Since there are many in the field it becomes indispensible for the e-retailers to build their own brand value. And in the process many choose the popular media, TV. The money they are spending on the ads are increasing to the mammoth proportion. There is about 50 percent year on year growth on ad expenditures, but than the profits are very feeble.

Some of the reasons that make Indian e-commerce, especially e-tailing, currently unprofitable include high customer acquisition costs, high inventory carrying costs, cash on delivery offer, and high cost of fulfillment, and for the business to be sustainable they have to be rationalized. At this point, most e-tailing brands are financing customer acquisition through venture funding and in such a scenario the marketing needs to work that much harder.

This is an industry with a long gestation cycle and hence the initial investments are bound to look pretty high. E-tailers and their investors may find solace in the popular tale of Amazon. It started in 1995, went public in 1997 and recorded its first profit in 2004.

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