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SeventyMM Diversifies Into E-Commerce

SeventyMM, once an online movie rental business, has diversified into mainstream e-commerce, offering product categories like  Apparel, Electronics, Mobile Phones and Tablets, and even Books, among others. The company which has till now raised around $21.4 million from Matrix Partners India, Draper Fisher Jurvetson, ePlanet Ventures and NEA- IndoUS Venture partners, in separate funding rounds, with an objective to expand movie rentals, has taken a mid-way course correction. It has, as the saying goes, pivoted. But it isn’t just SeventyMM: Reliance ADA Group company BigAdda also changed into an e-commerce company, as did Battery Ventures funded group buying site Taggle. E-commerce is India’s new gold rush.

At the time of writing this post, SeventyMM offers a limited catalogue of products across each category. The apparel and accessories sections do feature Bollywood themed products. However, we are not sure why SeventyMM would like to come in direct competition with online stores like Flipkart, LetsBuy, HomeShop18 and IndiaPlaza, and lose its niche status of being a movie rentals service.

Organized Movie Rental Services: A bleak future?

While video libraries were a popular phenomenon in the 90s, local movie rental services have been on the decline after the advent of  cable, DTH, online video streaming and cheaper DVDs. Companies like Moser Baer reduced the price of movie DVDs and introduced DVDs that feature more than one movie. With satellite rights for movies being finalized at an early stage, movies are premiered on television, through tv channels and DTH operators, weeks after their theatrical release.

Online piracy also accounts for taking the share away from movie rental services. Also, the online movie rental services can be blamed for not offering a user friendly, easy to navigate web experience. Unlike mature markets such as the US and the UK, where TV shows and movie rentals have gone online, eliminating the need for physical delivery, Indian rental services like SeventyMM have shied away from introducing them, despite making announcements.

Although Reliance ADAG’s BIGFlix is winding up physical presence and taking the online streaming route, it is still following a Pizza-delivery like route for rental services, and most sales pitches take place through its tele-calling center.

Indo-US Venture Partners: Conflict Of Interest

Indo-US Venture Partners, who have invested in SeventyMM, also have investments in Jasper owned SnapDeal, online apparel store Myntra and e-commerce site IndiaPlaza. With SeventyMM also diverifying into e-commerce, wouldn’t there be a conflict of interest, since personnel from Indo-US are on the board of companies operating in the same segment?

Others Who’ve Changed Course

SeventyMM is not the first one to diversify into another segment. We have seen the likes of Reliance’s BigAdda turning into an e-commerce deals site from a social networking service. Recently, deals site Taggle also switched gears, and transformed into an e-commerce site. Minglebox, a website built as an online alternative to a “college hangout” (more on that here) featuring college events changed course and started positioning itself as a “College, Education and Career” site. People Group owned Fropper.com, which was initially a dating site,  repositioned itself as a social networking site

What’s worth pondering is how do all these new mainstream e-commerce sites plan to differentiate themselves, with established players. Differentiation will have to come in terms of product range, service delivery, online user experience, pricing and payment options, to gain traction in a market full of similar offerings.

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