Nykaa, India’s biggest cosmetic hub: Success Story

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Nykaa Success Story

The global beauty industry is proliferating in the year 2020, the cosmetic market of India was valued at $1.3 billion and growing with a CAGR of 16.39% and it is estimated that it’ll grow to reach $2.89 billion in FY2026. With the steady growth, the industry has also produced a huge number of loyal customers most of them being teenagers and young adults, due to the rapid digitalization of the industry.

Unlike the previous times, consumers do not need to visit a physical store, they can rather simply order cosmetics online from any online shop. Nykaa is one of the biggest players in the cosmetic industry, which provides a huge range of cosmetics, fashion, beauty, and wellness products on its E-commerce website. This allows customers to order any products at any given time, by reading the reviews present on the website.

Nykaa – about the company

Nykaa is an Indian beauty retail company that specializes in beauty and wellness products. Recently Nykaa has also been involved in fashion products and innerwear in the men’s section. The brand also offers content like tutorial videos, articles, and even e-magazines based on beauty and wellness.

During the pandemic when all other businesses did not do very well, Nykaa was the beneficiary. When people had very low cash in hand, they continued spending money on personal care products leading to a boost in the beauty industry. Only the industry growth isn’t responsible for the growth of Nykaa, there are many marketing strategies behind the scenes in its success.

Nykaa Success Story

Nykaa- Founder

Falguni Nayar

Falguni Nayar is the founder and also CEO of Nykaa, which is currently India’s biggest cosmetic and wellness portal. She is considered the richest self-made woman in India and also holds the rank of 10th position among the richest self-made in the world.

Nayar is an alumnus of IIM Ahmedabad. After the completion of her MBA, she joined A F Ferguson & Co. as a manager and worked there for like 8 years. Then she joined Kotak Mahindra capital. She worked there for 18 years and became the MD of Kotak Investment Banking back in 2007. Soon she resigned to follow the entrepreneurial path.

Also Read: Sugar Cosmetics – Success Story

Nykaa- How it started

Falguni Nayar started Nykaa in the year 2012 along with her husband and is currently headquartered in Mumbai. After thorough research and looking out for a promising sustainable business opportunity she saw an opportunity in the Indian beauty industry. After seeing the inconsistency and irregularities in the cosmetic product market. With the hope of bringing consistency to the European, Japanese, and Chinese markets in India as well she started Nykaa. The rest is history.

Nykaa- Business model

Nykaa is a D2C platform with an inventory-based business model. Unlike most e-commerce platforms, Nykaa doesn’t let 3rd party vendors list their products. Nykaa purchases products from more than 150 brands directly and then list them on its platform for its customers. This way they can eliminate any forgery items. By following this model, the chances of bad service, and poor product quality can be avoided, also the quality check becomes easier.

All the products of Nykaa are sold either on the website or through offline settings including Nykaa Luxe, Nykaa Kiosks, and Nykaa On Trend. Although Nykaa started off solely as an e-commerce platform it grew into an omnichannel presence. As of today, Nykaa has over 80 offline stores and over 2 lakh products online.

After its listing on the Indian stock exchange, its valuation has boosted up to an astonishing figure of $13 billion.

Nykaa – IPO

Nykaa made an amazing debut on the Indian Stock Exchange when it listed its IPO from October 28 to November 1. The IPO of Nykaa was subscribed 81 times, due to the influence of other institutional investors.

The stock started trading at a premium price of over 82% at Rs 2054 on NSE when we compare it to the IPO issue price of Rs1125.

Nykaa – Funding, and Investments

So far Nykaa has raised over $148 m from 13 rounds of funding. Their latest funding was raised from a secondary market round back in November 2020.

Nykaa is funded by 15 investors in total. Fidelity Management and Research Company and Alia Bhatt are the newest investors.

As investments, Nykaa acquired Earth Rhythm in April 2022, and they most recently acquired Little Black Book in August 2022.

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26 shares, 62 points
Ayan Mondal