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New Delhi: A new Amazon Ads thought paper promises a roadmap for digital-first brands to scale from 1,000 to 1,000,000 customers. It touts an enticing proposition: 84% of Indian consumers are eager to try new brands, and new customers contribute 66% of revenue on average across categories.
The report positions the festive season and retail media as golden tickets for acquisition, suggesting that consistent visibility (via ads) influences purchases more than discounts.
A closer look, however, shows the playbook glosses over critical realities. Key growth angles such as, actual revenue uplift, promo dependence, and brand-equity risk, are underexplored.
It skirts the hard questions brand leaders face today: Where is the topline lift? What happens to brand equity when discovery is driven by discount-led platforms? How sustainable is growth when CAC rises faster than retention?
What the last few quarters actually show
Across large Indian FMCG names, alternate channels (modern trade, e-commerce, q-commerce) have grown fast, yet headline revenue remains mid-single digit, the channel shift hasn’t translated into outsized topline.
HUL: Strong double-digit gains in e-commerce and modern trade; overall revenue ~4% with modest volume. Urban demand “moderated,” even as organised trade and e-commerce outpaced the base.
Nestlé India: Domestic sales up ~5-6% YoY; e-commerce ~12.5% of domestic sales – healthy digital mix, modest topline.
Dabur: Single- to high-single-digit revenue growth while doubling down on e-commerce and q-commerce.
Tata Consumer: E-commerce up ~61% YoY in Q1 FY26; alternate channels’ mix jumped, yet overall growth lags, a mix shift, not a topline flywheel.
Revenue growth vs customer growth: the missing piece
The paper fixates on customer counts and assumes more buyers equal long-term growth. In practice, digital-first brands have learned that more customers don’t always mean more sustainable revenue. Many Indian D2C players that rapidly scaled have seen growth plateau or turn unprofitable. CAC has soared while repeat rates and LTV haven’t kept pace.
Even the report’s own line, 66% of revenues from new customers, reveals a vulnerability. If sales depend on constant onboarding, repeat business is weak. Brands land on a hamster wheel, chasing ever more new buyers just to hold topline. It’s a recipe for burnout: expensive marketing creates short-term spikes without ensuring durable growth.
The playbook pushes an “always-on” full-funnel ad strategy, which conveniently aligns with an ad platform’s incentives, but doesn’t ask who foots the bill. For venture-funded startups, burning cash to acquire a million customers may inflate valuations briefly, yet revenue quality matters. Without sound unit economics, vanity metrics (installs, first purchases) won’t save a brand. Recent history offers cautionary tales: even category leaders have been punished when profitability falls under scrutiny.
Promotion addiction and the discount trap
The paper plays down discounts, noting that 57% of shoppers are influenced by consistent visibility versus 43% by discounts. That still acknowledges nearly half the market is deal-sensitive. In reality, many digital-first brands are hooked on promotions, trained by platform dynamics and competition.
The fallout:
Thin margins: Frequent sales and coupons compress margins. Revenue may rise on volume while earnings stagnate.
Volatile cycles: Big events create feast-or-famine demand; promo-acquired cohorts often have low LTV.
Deal loyalty: Shoppers become loyal to the deal, not the brand, undermining any normalised pricing later.
Brand dilution: Perpetual discounts cheapify even premium labels; full-price loyalists feel alienated and brand perception drifts from aspirational to bargain.
The report showcases cases with intent lifts and 4x sales spikes, but at what cost, and do they last? Spikes often coincide with heavy promo support. The hard work of weaning off perpetual discounting, the elephant in sustainable D2C growth, goes unaddressed.
Brand-equity erosion in a digital-only strategy
Heavy dependence on digital and retail media carries a long-term risk the paper barely mentions: brand commoditisation. If most interactions happen via performance units and third-party marketplaces, the brand’s identity is defined by algorithmic slots and sponsored tiles, not by distinctive storytelling.
On Amazon or Flipkart, shoppers compare dozens of near-substitutes in seconds and often choose on price or ratings. Unless a brand invests elsewhere to shore up salience, its story fades in a sea of lookalikes. Why should Brand X’s serum command a premium over Brand Y’s if both sit at 4.3 stars and are often on sale?
Notably, several digital-born players are rediscovering offline, pop-ups, and experiential levers to build trust beyond the scroll. Ironically, strengthening equity often returns to traditional principles: consistent quality, word-of-mouth, physical presence, controlled scarcity. The report’s silence on brand building beyond the digital funnel is a glaring gap. A million ad-acquired customers mean little if the brand doesn’t resonate.
Retention and sustainable growth
Perhaps the biggest omission is retention. Winning a first-time buyer is the start, not the finish. Real growth comes from engagement, frequency, and loyalty. The paper’s framing 1,000 to 1,000,000 customers equates success with volume. But what about moving from Rs 1 crore to Rs 100 crore in revenue, or from breakeven to healthy profits?
Retention needs its own strategy: great service, consistent product quality, community-building, loyalty programmes, and judicious, targeted offers outside sale seasons. None of this features in the acquisition-heavy playbook. By ignoring retention, it tacitly encourages growth-at-all-costs, a mindset many founders are abandoning as investors demand clear paths to profitability.
What leading teams should do now (for sales and brand)
1) Force an incrementality audit
Prove what’s truly incremental—by cohort (new-to-brand vs new-to-category) and by channel. If q-commerce is cannibalising MT/GT, rebalance. Use q-commerce surgically for trials, adjacencies and top-up packs.
2) Set hard guardrails on promo dependence
Cap promo days and discount depth by SKU. Protect flagship equity; use pack–price architecture to widen affordability without trading down the core.
3) Rebuild the 60/40 spine
Tilt ~40% of working media back to fame-driving storytelling (mass digital video/TV/OOH). Let retail media harvest the demand. That’s how you bend topline, not just dashboards.
4) Treat retail media as shelf-rent, not a brand strategy
Fund it to defend rank, but tie spend to profitability thresholds (ACoS/ROAS caps, cohort payback). When efficiency flattens, stop bidding up the click.
5) Fix gross margin before chasing GMV
Relentless digital growth with a weak mix simply scales a low-quality P&L. Push premium mixes, pricing-power NPD, and attach rates that lift net revenue per order.
6) Exploit platform reach, rebuild reach off-platform
Grow where consumers are (Amazon, Flipkart), but re-invest in owned data and salience, CRM, first-party audiences, communities, so you’re not buying back the same customer every month.