Nykaa Case Study: Nykaa Business Model & How Nykaa Works?

Nykaa Business Model: The one women army – Nykaa success story

Nykaa is an Indian e-commerce company, founded by Falguni Nayar in 2012. The word Nykaa has been derived from the Sanskrit word ‘Nayaka’ which means ‘one in the spotlight’. It has a well-curated section of makeup, body and bath, fragrance, personal care, and much more. It also has its own line of products as Nykaa cosmetics and Nykaa naturals. Nykaa offers more than 1000 national and international brands. Presently Nykaa ships its products across India and Nepal and is planning to deliver to other international destinations too.

Nykaa Company Current Stats:

• Company Name: Nykaa
• Founder: Falguni Nayar
• Founded in: 2012
• The team:
  • Chief Business officer: Nihir Parikh
  • Chief Technology officer: Sanjay Suri
  • Chief Financial officer: Sachin Parikh
  • Chief Content officer: Madhavi Irani
  • Chief Marketing officer: Hitesh Malhotra
  • Chief supply chain officer: Manoj Jaiswal
• Headquarters: Mumbai, Maharashtra
• Industry: Beauty, wellness, healthcare
• Parent organisation: FSN E-Commerce Ventures Ltd.
• Website URL: www.nykaa.com

Where did it start from? Nykaa success story:

Let us know who Falguni Nayar is and how things start?

“We have taken the call to be an omnichannel retailer because beauty is a category where physical trial is crucial. We realised that if we want to sell premium products or even affordable products in categories like brush and foundations, colour matching is very important. So, we realised that in order to give our customers a really holistic beauty experience, we had to build a physical retail distribution.”

Falguni Nayar, Founder and CEO of Nykaa

Hailing from a Gujrati family and being a daughter of a businessman, Falguni Nayar always had entrepreneur ideas stuffed in her head. The inconsistencies in the beauty sector gave her the initial impetus. Further unavailability of products to many parts of the country gave her the idea of starting off.

Just after completing her MBA in finance from the premier institute of IIM Ahmedabad, she joined Kotak Mahindra Capital Company. She served the bank for 18 years and resigned in 2005 as the Managing Director of the company, so as to start her journey as an entrepreneur. She also has her name listed with various boards like Aviva Insurance, Dabur India, Tata Motors. She is a big source of inspiration to women of all ages. She sets an example for women across the globe saying that ‘age is just a number’ when it comes to entrepreneurship.

She earns many accolades for her dedicated work. She has been awarded the ‘Woman Ahead’ award at the Economic Times Startup Awards 2017, the ‘Businesswoman of the Year’ award in 2019, and many more.

Making a simple woman extraordinary in her ordinary world is the main vision of the brand.

Check out this video for insights:

Tagline and motto: ‘Your beauty, our passion’, ‘Beauty anytime, anywhere’.

Brand color: Red and pink, because the target audience of the company are women of all ages, the colors red and pink are believed to reflect a girl’s vibrancy and her flaws.

Nykaa Marketing Strategies:

Nykaa has emerged as one the largest e-commerce platforms for beauty and fashion products. This is because the website keeps a keen eye on digital marketing strategies. The brand focuses on customers from every niche. 

The company promotes its brand on various digital media platforms.

Social media marketing:

Influencer marketing plays a pivotal role in promoting the brand. Nykaa has 4 social media accounts which promote its own brand Nykaa Naturals, Nykaa Fashion, and also other domestic and international brands.

Youtube marketing:

Nykaa often runs YouTube ads offering consumable products to its targeted audience. It has a well-curated marketing strategy for YouTube and has engaging content and relevant ads.

Content marketing:

Nykaa has its own blog ‘Nykaa beauty book’ which provides blogs on beauty hacks, fashion apparel, video content, makeup tutorials, and much more.

Event marketing:

Nykaa has sponsored popular events like the Fashion Miss India event, numerous college fests like IIM Ahmedabad 2019, Mumbai College fest, Mood Indigo, and many more. Such events are an essential strategy to focus on targeted audiences, this ultimately promotes brand awareness.

“Falguni saw that there was a huge opportunity in the online space and considering all the different areas, she could invest in or start a company, she focused on beauty.”

Nihir Parikh, Chief Business Office, Nykaa

Nykaa business model and how Nykaa works:

Nykaa believes in an inventory-based business model. The company purchases the products directly from its manufacturers and keeps them in the designated storehouses also called warehouses. Then the products are sold in various Nykaa kiosks or online through its website www.nykaa.com. The company ensures the originality of the products keeping in mind the competitive prices.

Furthermore, Nykaa also has a revenue model for its business which provides product sales, banner ads, discounts, commissions, and misc. income.

Acquisitions by Nykaa:

Nykaa has acquired 3 companies to the current date, Mumbai-based 20Dresses in March 2021, Mumbai-based fashion brand Pipa Bella in April 2021, and Kolkata-based skincare brand Dot & Key in October 2021.

Journey of Nykaa:

In 2012, Nykaa started as an e-commerce portal providing a wide range of beauty and fashion products from all over the world. In 2015, Nykaa established its first physical store, then slowly opened up kiosks in various cities like Delhi, Mumbai, Kolkata, Hyderabad, and others. The brand then received recognition from across the globe after tie-ups with celebrities like Katrina Kaif, Gigi Hadid. Nykaa launched many campaigns on social media platforms like Instagram, YouTube. Further, it raised $110 million by funding from top investors like TVS Capital, TPS growth among others. In 2019, Nykaa launched its own brand Nykaa fashion and Nykaa beauty.

Nykaa clientele:

The maximum of Nykaa’s customers are women of the age group of 18-45. Nykaa has recently launched products for men too. The omnichannel presence of Nykaa includes ease of navigation app and website, a large number of kiosks, and dedicated offline stores which further increase the brand value in the market.

In the e-commerce platform, there are other competitors of Nykaa like Amazon, Myntra, and Flipkart among others. So Nykaa keeps updating its database so as to stand out as the best in the omnichannel market.

Initial public offering (IPO), profitability and revenue of Nykaa:

In 2021, Nykaa reported a total income of INR 1,777.8 cr. and INR 2,452.6 cr. in 2021 which is approximately a 38.10% increase.  Nykaa had a quick recovery from the ill effects of the coronavirus pandemic. Further, the company launched Nykd, an intimate wear brand, as soon as it began to come out from the pandemic effects in October 2020. Nykaa incorporated its IPO on October 28, 2021.

Some fast facts about Nykaa:

• 24-10-2012 marked the beginning of orders. It was the day of Dussehra when the first-ever order on Nykaa was placed for two products– L’Oréal Paris Colour Riche Intense Lipstick (Burning Rose) and Maybelline New York Express Finish Nail Colour (Pearly Pink).

• Maybelline Colossal Kajal is the top-selling product on Nykaa.

• Get ready for the upcoming sale. Keep your address and contact details ready while creating your account. When the sale arrives, it’s better to shop through the Nykaa app on mobile, because shopping through its website might charge you some more.

Conclusion:

“Beauty lies in the eyes of the beholder”. Nykaa as a global beauty industry can never lose its charm. The brand has already accumulated many loyal customers, over generations. Every girl loves to look presentable. This is the reason why girls are the target audience of beauty brands. Hence, Nykaa has launched a wide range of products including celebrity endorsements. Nykaa also focuses on providing quality products and services to users at affordable rates. The platform also promises to expand its avenue.

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