Nykaa on a roll both online and offline looking to spread retail footprint
23 June 2023, Mumbai
As a new entrant, Nykaa, the popular brand for beauty, clothes, accessories, and lifestyle products, has taken the fashion world by storm in the last two years.
Incepted by Falguni Nayar the founder and CEO, she ranked among the richest self-made people in the world. Indeed, Nykaa’s accelerated investments in online websites and store rollouts and upgradation has taken it further than expected.
As an e-commerce portal that curates a range of beauty and fashion products, Nykaa is currently focusing on its fashion segments, while investing in growth engines for the future. As per media reports, the target is to be worth $180 billion by 2027 from $100 billion now.
Focus on product portfolio, customer experience
A recent investor presentation report of the company has said during the full year of FY23,Nyakaa will see its operating revenue jump 36 per cent over last year as operations increase to around Rs 5,143.8 crores, this even though net profit for the year fell around 50 percent to Rs 21 crore from Rs 41.3 crore reported in the previous fiscal, mainly due to short-term challenges to discretionary spends.
As Falguni Nayar said in a recent interview “With steady improvements of over 40 and 60 per cent two-year growth in beauty and fashion platform conversions, our investments towards building the right technology stack as well as customer-first shopping experiences are paying off.
This strong step-function growth also comes on the back of improvements in personalization capabilities, breadth and depth of product portfolio, UI UX enhancements, marketing optimizations, and quality of in-bound visit traffic.”
New products the way forward
Although fashion, beauty, and personal care (BPC) is their flagship segment, Nyakaa has been venturing into newer portfolios such as men’s grooming, eB2B, and health & wellness with Nudge in the last two years.
This has contributed 5.4 percent to Nykaa’s consolidated GMV sales in FY23. According to the company’s reports, there is now a consumer base of 18 million high-income and 115 million mid-upper households which will keep growing further till 2030 at the premium end of the market in fashion and beauty.
Co-founder Adwaita Nayar, explains, fashion is a relatively newer business for them, just about three years old, and beauty has crossed the 10-year milestone and so the marketing costs are a bit different.
Moreover, beauty sees repeat behaviour and buyers are consuming extremely well again.
Building a house of brands
In both the BPC and premium fashion segments, Nykaa has been focusing on its House of Brands strategy, including acquired and in-house labels. With growing popularity, the company has acquired three and built 10 brands internally since FY20.
In the BPC category alone, Nykaa has 12 brands, with company-owned brands contributing to Rs 789 crore, or roughly 12 per cent to the segment’s GMV this year.
Inorganic growth
Flagship brand Nykaa Cosmetics clocked in Rs 250 crore, in GMV for the year, while acquired brands of Dot & Key and Kay Beauty, a JV with leading Bollywood actress Katrina Kaif has together recorded an annual GMV of around Rs 130 crore each.
Besides its huge online presence, Nykaa now has three offline store formats called Nykaa Luxe, Nykaa On Trend, and Nykaa Beauty Kiosks with retail back to normal, they are looking to open new doors to spread their offline footprint.
