Unfortunately, the value proposition for most e-com sites seems to the novelty factor of shopping online, discounts and other freebies, and huge advertising spends. Hardly the stuff that can hold a business up for long. No wonder then that most online business-to-customer setups are deep in the red.

So, unless e-com sites are able to develop value propositions for potential customers that’ll simultaneously give them a healthy bottom line too, they’ll find it difficult to survive. In other words, if the value they offer is going to be just the convenience of the Web (discounts and freebies must come to an end someday), then they may face a very tough challenge from established brick-and-mortar businesses that can go online and offer the same convenience.

In short, we may see the decline and fall of most clicks-only businesses, unless they go the clicks-and-mortar way. In fact, the first symptoms of this are already available in the West. Amazon.com is quietly making heavy investments in conventional distribution infrastructure. CDNow, which at one time was heralded as the model for the future, is now facing very tough times. The others better watch out.