How Nykaa started a revolution and catapulted to unattainable heights

Recently, Nykaa made headlines valued at $1.3 billion for FY 2020. Entering the coveted unicorn club, Nykaa doesn’t seem to be stopping anytime soon. It is estimated to grow at a double-digit CAGR of 16.39% and will ultimately be able to reach $2.89 billion by the end of FY 2026. These projections are not only optimistic but are a  promise of the potential future Nykaa has to become a full-blown Corporate Empire.

Nykaa is based in the cosmetic and beauty industry and offers a wide range of products and services across fashion, beauty and wellness markets. It does so via both physical and online methods. With its website rapidly becoming one of the top e-commerce stores in India, all eyes are on Nykaa. To find out about Nykaa’s founder, business model, marketing strategy, current growth, and future prospects- read on!

The Inception of Nykaa:

It is apparent that you can’t begin an empire without being instated as the ruler. Or, in Nykaa’s case, The Empress. Falguni Nayar founded the company in 2012 at fifty years of age. With an MBA in Finance from IIM Ahmedabad, she spent 18 years of her professional life in the banking sector. She noticed several drawbacks and deficiencies in the cosmetic industry of this country which prompted her to establish a platform targeted at making authentic, exquisite, and foreign products available to Indian consumers. Nykaa began in Mumbai with the motto of “Making simple women extraordinary in every aspect”.

Marketing Like No Else:

Nykaa has quickly grown extremely popular among Indian consumers thanks to its all-encompassing marketing model that is far-reaching, trendy, and appropriately branded for target customers. Even its logo, tagline, and ad campaign slogan are brilliantly designed to promote an idea of the celebration of feminine beauty. Hence, Nykaa is very precise with its details. It was quick on its feet to foray into social media marketing, YouTube marketing, and online marketing in general. Nykaa media four social media accounts to promote its wide-ranging products from cosmetics to its online apparel store. Besides that, it also runs Nykaa beauty book- discussing the latest makeup and beauty trends and tips. Nykaa frequently collaborates with influencers- the modern age trendsetters.

Nykaa also has successful YouTube ad campaigns which are short and attention-grabbing. It mostly avoids ads that require a skip-after-five-second option. It also runs its own YouTube channel which mainly focuses more on offering beauty tips, makeup hacks, personal care routines, and other self-care content. Via this channel, Nykaa also offers direct interaction with day-to-day consumers via the comments section and sometimes also answers their doubts, questions, and queries. This is an ingenious way to maintain a humane side to a mostly run-after-profit business.

Besides all this Nykaa also tries to stay in the public eye by sponsoring beauty contests and the latest fashion events.  It focuses on its young consumers by organizing and sponsoring college events and fests.

Business Model:

Nykaa has an inventory-based business model where it purchases goods and products in bulk from manufacturers directly and stores them in its warehouses which are located in Delhi, Bangalore, and Mumbai. These products are sold either on its eCommerce website online, or physically at its three major fabulous offline store chains, which are-

• Nykaa Luxe

• Nykaa On Trend

• Nykaa Kiosks

Inventory based business model reaps high margins of profit and has resulted in Nykaa becoming a successful business. Besides the company stays ahead in a competitive pricing market.

A Work In Progress:

Nykaa observed a  $324.77 billion return in FY 2021, which is a 38.10% increment from FY 2020. Quite recently, Nykaa acquired a Kolkata-based skincare and wellness brand Dot & Key. It is the most recent successful acquisition, the third in all of Nykaa’s acquisitions till date. The other two are 20Dresses in March of 2019 and Pipa.Bella in April of 2021.

Nykaa caters to about 5 million active users and 15 million registered users. It offers them a range of products from over 5000+ brands. The company also launched Nykd, an intimate wear brand, as soon as it began to see the effects of the pandemic recede in October 2020.

During the pandemic, Nykaa saw a fall in its sales up to around 70%. However, it recovered fast from the recession of sales during the pandemic and has already recovered by more than 90% from what it was during the pandemic outbreak.

Nykaa – Funding, And Investors:

Next Steps and The Dawn of A New Age:

Nykaa has big prospects planned for the near future. Falguni Nayar has evidenced Nykaa’s vision to expand its offline market by opening 180 stores all over India by 2024.

Nykaa is still on its quest to build an undefeated brand image and brand value. It is planning something big and rewarding for its loyal customers and hopefully, will grow beyond India and expand itself in the global market.

Credit To – Prashansa Parwal