Nykaa .

com – Multi brand online retailer in “Beauty & Wellness” category

. Nykaa is primarily an e-commerce website that offers beauty and wellness products from all
the leading brands including Lakmé, Kaya Skin Clinic, L'Oréal Paris, etc. It has its offline presence
in 17 stores and is expanding. It has over 850+ curated brands and own brands and 35,000
products.

Nykaa is derived from the Hindi word Nayika- an actress – a person of beauty. According to Falguni Nyar
, Nykaa signifies the transformation of the Pupa to butterfly. She says a young also goes through this
type of transformation. Notably, Butterfly is a symbol of freedom, energy, and grace. It is not easy for a
person to quit job at the age of 50 and start over everything in business from scratch. Had it been so
easy, Falguni Nayar’s story as an entrepreneur would not have been considered exemplary. She bid
adieu to her career at the age of 50 and nurtured her dream of launching a beauty platform, which got
popular as Nykaa in today’s date and time. Falguni Nayar was the former managing director at Kotak
Mahindra Capital Company, and she had a stellar career there. She completed her education from
IIM Ahmedabad and worked as a venture investor and merchant in Kotak Mahindra Group for a
time span of around 20 years. She also worked for the global operations of the group in the
United Kingdom and the United States of America and further she headed the institutional
equities division. In the year 2005, she turned out to become the Managing Director of the
venture. . She started Nykaa in the year 2012. Nykaa has successfully created a spot for itself in India’s
$6.5 billion cosmetics market. With the revenue of Rs 570 crore, up 166% from Rs 214 crore in the year-
ago (march 2018), it achieved break even and is hoping to turn a profit next year.

She was dead sure that there was the immense potential of beauty segment. Also drew her inspiration
from multi-brand beauty stores like Sephora (French multi-brand cosmetics retailer), which she wanted
to replicate in India. Market research data collected by her shows that the demand for the
category was high as there was very few places to get the genuine beauty products.

Falguni stresses on the need for women to come out of their shells and be confident about
handling both professional and personal lives with equal panache.

Digital marcom approach adopted by Nykaa:

Nykaa uses a high end content to showcase the global trends that has proved a winning formula
for the brand name. Keeping the users engaged through interesting contents on its blog and
social media has driven many customers on their web portal. Since its inception in 2012, within
4 years, the company has grown vastly. Soon after its launch, the company acquired its niche
over the social media platforms and till now Facebook has 1.4 million fans while Twitter has
11.1K followers with more than 133K followers on Instagram. Nykaa runs a YouTube channel
“Nykaa TV” to provide the people best video guidance for using cosmetics and fashion products

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and remain up to date in the society. They have many “how-to videos” to help their users and
prospective customers.

Nykaa offers many coupons to its customers so that they keep purchasing items from the
portal. During the festive time, the brand promotes themselves on various other platforms.
They make use of coupons and discount deals to attract more and more customers. With the
continuous promotion and offers over the social media platforms, the company now gets more
than 50,000 unique visitors each month and on an average 80% of them being women.

Nykaa Beauty experts: Along with contents and videos over the company’s product page and
social media platform, they also have more than 25 Nykaa experts who give solutions for all
your fashion queries online. There was a time when women would go to Delhi from Punjab,
only for a beauty shopping trip. Or they would ask their cousin to purchase a particular lipstick
from a trip abroad. Now they can get all beauty tips and just order genuine and luxury brands of
beauty and wellness products online. According to the company, it receives 15,000 orders a
day, mostly from consumers between the ages of 22 and 35, who have an interest in good
grooming. Another attraction is the content—online make-up tutorials and product reviews are
a great draw. But let us face it, the main reason for shopping at Nykaa is accessibility.

The beauty business has progressed beyond basics such as kajal and bindi for women, or
shower gels and deodorants for men. And it is expected to grow faster than the online apparel
industry, which accounts for a large chunk of the e-commerce business. Rising purchasing
power, demand for exclusive beauty products, greater product authenticity, and supply chain
reliability should drive rapid growth in the online beauty segment over the next few years,
according to RedSeer Consulting, an Internet-focused consulting firm in India. According to
RedSeer’s estimates, the domestic online beauty and personal care market is expected to cross
$3.5 billion (Rs 22,109 crore) by 2022 from about $300 million now. In comparison, the online
apparel market is worth $3.8 billion, growing at 10-12%.

Store brand: After having established itself as a multi-brand beauty retailer, Nayar decided to
tweak the business model by introducing her own brand in 2015. First up was a line of nail
enamels. The range has since expanded to include kajals, lipsticks, lip paint, body mists and
lotions, among other items. Market intelligence input showed that part of the problem was
with Indian import regulations, which made registering new colours a lengthy and tedious
process. Nayar realized a domestic manufacturer did not need to go through the process, if the
nail enamels are produced locally, so that it can be available in the market quickly. The strategy
worked. Nykaa’s own nail colours sell 8-10 times more than the next best-selling nail brand on
its website. The another reason for good sale was a “combination of good rates and cool
colours". Nykaa offers 120 nail colours at a Nykaa store, Nayar says, “Retailing s all about
detailing “I’m drawn to a neon-green one. It’s called Key-Lime Slush. A coral-color is named

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Cherry Pop is the top-selling nail enamel. The charcoal-grey color known as Squid Ink Mousse,
retails for Rs199.

Partnership and distribution: Nykaa has been aggressive in its strategy of going for exclusive
partnerships with global brands, creating private labels, and having an offline presence. Nykaa was the
first retailer in the country to tie up with global beauty brands such as Wet n Wild and Huda Beauty
from the U.S. and South Korea’s innisfree to bring their products to India. Brands such as Kiehl’s,
Clinique, Estée Lauder, KIKO Milano, MAC, The Face Shop, and Bobbi Brown are also available online
exclusively on Nykaa. “Nykaa has managed to keep the basics right from the beginning. From its initial
days to now, it continues to be well-stocked, customer experience has improved, and it has price points
for customers across segments.

Nykaa entered the market at a time when many in the industry were on the verge of writing off the
online beauty business. Between 2012 and 2015, many entities such as GoodLife and Amber Wellness
shut shop with little interest or support from customers and investors. Beauty as a category was growing
slower than other categories due to limited selection, supply chain hurdles, and problems such as the
risk of fake products. But Nayar was unfazed. She still set up Nykaa, bootstrapping the venture with her
own funds.

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