Ecommerce in India: Will the Advertising Spend Pay Off?

This case is about the brand building strategies followed by the Indian ecommerce companies in order to increase the loyalty of customers to their brands. After growing at a moderate pace since the first online B2B directory was launched in the year 1996, the Indian ecommerce sector experienced exponential growth between 2009 and 2015. Initially, online services led the growth of the sector in the country. However, companies that sold physical goods started gaining importance in the later years. The leading ecommerce companies relied on the business model of providing deep discounts to attract more customers to their portals. As a result, customers started switching between the companies depending upon the discounts offered by different ecommerce companies for each purchase. They did not stay loyal to any ecommerce brand in the long run. Discounts started eating into the revenues of ecommerce companies and many of them accumulated huge losses.