Nykaa’s Success Story: Falguni Nayar’s Beauty Brand | Business Model & Marketing strategies
Nykaa is an Indian company with a focus on multiple beauty and personal care products. It was first established as a sole e-commerce platform before later opening a number of retail locations across many major cities in the country.
The company specialises in offering a wide range of luxury and wellness products for both men and women, including bath and body, fragrances, skincare, haircare, and cosmetics. According to the platform, it receives more than 1.5 million brand-name products per month across India that are appropriately prepared and priced.
At the age of 50, Falguni Nayar made a brave decision to leave the stability and prospects for a bright future she had while serving as the MD of Kotak Mahindra Capital. She founded Nykaa, an online retailer of beauty products, in 2012. The growth of Nykaa has been nothing short of extraordinary. Nykaa is one of the very few profitable unicorns in India right now.
Nykaa: When did it all start?
The company’s founder, Falguni Nayar, got the idea after noticing some oddities in the market for cosmetics. India’s beauty and cosmetics market did not match the scope of the products as it did in other nations like France and Japan, despite the country experiencing significant market demand. The creation of Nykaa was prompted by the finding that the products were also unavailable in numerous locations across the nation.
In the year 2012, Falguni Nayar founded Nykaa. Before becoming an omnichannel strategy, it started as an online business.
Nykaa, a company with headquarters in Mumbai, is well-known for its wide selection of fashion and intimate apparel, as well as cosmetics and beauty products. It sells these items via its website, mobile app, and online storefronts. To transform everyday women into remarkable women in every way is one of the brand’s main objectives.
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Nykaa’s business strategy
Since the company buys the products directly from manufacturers or distributors and then offers them to the customers on its platform, its business model is primarily focused on inventory management.
Consider how it differs from marketplace models like those used by Amazon or Flipkart.
In contrast to Nykaa, the latter involves products being listed by independent sellers for customers to purchase. This assists Nykaa in protecting its customers from shady sellers and preserving the platform’s credibility.
In addition to this, having a physical presence, creating private labels across categories, and working exclusively with major brands in the beauty and fashion industries have all contributed to making it stand out in the crowded e-commerce market where customers are typically vendor-skeptical and searching for the best deal.
Additionally, the company has three types of offline stores: On Trend, Luxe, and Kiosks. Trendy and stylish brand merchandise is the focus of On Trend & Luxe. While Kiosk specialises in showcasing high-end and upscale brands like Dior, MAC, Huda Beauty, Estee Lauder, and many other illustrious names.
Furthermore, the business established the Nykaa Network online platform to communicate with beauty enthusiasts. They are able to connect with customers more easily and give them a special experience thanks to this.
A price range of Rs 1,085-1,125 per share was set for the platform’s initial public offering (IPO), which was open for subscription from October 28 to November 1. The 2.64 crore shares offered in the Nykaa IPO were subscribed 81.78 times.
Investors responded amazingly to Nykaa’s initial public offering once it became available for subscription. The platform was listed on the BSE and NSE on November 10 and, after its stocks ended trading at 2,206.70, nearly twice the offer price, valuing the beauty startup at close to $14 billion, it joined the club of companies with market capitalizations of $1 traillion.
The Marketing Strategy for Nykaa
The main component is to advertise brands and goods on various platforms, including websites and blog pages. To reach customers across the nation, it uses digital sales pitches for the products. The company also worked with Femina to organise Femina Miss India over the past few years in order to directly reach the right audience.
Its capacity to produce content that is highly relevant, interesting, and relatable for its audience is another factor in its success. The goal is to interact with beauty lovers via their YouTube and Instagram accounts. Through social media platforms, the company’s capacity to establish itself as a credible voice in beauty and, increasingly, fashion discussions.
Funding and Financials
After 8 years since its launch, Nykaa was ventured into a unicorn at a valuation of INR 9100 crores after raising INR 166 crores from Steadview Capital. In addition to this, just a few days after Katrina Kaif invested in the business in October, another well-known Bollywood actress, Alia Bhatt, did so as well through a different route. Lighthouse funds, TPG Growth, and other investors are also on its list.
The company claims that over the past eight years, its valuation has increased by a factor of more than 60. In terms of growth, the company’s revenue from operations for the fiscal year 2021 was Rs 2,440.89 crore, up 38.10% from the prior year. Since its inception, FY21 was the first year that was profitable. In the previous year, the average order value increased by about 35% to INR 1900.
Future Plan for Nykaa
The company wants to expand its offline operations. By 2024, it intends to expand its offline presence by opening 180 outlets across India.
Nykaa has recently introduced a number of new products that also feature celebrity endorsements. They have also added a number of new collections to their personal brand in addition to this.
One could say Nykaa has progressed into the Amazon of the cosmetics sector. Because of this platform, the myth that e-commerce and beauty retail don’t work well in India has been decisively disproven.
The platform is focused on escorting high-quality goods and services to users at reasonable prices and has a wide range of ambitious plans to change the face of the fashion and beauty industries. The platform has a lot of potential for growth and securing a more dominant position in the future. The brand markets not only in Tier 1 cities, but also to potential customers in Tier 2, 3, and 4 cities.
Who founded Nykaa?
Falguni Nayar was the brains behind the creation of Nykaa.
Why is Nykaa so well-known?
The largest lifestyle and fashion website in India, Nykaa, provides both men and women with a wide selection of skincare, haircare, perfumes, bath & body, personal care, and wellness products.
Who is Nykaa’s closest competition?
The following are some of Nykaa’s primary competitors: Purplle, FabAlley, Fabindia, LimeRoad, Craftsvilla
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