Nykaa is India’s first start-up founded by a woman who is competing with industry giants, such as Britannia, Godrej, and IndiGo. Additionally, Nayar, who owns half of the company, has joined the ranks of India’s top billionaires, becoming the first self-made woman to do so according to the Bloomberg Billionaires Index.
An Initial Public Offering (IPO) of Nykaa was up for purchase from 28 Oct 21 to 01 Nov 21. The price band for the offering was Rs 1085 – Rs 1125 per share; which is humongous for an IPO. The fashion commerce which rose by 89% in the Indian market, was already up at Rs 2018 when opened for bidding and rose as high as Rs. 2129. The exponential rise of Nykaa’s stocks in the share market on the very first day is a harbinger of the success awaiting the fashion magnate.
Have you ever wondered how Nykaa, which is still a fledgling company, could become a fashion destination in such a short span of time?
Nykaa needs no introduction as it has already established itself amongst GenX and GenY and is also catching up with the upcoming GenZ. Within a span of nine years, Bollywood celebrities such as Jhanvi Kapoor, Alia Bhatt, and Katrina Kaif, and Global supermodel Gigi Hadid have become the face of the firm. Not only are these beauties endorsing the brand, but they are also investing significantly in the firm. Alia Bhatt invested an undisclosed amount in Nykaa in 2020 and gained a whopping profit out of it. Similarly, Katrina Kaif launched her brand Kay Beauty with Nykaa and is now an integral part of the brand. Ace fashion designer Masaba Gupta too partnered and launched her beauty collection on Nykaa exclusively. With thousands of online beauty and personal care brands, apps, and over 80 brick-and-mortar stores promoting and endorsing Nykaa, the company has become the largest e-commerce for beauty and personal care products in the country.
The soul behind Nykaa’s eminent success is its founder and CEO, Falguni Nayar. Falguni is an IIM, Ahmedabad alumni who was the Managing Director with Kotak Mahindra. She dedicated herself to Kotak Mahindra, serving for eighteen years, before starting Nykaa in the year 2012.
What is the success behind the growing popularity of the brand?
Control over the Products
Nykaa eliminates the role of middlemen in the distribution process and directly buys the products from brands and sells it to customers thereby maintaining a stronghold on its merchandise.
One of Nykaa’s key enablers is its strong digital content and media management policy. The ‘Nykaan Army’ is an in-house team of twenty girls who manage Nykaa’s content on Social Media and YouTube channels. This adds a relatable, girl-next-door feel to the content. Today Nykaa has five million followers on social media.
Nykaa is not only making the internet spur by its online presence but also replicates the same goodwill and trust through its offline market stores. Nykaa opened its first offline store in Delhi and now has 76 stores across the country.
In-Store Beauty Specialists
Do not have a fashion sense or feel at sea looking at the wide range of products? Nykaa has a solution for such customers too. Interested customers can visit the nearest retail stores of Nykaa to experience new brands or consult their beauty advisors. These in-house beauty advisors offer great help to newbies and to people who are exploring the art of make-up. The beauty experts address customers’ queries and offer recommendations and solutions that are best suited for them.
Variety for All
Nykaa offers vivid products ranging from beauty, health essentials, grooming for all genders. Nykaa stores feature drugstores as well as premium, luxury brands of international imminence such as Charlotte Tilbury, Estee Lauder, Dior, Huda Beauty, etc that we could only dream of having access to. Nykaa has also created an online community for all the fashionistas called, Nykaa Network which is India’s first interactive beauty forum where customers can ask queries and receive advice.
Nykaa is expanding its business with the launch of ‘Nykaa Vertical Fashion’ which is a garment outlet. It now has over 350 brands from India and around the world providing women with attractive and stylish garments at reasonable prices. Nykaa has also collaborated with A-list fashion designers such as Abraham & Thakore, Ritu Kumar, and Anita Dongre to further their business and also to meet the aspirations of an ambitious but cash crunched middle class.
Business Model Structure of Nykaa
Nykaa is one of the few online companies that operate on an inventory basis. Nykaa buys products directly from manufacturers and stores them in their New Delhi, Mumbai, and Bangalore warehouses. Nykaa’s products can be purchased online or in one of its three physical store formats: Nykaa Luxe, Nykaa On Trend, and Nykaa Kiosks. The inventory business model allows for significant profit margins because the company is responsible for product damage. Using the inventory approach, businesses can also assure product authenticity and maintain competitive pricing.
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Nykaa, which is Sanskrit for Nayaka (one who is in the limelight), knows no bounds. Falguni Nayar was named No. 20 on Fortune India’s Most Powerful Women in Business list for the year 2020. Falguni attributes her years of training at Kotak to her ability to develop a long-term, sustainable firm with a strong focus on financial fundamentals. Adwaita, Nayar’s Ivy League-educated daughter, overlooks Nykaa fashion Vertical, while son Archit runs the beauty e-commerce business, despite the fact that she has kept her entrepreneurial aspirations separate from those of her husband, KKR India chairman Sanjay Nayar.
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Source: Digital Ready