Nykaa Success Story

About Nykaa

Nykaa is a brand based in India that specializes in multi-beauty and personal care products. It had originally been set up as a sole e-commerce medium until it later began building up various retail outlets in many other urban cities across India.

Nykaa Founders

A graduate with MBA from IIM Ahmedabad, Falguni Nayar begins to work at Kotak Mahindra in investment banking after her graduation. She became the Managing director at Kotak in 2005. She worked for Kotak Mahindra for about 18 years, during which she decided to move beyond the banking sector and experience in other sectors. She recognized the unexplored potentiality of the online beauty sector. 

Nykaa was started in 2012 by Falguni Nayar and is headquartered in Mumbai. She entered the market to remove the irregularities in the beauty industry. Despite high demand, the industry was not up to the mark. Her expertise in Investment banking has made her value the sustainability of the business.

Despite being a capital-intensive industry, she decided to raise and accommodate funds accordingly. The company has pioneered in providing a one place shopping experience for all domestic brands, international brands, luxury & prestige brands, premium brands, niche, and cult brands.


Business Model of Nykaa

Its business model revolves mainly around inventory management as the company purchases the products directly from brands or distributors and then provides them to the customers on its platform. 

Thinking about how it is different from marketplace models like that of Amazon or Flipkart?

Well in the latter, products are listed by third-party sellers for the customers to make a purchase, which is not the case of Nykaa. This helps Nykaa to secure its customers from any fraudulent sellers and maintain the authenticity of the platform. 

Apart from this, exclusive collaborations with big brands in beauty and fashion, the creation of private labels across categories, and having a physical presence have all helped it stand out in a competitive e-commerce industry where buyers are generally vendor-sceptic and looking for the best deal.

Furthermore, the company’s offline stores are present in 3 formats - On Trend, Luxe, and Kiosks. On Trend & Luxe deals with trending and fashionable brand products. While Kiosk is specifically for featuring premium and luxury brands including Dior, MAC, Huda Beauty, Estee Lauder, and many more prestigious brands.

Apart from Amazon and Flipkart, purple.com is a direct competitor of Nykaa. Purple is one of the companies present in the online retailer business in the same segment. 

Further, in order to interact with beauty enthusiasts, the company formed an online platform - Nykaa Network. This helps them connect better with the customers and provide them with a unique experience.  

Nykaa’s Marketing Strategy

The main element is to promote brands and products via multiple channels, websites, and blog pages. It pitches the products digitally to reach customers in all regions of the country. To directly reach the right audience, the company also collaborated with Femina to conduct Femina Miss India over the last few years.

Another key to its success is its ability to create relevant, engaging, and relatable content for its audience. The focus is to connect with beauty enthusiasts through their YouTube and Instagram handles. The company's ability to establish itself as a legitimate voice in beauty and, increasingly, fashion talks through social media platforms.

How is Nykaa operating now?

This India-based startup originally began as the sole e-commerce platform. Since then, the company is continuously expanding its operations.

 

It started with the online operations but then diversified into offline stores as well. Currently, the company has 76 brick-and-mortar stores. Earlier, it was only operating in the women's segment. But in 2019, it entered into the men's segment by launching Nykaa Men. As of now, the company has 300+ brands in its catalogue under the women, men, and kidswear sections.


Conclusion

The company is planning to expand further in the offline mode through its brick-and-mortar stores. It is planning to open 180+ stores by 2024. This will help the company to boost its sales and revenue. Apart from this, the company is launching an IPO soon, which could take its valuation to 4 billion dollars. It will be the first company in the online beauty marketplace to launch an IPO. Besides, the company is also planning to achieve profitability before going public. 

We could say that Nykaa has become the amazon of the beauty industry. This platform has been instrumental in dispelling the misconception that e-commerce and beauty retail does not work well in India. Due to a continuous rise in sales and the profitability of the company, its plan to launch the IPO has been preponed.

One can say Nykaa has become into the Amazon of the cosmetics sector. Because of this platform, the myth that e-commerce and beauty retail don't function well in India has been decisively disproven. The company's plan to start the IPO has been postponed due to an ongoing increase in sales and profitability.