In today’s increasingly competitive and externally homogenous e-retail industry, sustaining a business has become a mammoth challenge. In these situations Competitive Advantage emerges as the key to sustained profitability of the business. According to Itami’s Theory of Invisible Assets, it is the invisible assets such as brand loyalty that are the main source of competitive advantage as they are hard to develop cannot be duplicated by any other firm. This paper attempts to propose a function for Brand Loyalty in e-retail in India based on existing literature and a survey done to assess the effect of various variables on brand loyalty. The dominant variables are then discussed with the industry professionals to study the kind of challenges the companies face while trying to achieve them. Further the paper includes an experimental research conducted to ascertain the ways by which brand loyalty accrues to competitive advantage in e-retail. On the basis of the findings of the research, the paper then proposes ways to build brand loyalty in e-retail by the firms.