Catty rivalry in India's e-commerce space

Bloomberg | Getty Images

As India's e-commerce race heats up, online retailers are pulling out the stops to stay ahead, including catty marketing campaigns.

Snapdeal's new campaign tagline "For others it's a big day. For us, today is no different" is a dig at rival Flipkart, which promised "India's biggest ever sale" on Monday.

"Until Monday, there have just been skirmishes between India's e-commerce players. Yesterday was the first war," said Arvind Singhal, chairman of retail advisory firm Technopak.

"In the next few days, we could see a three-way fight between Flipkart, Snapdeal and Amazon, which could be brutal," he said.

With India's festival season underway, e-commerce players are vying for consumer wallet-share, with major discounts and promotional schemes.

"Media is flooded with ads from e-commerce players," said Dheeraj Sinha, chief strategy officer, South & South East Asia at advertising and marketing agency Grey Group.

"Most e-tailers are out there, trying to shore up their shopper traffic and sales volume. With no visibility of profitability, the game in e-tailing is being fought on the volume of transactions and traffic," he said.

The festival season begins in late-September and ends early-December. It's critical for the overall retail sector, when up to 40 percent of the year's sales are generated, according to Technopak.

Despite Snapdeal's mocking response, Flipkart, the country's biggest online retailer, reached its target of $100 million in gross merchandise value (GMV), or the value of goods sold, within ten hours.

India's e-commerce sector lags far behind China – where online sales are expected to top $180 billion this year – but it's enjoying bumper growth.

Read MoreMeet the man behind the 'Amazon of Southeast Asia'

The Indian e-commerce market was worth $13 billion in 2013, according to according to a joint report of KPMG and Internet and Mobile Association of India. It's forecast to reach up to $70 billion by 2020, driven by increasing internet penetration and improvement in related infrastructure like payment and delivery systems.

India is home to around 195 million internet users, less than a third of China's 620 million, according to Internet World Stats.

But it isn't the potential growth in internet penetration that's got Singhal excited about India's online retail space: "What's driving our optimism about the sector is the sheer competitive intensity backed by money."

Excitement over the sector has driven early-stage venture capital investment above $1 billion in 2014, according to the Financial Times, as both domestic and foreign funds hope that local start-ups can mimic the growth of technology businesses in the mainland.

Read MoreIndonesia - E-commerce's new frontier market?

In the next six months, Indian conglomerates such as Tata Sons, Reliance Industries and Aditya Birla Group will enter the space, said Singhal.

"We are looking at billions being invested in the space in a short period of time," he said.

Headwinds for some

But as cash floods the sector, not all are cheering.

Bricks and mortars are beginning to feel the pain from the heavy discounting offered by their online competitors.

Read MoreWhat the world's most avid shoppers are buying online

"It's common for consumers to go shopping, browse and order the same or similar product on their smartphone while they are sitting down to a meal at the mall. Consumers don't have a strong sense of brand loyalty here," said Singhal.

"Department stores and regular retailers are now stuck between a rock and a hard place," Singhal added. "Their fixed costs are increasing, but their sales are not."