Consumer brands are reworking their e-commerce marketing strategies as digital advertising becomes more expensive with diminishing incremental reach, prompting a shift away from scale-at-all-costs growth.
Instead of relying heavily on marketplace (Amazon, Flipkart, etc.) ads and aggressive discounting, small brands across categories such as food and personal care are now dispersing spends across platforms including their own websites, investing more in brand-building, and focusing on retaining customers.
“At scale, it becomes very expensive to advertise because you don’t have enough incremental reach available,” said Jatan Bawa, co-founder of Sauce VC-backed oral care brand Perfora.
At the same time, brands such as The Organic World are rethinking efficiency metrics. “We’re far more focused now on channel quality, cohort behaviour and long-term value rather than just top-line acquisition metrics,” said Gaurav Manchanda, founder and director of Nimida Group, the parent company of The Organic World.
“With rising ad costs, we’ve become more selective. We test campaigns first and only scale what works. The focus is on efficiency, not just reach,” Gaurav Kwatra, chief marketing officer at packaged foods maker iD Fresh, told Mint.
India’s e-commerce market is projected to surge to $300 billion by 2030 from $140 billion currently, according to a February 2026 report by Boston Consulting Group.
However, while online shopping continues to grow rapidly, brands are finding it harder to make money from that growth. Returns on advertising have declined nearly 30% in the past few years, as ad costs rise and competition intensifies, according to a report by Shop Culture shared exclusively withMint. Shop Culture is a consultancy that helps businesses grow on e-commerce platforms.
This means companies are spending more to acquire customers but seeing lower returns on that investment. However, overall ad spending continues to climb, with India’s ad market projected to cross ₹2 trillion by 2026, led by retail media and connected TV, according to a December 2025 report by WPP Media, highlighting a clear mismatch between growth and profitability. Small brands are also among the top spenders on e-commerce and quick commerce channels, making it crucial to track their strategies.
“The e-commerce industry is still stuck in the 2022 mindset. Back then, brands could scale by listing aggressively and spending heavily on [e-commerce] ads. By 2025, that playbook is starting to show its cracks,” said Subarna Mukherjee, founder and chief executive of Shop Culture.
Rebalancing the marketing mix
The changing economics of digital advertising are forcing brands to rethink how they allocate marketing budgets. Heavy spending on e-commerce performance marketing is no longer delivering the same returns, pushing companies to diversify beyond marketplaces.
“As brands scale, the audience on e-commerce platforms starts getting exhausted,” said Perfora’s Bawa. “It becomes very expensive to advertise because you don’t have enough incremental reach available.”
Perfora, for instance, has cut its reliance on e-commerce platform advertising from 35–45% of its annual marketing spends to about 20%, redirecting nearly 80% toward channels such as YouTube and Instagram to drive awareness and reach new consumers.
“Rising customer acquisition costs has helped us to focus on building a stronger product and brand pull overall, so we’re not overly dependent on paid channels to drive growth,” said iD Fresh’s Kwatra.
This marks a shift from earlier strategies that tied spending closely to channel-wise revenue. Today, brands are prioritizing reach and discovery to build a wider funnel, rather than chasing immediate conversions, according to Bawa.
The shift is also playing out at a broader level. Brands are rethinking how they grow and not just where they spend, by expanding across markets and focusing on stronger execution, according to Shop Culture’s Mukherjee. “Better execution, not just higher spending, is becoming the key differentiator.”
Efficiency in focus
As costs rise, brands are sharpening their focus on efficiency. Customer acquisition costs have increased by 10–15%, while competition has intensified, making both acquisition and retention more expensive.
“Simply increasing ad spends doesn’t translate to proportional growth anymore,” The Organic World’s Manchanda noted.
This is prompting a more disciplined approach to marketing. Instead of ramping up spends, brands are becoming more selective about channels and focusing on improving conversion quality and customer retention.
At Perfora, too, the shift is visible in how marketing is evaluated. While performance marketing remains a core part of the mix, its share has become more efficient over time as organic demand and brand recall improve, Bawa said.
For iD Fresh, repeats and retention are critical. “We’re constantly working on supply chain efficiency, because in a category like fresh, a good product experience is what brings consumers back,” Kwatra added.
At the same time, brands are exploring new levers to protect margins. The Shop Culture report points to quick commerce as one such opportunity, offering faster growth and, in some cases, better pricing power than traditional marketplaces.
Companies are also investing in first-party data and AI-led optimisation, but with a clearer understanding of their limits. “AI is not a growth strategy, it is an amplifier. It enhances strong systems and exposes weak ones,” Mukherjee added.
