Nykaa is an Indian E-commerce business. It was founded by Falguni Nayar, that sells beauty and wellness products. Its founders established it in 2012, and in 2020, it became the first unicorn in India headed by a woman. It was the first beauty E-marketplace in India and changed the entire landscape of the Indian market.
The founder observed large gaps in the beauty and personal care industry. On one hand, she saw the increased demand for cosmetics in India buying products from the unorganized sector and on the other, there were few high-end retail outlets. The flourishing market in countries like France and Japan inspired her.
The company listed on the Bombay Stock Exchange and the National Stock Exchange on November 10, 2021. It reported a net revenue of Rs. 5,143 crores in FY 23.
Nykaa has disrupted and transformed the beauty and fashion industry in India.
How Nykaa differentiated?
- Business Model- Nykaa functions on an inventory-based business model. Its warehouses are located in Delhi, Pune, Mumbai, Bangalore, Kolkata etc. It purchases products directly from the manufacturer and stores them in the warehouses. The orders are then shipped from there.
- Authentic products- Since the company sources its products directly from the manufacturers, customers have faith in the authenticity of high-end products. They also claim to sell 100% original luxury products.
- Clicks and Bricks- Nykaa launched the business with its website and then developed its app. In December 2020 the company expanded by opening its first offline store in Delhi. Today, it is not only available online but also has three kinds of offline stores- Nykaa Luxe (for international luxury brands such as Estee Lauder, Dior, MAC etc.), Nykaa on Trend (it has all brands available from popular ones like Maybelline, Sugar, Lakme and the luxury ones as well) and it also has Nykaa Kiosks across the country.
- Nykaa Prive– Prive is its loyalty programme that provides benefits and rewards to loyal customers.
Three tiers division –
i) Members (purchase of Rs. 2,000)
ii) Gold (Purchase of Rs. 5,000)
iii) Platinum (Purchase of Rs. 10,000).
Once you become a loyal customer, the company sends a product as a gift on your birthday month. - Nykaa Pro Programme- It is an exclusive membership for makeup artists, salons, and beauticians. According to its website, the public company provides access to a catalogue with products for professional use and special offers. Additionally, it also offers content and training material to beauty professionals.
- Nykaa Superstore- They launched an app for retailers called ‘Superstore’. Moreover, provides valuable services such as credit, transparent profit margins, and quick doorstep deliveries.
- Marketing strategy- The brand focuses on every marketing strategy out there. It leverages social media to provide content and collaborate. It indulges in event marketing, digital marketing and offers heavy discounts. It offers sales on festivals, Pink Friday Sale and clearance sales.
Competitive Cosmetic Space
Startups that have been funded heavily by the VCs in India saw an opportunity that big corporates could not. Similarly, Nykaa will eventually face competition against the TATAs and the Reliance of India.
Reliance has already launched Tira, while TATA has TATA Cliq Palette in the e-commerce beauty segment. The cosmetic market of India has already reached a market of $7 billion in 2024 and it is expected to grow more. It is certainly a good time for already established companies to invest in specific industries.
In an interview, Nayar says that competition eventually lets everyone grow in the market. This has been true for Nykaa as well. Over the years, they have expanded significantly from Nykaa Fashion to Nykaa Man. It also has its own range of products under the Nykaa Cosmetics Ltd. It is definitely making beauty products easily accessible, affordable and inclusive.