Peeking into the Indian basket: An in-depth study on how Indians spend

Muktha Tavane
3 min readNov 26, 2021


Do Indians like spending on grocery and online shopping? Is it true that investing continues to be a first week of the month habit? How India spends is a strong indicator of income, the changing demographics and aspirations of users across the country. PhonePe with over 47% market share in UPI has data and deep insights into the spending habits of people in cities, towns, and villages all over the country.

In this edition, we look at how Indians allocate their money for different types of expenditures over the course of a month. The data considered here takes into account only payments made towards merchants and not peer-to-peer transactions.

Indians Love Retail Therapy

Based on data gathered for the month of September 2021, we observed Indians tend to splurge on retail & shopping — which accounts for over 25% of all spending in a month. This is followed by grocery & daily needs as well as service & utilities at over 12%, closely followed by food & beverages at over 10%.

This spending habit stays true across varied spend buckets, be it among users who spend more than INR 10K, between INR 10K and INR 30K, and over INR 30K each month. So, clearly retail & shopping occupies a major share in a user’s basket followed by essentials like grocery, food, and utilities.

Digging deeper into spending habits beyond the metro cities

A major chunk of PhonePe’s users come from non-metro cities. In fact, users from non-metros outspend metro users in the retail & shopping category. One likely reason behind this trend could be the tendency of metro residents to have nuclear families as opposed to fairly large families in non-metro cities.

In fact, we have observed that users from non-metro cities who spend more than INR 30K per month, tend to spend 30–35% on retail & shopping. Higher disposable income could explain the high expenditures in shopping & retail expenses.

How much does a user spend on the PhonePe app

Delving into the data allowed us to understand that a large portion of users spend less than INR 10K, closely followed by the INR 30K+ spend bucket indicating that PhonePe is a popular medium for those looking to spend for different types of expenditures.

The chart below shows the split on how much users are spending on the PhonePe app.

The trend in transactions shows that during a month, a user spends slightly higher on financial services in the first week which includes paying the credit card bill, making loan repayment, buying or renewing insurance, and investing in Mutual Funds. In the last week of the month, on the other hand, users are keen to take care of utilities such as DTH, broadband, rent, education, etc.

A spring in everyone’s steps post lockdowns

As a result of the pandemic, Indians have started shopping online and using PhonePe to make contactless payments at offline stores. The lockdowns imposed during the second wave in May 2021, however, affected the way people spend their money. The share of retail & shopping during the month dipped by 6–7% across the country, while healthcare & essential categories saw an increase of 2–3% when compared to April 2021. Soon after the lockdowns were lifted and Covid cases began to subside in the months of June and July 2021, expenditure on retail & shopping gradually went up by 7–9%, while spending on healthcare dropped by about 4–7%.

Digital payments have transformed payments across the country. It has democratised access, allowing users irrespective of their location to spend on what they like, without having to make any compromises. PhonePe has been at the forefront of this revolution, replacing traditional cash-intensive practices with digital payment technologies for hassle-free payments.