Overview
According to Bank of America aggregated credit and debit card data analyzed by analyst Justin Post, online spending in India grew 13% year‑over‑year in May, accelerating two percentage points from April.
Comparison with Physical Retail
Brick‑and‑mortar retail increased 4% YoY in May, markedly slower than the online channel.
Online Penetration
Online penetration reached 29.8% in May, up 1.8 percentage points YoY.
Outlook and Drivers
Post expects penetration gains to continue throughout 2026, citing AI‑enabled service level improvements and expansion of online grocery. He cautions that rising gas prices and broader inflation could begin to weigh on discretionary spending.
Amazon Specifics
Street projections show Amazon’s North America retail segment growing 14% YoY in Q2, a 2‑percentage‑point acceleration QoQ. BofA card data indicates online spending has accelerated 1 percentage point quarter‑to‑date. Amazon will host Prime Day in June, a month earlier than the July timing last year. Post maintains a Buy rating on Amazon, highlighting continued retail share gains and positive exposure to AI through AWS.
Category‑Level Performance
- Transit spending grew 6% YoY in May, decelerating from 18% YoY in April, reflecting New York tolling downtimes; transit now accounts for 11% of Q2 YTD spend versus 4% in Q1.
- Online restaurant spending rose 10% YoY QTD, a 2‑percentage‑point acceleration from the full first quarter.
- Online grocery spending increased 6% YoY in Q2 YTD, remaining stable from Q1.
- Electronics showed the strongest acceleration, with YoY growth climbing 10 percentage points from April.
- Department stores and sporting goods each accelerated 4 percentage points YoY.
- Transit experienced the steepest deceleration, with YoY growth slowing 12 percentage points from April.
Conclusion
The data underscores a robust shift toward digital commerce, driven by AI and grocery expansion, while inflationary pressures from gas prices may temper future discretionary online spend.