Indian e-commerce and its search for the holy grail

E-Commerce is an established industry in the west with behemoths such as Amazon ruling the roost; India has also seen huge proliferation of the e-commerce sites during last few years with around 650 e-commerce sites operating currently. Large number of sites are opening mainly enamored by the hype created by top players and hundred(s) million dollar valuations commanded by companies such as Flipkart, Snapdeal and Myntra. In fact, the popularity of e-commerce in India has grown manifolds in last 12-24 months with the top sites attracting huge traffic to their domains:

Source: ComScore

The Indian consumer is spoilt for choice amongst all these options but there is something amiss. The top sites are acquiring consumers by burning through huge amounts of VC money (acquisition cost of around Rs. 1,000 per customer) which is downright unsustainable. Everybody is looking for the answer to this Indian e-commerce puzzle and the holy grail of customer acquisition. What do you think is the best way forward for ecommerce industry and what is the best customer acquisition strategy. Please share your opinions in the comments section.