Gully Network wants to become the 7-Eleven of India

Founded by RentoMojo’s cofounder Ajay Nain, Gully Network is building a network of hyperlocal commerce outlets called GULLYMART. The company partners with stand-alone stores that aspire to increase their income and automate their end-to-end operations.

The company has so far raised $2 million and is in the process of raising a $5 million round. Gully Network has an annual GMV of $5 million and expects to grow 10X to $50M GMV next year. The company is currently present in four cities with 60 stores and have tied up with all the FMCG brands nationally, and most of its sourcing is directly from these brands. Gully Network plans to grow to 20 cities with 500 stores in the next 12 months.

The segment of mid-sized stores is worth $25 billion in tier 1 and tier 2 cities. Gully Network estimates to capture a $2 billion market share with 20,000 stores across the country. BusinessLine spoke to Nain about the company’s game plan for becoming the 7-Eleven of India.

What was your motivation behind starting Gully Network?

Gully Network tech enables every stakeholder in the existing ecosystem rather than re-inventing the wheel. I had earlier worked in the FMCG industry before co-founding RentoMojo, and I understood the retailers’ pain points and the expectation of the FMCG brands from their trade channels.

With Gully Network, I wanted to build something omnichannel or phygital in nature as online and offline will co-exist in the future. I believe in creating a moat for our partner stores by giving them a real-world solution for their real-world problems that work on the ground. Our exclusive B2B2C model ensures high wallet share and product stickiness.

Why should a mid-sized store come to you? What are the solutions that you provide to stores that come on board with you?

Our tech solution is tailor-made for mid-sized stores and addresses the key ask from the segment. We have two key value propositions for them, increase in income and end-to-end automation. In addition to this, we generate additional income streams for our partner stores.

What challenges have you have faced, and any impact of the pandemic on your business?

Our funnel conversion has improved from 10 per cent to 50 per cent in the last two years. We are creating a network effect that starts showing its magic at scale. We do see a change in the buying behavior of retailers. They now prefer a one-stop solution for everything, including consistent supply with better margins. In my opinion, the pandemic did not cause a long-term change regarding demand and supply. Online penetration has increased by some extent as far as customer touchpoint is concerned. And we are very much prepared for that with our omnichannel presence.

What differentiates you from the various competitors that ease the operations of such mid-sized stores?

We focus on India’s tier 1 and tier 2 cities and aim to build India's 7-Eleven for Indian urban consumers by tapping the mid-sized store's segment. We aim to build India's largest network of hyperlocal commerce destinations in every neighbourhood of the country. The most important part is that we are a pure tech-play with unparalleled operations-light and inventory-free model. The capital efficiency and scalability of the model enable us to grow much faster than the rest of the competitors.