Xin Ou
Research expert covering Greater China
Nykaa - statistics & facts
Falguni Nayar founded Nykaa E- Retail Private Limited as an online-only retailer of cosmetics and beauty products in 2012. In her late 40s, she decided to switch from her position as a Managing Director at Kotak Mahindra Capital, to becoming an entrepreneur of her own. After its initial success, the Mumbai-based company expanded into omni-channel retail with the opening of its first offline shop in Delhi in 2020. The women-centered online marketplace records over 1.5 million orders a month and over 15 million registered users as of June 2021.
While top dogs Amazon and Flipkart had established themselves in India’s e-commerce landscape, cosmetics sales remained largely neglected. This left the niche open for focused online retail of beauty and cosmetic products by Nykaa. In terms of direct competition, beauty retailer Purplle continued to record massive losses just as Nykaa turned profitable in 2020. On the other hand, Flipkart-owned marketplace Myntra, redefined its beauty product portfolio and continued to be a major competitor. Apart from its own website, Nykaa managed to place its products on horizontally organized marketplace platforms including Amazon India.
The online cosmetics and beauty product niche
India was leading cosmetic, fragrance and personal care markets worldwide with a revenue of more than 14 billion U.S. dollars. The unorganized retail sector significantly dominated the beauty and personal care products, much like other segments across the country and accounted for nearly three quarters of the market. Another quarter was mostly handled by offline retailers such as chemists, saloons, and supermarkets. Modern trade in general showed a low penetration of online retailers.While top dogs Amazon and Flipkart had established themselves in India’s e-commerce landscape, cosmetics sales remained largely neglected. This left the niche open for focused online retail of beauty and cosmetic products by Nykaa. In terms of direct competition, beauty retailer Purplle continued to record massive losses just as Nykaa turned profitable in 2020. On the other hand, Flipkart-owned marketplace Myntra, redefined its beauty product portfolio and continued to be a major competitor. Apart from its own website, Nykaa managed to place its products on horizontally organized marketplace platforms including Amazon India.
Nykaa’s product portfolio
Besides hair and skin care, make-up brought in the largest share in Nykaa’s revenue. Offering a wide range of mass, premium and luxury products, the company was able to attract customers from all socio-economic strata. Although it expanded to include fashion products in 2015, beauty remained the primary focus. With nykaaman.com, the company made an entry into the growing male grooming market as well. This segment was estimated to contribute between five and eight percent to the overall business in fiscal year 2021. High revenues resulting from the sale of products were particularly due to the company’s high expenditure into advertisement and promotion.Going public
In March 2020, Nykaa achieved unicorn status with its valuation of more than 100 billion Indian rupees. Despite delays likely due to the pandemic, the company was looking for a stock exchange listing by late 2022. This would add it to the other list of IPOs including Flipkart, Zomato and PepperFry. Reports estimate the valuation to reach more than 4.5 billion U.S. dollars by then.
