Nykaa Case Study: History, Valuation, Product, Services & Growth
Nykaa is a premier online beauty and wellness destination. Nykaa.Com offers a comprehensive selection of makeup, skincare, haircare, fragrances, bath and body, and luxury products for women and men at the best prices. All products are 100% authentic, sourced directly from the brands, or authorized distributors. With more than 350 brands and over 30,000 products to choose from, Nykaa.Com is the one-stop online destination for you to sit back, relax and shop at your convenience with free beauty advice and assistance over the phone, advice from beauty experts, latest beauty trends, product reviews, tutorials, and celebrity looks on the Beauty Book Blog, and fun Virtual Makeover tool.
HISTORY
Falguni Nayar, a former managing director at Kotak Mahindra Capital Company, founded Nykaa in 2012. It was launched as an eCommerce portal curating a range of beauty and wellness products. The brand name Nykaa is derived from the Sanskrit word nayaka, meaning ‘one in the spotlight’.
In 2015, the company expanded from online-only to an omnichannel model and began selling fashion products.
VALUATION
The valuation of the beauty and lifestyle retailer now pegged at $1.2 billion
Omnichannel beauty and lifestyle retailer, Nykaa, has raised ₹100 crores from existing investor Steadview Capital, as a primary investment. With this fundraise, Nykaa’s valuation is pegged at around $1.2 billion.
The Mumbai-based start-up has raised Rs 100 crore from private equity firm TPG Growth at a valuation of $724 million, company filings sourced from business intelligence platform Paper showed.
PRODUCT & SERVICES
Nykaa follows an inventory-based model with warehouses in Mumbai, New Delhi and Bangalore. In addition to its primary e-commerce business, it has an offline presence via 68 brick-and-mortar stores across the country. It claims to have over 3 lakh products across 1,500 brands.
It has two offline store formats called Nykaa Luxe and Nykaa On Trend. The Luxe format features Indian and international luxury beauty brands along with Nykaa Beauty, the in-house collection of beauty products. The latter format has products curated by category basis their popularity.
In 2015, Nykaa launched its collection of in-house beauty products. In March 2016, it introduced private labeled products in the bath and body care category.
GROWTH
Nykaa has quickly become the first and foremost choice when people tend to buy something cosmetic online.
This is because it is a one-stop solution to everything basic e=required by a woman. From feminine hygiene to luxury makeup it has everything.
The key to the right business is the ability of a brand to actually build up trust among its customers. With the introduction of new customers every day it is also important for a business to flourish when its customers come back. This trust by Nykaa has been developed by delivering 100 percent authentic products delivered to the customer on time. In order to achieve this kind of speed and authenticity, Nykaa has adopted an inventory model where they collect all the items at one place in an inventory and process the order according to the products available in the stock. This ensures that all the bulk orders are received at once instead of one item at a time, which is the case with Flipkart or Amazon. This is a fresh approach that served many benefits with it came to earning the trust of its reiterating customers.
As mentioned by me earlier, Nykaa is the Pandora of products ranging from budget-friendly category to high luxury brands. Nykaa has recently started collaborating and introducing Non-Indian brands like HUDA Beauty, Kiko Milano, Wet and Wild, etc which is an achievement in itself. This has made Nykaa the hoarding spot for all the makeup enthusiasts who can now get their hands on the products which were not available in India earlier.
With the amalgamation of all these techniques and business strategies, Nykaa created a huge customer base for itself. This served as an advantage when it introduced its own makeup and skincare line in the market. With the A-Class quality products, it won the hearts of many makeup users who now had the option of a budget-friendly makeup line with the exact quality of some of the renowned luxury brands in the world.
With all these achievements in its cap, Nykaa also promoted the careers of many YouTube beauty gurus thereby portraying their talent and promoting the career path to the fullest.
The discounts available on Nykaa have saved a lot of pence many times. If we compare the retail price to the price at which it is available on the website, It usually has a significant difference, hence increasing its customer base again.
In other words, Nykaa has proven to be one of the best startups. With its poised and slow and steady approach, it is about to become one of the best beauty and wellness giants in the market, in the coming years. It is the epitome of trust, wellness, and care for all its customers.
INTERNATIONAL OPERATIONS
Nykaa’s fashion e-commerce store has launched international shipping to 13 countries as the multi-brand business works to expand its distribution network. Nykaa now ships to 13 countries with three shipping-cost tiers, the business announced on January 11 on Facebook. The retailer’s entire multi-brand selection of Indian fashion brands and its own private labels are now available to international customers. This also serves to greatly widen the distribution network of the brands Nykaa carries including Zariin, The Jodi Life, The Pink Elephant, Global Desi, and FKSN By Narendra Kumar among many others.
Nykaa Fashion has also greatly expanded its private-label offerings recently. New private label brands including accessories label Mondano, occasion wear label Rsvp, and silver jewelry label Likha launched their first collections online at the end of 2019. The business also held a number of pop-up shopping events at the end of 2019 to engage customers offline.
