Is discounting the only way to sustain an e-commerce business?

Abstract

Each one of us has at some point or the other shopped online. While for a certain section of people, shopping online has been about convenience or variety; for a majority of e-commerce customers, buying online means promo codes, discounts and savings. Unlike offline shopping, there is very little loyalty to one particular store when it comes to buying online. Many a time, this may be because what is being sold online is a pure commodity and irrespective of where it has been bought from, the product remains identical. At other instances, the customer wants to be rewarded for saving the seller the cost of human interaction. Another store is just a click away for the customer. So, does that mean that the only way to grow an e-commerce business is through discounting? How would such a business manage to make money? How far would the investors go in sinking money to acquire new customers, in the hope that this will translate into customer loyalty?