the Combination of Point-Based and Pre-Decided Loyalty Program”
In terms of programme type, the combined market share of point-based and pre-determined loyalty programmes in India accounts for a significant proportion of 64.8 percent. However, due to the ease of earning and using points, point-based loyalty programmes kept a sizable proportion in 2020. Channels can exchange their points for freebies, credits toward future purchases, or reduced services.
Which Consumer Orientation in the India Loyalty Program Market Will Continue to Be Highly Sought After?
“Need for Sales Incentives to Boost the India Loyalty Program Market”
Sales incentives are predicted to dominate the market in terms of consumer orientation since they increase profitability, boost sales success, and enable long-term growth. An effective loyalty programme helps businesses retain current customers, draw in new ones, lower turnover, and increase revenues. Employee incentives and channel incentives, however, will hold a sizeable market share of 17.7% and 10.2%, respectively.
Which end user is the market leader for loyalty programmes in India?
In terms of end users, the market for loyalty programmes in India will be dominated by large organisations. However, according to Future Market Insights, a sizable portion of the B2B small and medium business segment would experience stable growth over the projection period (FMI).
According to vertical, the market is anticipated to be dominated by other sectors, such as aviation, hospitality, BFSI, healthcare, education, and IT & telecom.
To survive the intense competition in the Indian loyalty programme market, prominent businesses are implementing a variety of techniques. In the meantime, other market participants are implementing methods including product launches and mergers to obtain a competitive edge in the sector.
India Loyalty Program Market by Category
By Program Type:
- Point-Based Loyalty Program
- Pre-Decided Loyalty Programs
- Combination of Point-Based and Pre Decided Loyalty Programs
By End User:
- Small& Medium Enterprises
- Large Enterprises
By Consumer Orientation:
- Employee Rewards
- Sales Incentives
- Channel Incentives
- Electronics & Electricals
- Luxury Brands
- Mobile Phones