The Success Story of Nykaa

Despite the fact that beauty is in the eyes of the beholder, the global beauty industry has never lost its allure. Along with its steady growth, the industry has amassed a dedicated consumer base that spans decades. What female doesn’t enjoy applying cosmetics? Cosmetics play an important role in all of our lives, from learning makeup tutorials to experimenting with different colours on free days, to adorning ourselves before a wedding or an event, or simply putting on a fast light application before work.

But we’ve come a long way from the days when consumers had to go to a cosmetic store in person. Why should brick-and-mortar stores be the sole option when there are now online cosmetics stores that allow clients to order things at any time and from anywhere.

Despite the fact that the Indian economy has hit unprecedented lows in recent months as a result of the COVID19 pandemic-induced shutdown, a handful of platforms have remained stable.

Nykaa is one of these e-commerce platforms for beauty and wellness products, and it has quickly become the preferred option for all cosmetic aficionados in India. Anyone who has even a passing interest in beauty and wellness products has probably heard of Nykaa at some time in their lives. This is an e-commerce site that specialises in cosmetics and beauty products. This platform, which was founded in 2012, has played a critical part in dispelling the idea that e-commerce and beauty retail do not do well in India.

Nykaa has recently become a household name across the country following the launch of its initial public offering (IPO) and the overwhelming response it received, propelling its founder Falguni Nayar into India’s elite group of self-made billionaire women, with her net worth rising to $6.5 billion following Nykaa’s record listing, according to Bloomberg Billionaires Index.

We will provide you an overview of Nykaa’s platform, its creators, its business model, its funding, its success story, its inception, and its growth through this blog.

Nykaa’s Background

Nykaa is an Indian cosmetics company that specialises in multi-beauty and personal care items. It started off as a solo e-commerce platform before expanding into a variety of retail locations across the country.

For both women and men, the company specialises in providing a broad variety of cosmetics, skincare, haircare, perfumes, bath & body, luxury, and wellness items. The portal, which claims to receive more than 1.5 million visitors per month from across India, permits adequately prepared and priced branded products.Nykaa now has three types of stores: Luxe, On Trend, and Kiosks. Nykaa’s Luxe stores contain more premium and luxury brands such as Estee Lauder, Dior, Huda Beauty, and M.A.C Cosmetics, among others, whereas Nykaa On Trend goods are limited to trending and fashionable names.

Aside from women’s beauty, the Nykaa Man website and app, as well as Nykaa Network, an online community for beauty enthusiasts, offer a variety of grooming products for males. Currently, the organisation is a staunch believer in focusing on the vertical market.

Founders of Nykaa

Falguni Nayar, an MBA graduate from IIM Ahmedabad, began working in investment banking at Kotak Mahindra immediately after graduation. She was promoted to Managing Director of the same bank division in 2005.

She worked for Kotak Mahindra for nearly 18 years, during which time she decided to branch out from banking and try her hand at other fields.

She saw the untapped potential of the online beauty industry. Since there was a scarcity of accessible online brands and things that people could trust and purchase with confidence at the time, she saw an opportunity for Nykaa.

She wanted to change Indian women’s perceptions about personal grooming because she was passionate about makeup and beauty products. Nykaa was founded in 2012 by her with the goal of creating something unique to her.

Nykaa’s Beginnings

Nykaa was founded in 2012, and it all started there. Falguni Nayar was looking for a promising business opportunity in India when she discovered an inconsistency in the beauty items market in India, which wasn’t up to par with the product’s scope in other countries such as France or Japan, despite high demand, owing to a lack of product availability in many places. As a result, she and her husband, Sanjay Nayar, founded Nykaa.

Business Model of Nykaa

Nykaa’s inventory methodology is essentially what distinguishes it from its competitors. The products are obtained through brands and distributors and then sold directly to consumers in this arrangement. This is in contrast to a marketplace model, in which third-party vendors offer the products. Nykaa will be able to keep a tighter grip on its items as a result of this, reducing the chances of forged things making their way onto the platform.

Nykaa’s Recent Growth

As reported by Your Story, recently in the month of July of this year, the platform stated that it’s in-house brand Nykaa Beauty has now penetrated into travel care as well as home necessities.

Nykaa’s platform has come a long way since its inception in 2012, and it currently plays an important part in the advancement of the beauty industry.

Nykaa currently has over 5 million monthly active users, 80 outlets across India, and over 500 brands and 130,000 products available via its website, app, and stores, according to CNBCTV18.

The company’s transformation from an online approach to an omnichannel retail model has been a critical factor in its growth. This transformation has had a significant impact on how the brand is currently perceived by its audience, as well as allowing the brand to reach out to a previously untapped demographic.

According to the Economic Times, the Nykaa Fashion label has recently expanded into the intimate apparel area with its Nykd brand. On October 22, 2021, Nykaa announced the acquisition of Dot & Key Wellness, a domestic skincare platform.

Customers are gravitating toward key categories like personal skin and hair care, according to Nykaa.

Nykaa’s Initial Public Offering

The platform’s initial public offering (IPO) was open for subscription from October 28 to November 1, with a price range of Rs 1,085-1,125 per share. Nykaa’s initial public offering (IPO) was oversubscribed by 81.78 times the 2.64 crore shares available.

Investors reacted positively to Nykaa’s initial public offering (IPO) when it was made available for subscription. The platform was launched on the BSE and NSE on November 10 and entered the 1 lakh crore market capitalization club when its stocks closed at 2,206.70, nearly double the issue price, valuing the beauty firm at about $14 billion.

Nykaa Investments is a company that invests in startups.

Nykaa’s parent firm, FSN E-Commerce Ventures Ltd, said on October 27th 2021 that it had raised roughly Rs 2,396 crore from anchor investors prior to its IPO.

Fidelity Management & Research Company has previously invested an undisclosed amount in the platform in late November 2020.

In early April of 2020, the platform received a new $13 million fundraising round from previous investor Steadview Capital, cementing its status as a unicorn.

Steadview Capital, TPG Growth, and Lighthouse Funds are among the platform’s top investors.

Conclusion

Nykaa has recently launched a number of new items, some of which have celebrity endorsements. In addition, they have included a number of new collections into their personal brand.

The platform has a number of big plans in the works to make a difference in the beauty and fashion business, and it’s been focusing on delivering high-quality items and services to users at reasonable prices. The platform has a lot of promise in terms of developing and gaining a more dominant position in the future.