How Nykaa constructed the style e-commerce empire

Nykaa is India’s first start-up founded by a woman who competes with industry giants like Britannia, Godrej and IndiGo. Additionally, Nayar, who owns half of the company, has joined India’s top billionaires and is 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 Oct. 28th, Nov. 21st to Nov. 1st, 21st. The price range for the offering ranged between Rs 1085 – Rs 1125 per share; which is gigantic for an IPO. The fashion trade, which is up 89% in the Indian market, was already at Rs 2018 when the tender opened and rose to Rs. 2129. The exponential rise of Nykaa shares in the stock market on the very first day is a harbinger of success, waiting for the modem tycoon.

Have you ever wondered how Nykaa, which is still a young company, became a fashion destination in such a short period of time?

Nykaa doesn’t need an introduction, as it has already established itself under GenX and GenY and is also catching up with the upcoming GenZ. Within nine years, Bollywood stars like Jhanvi Kapoor, Alia Bhatt and Katrina Kaif as well as global supermodel Gigi Hadid became the face of the company. These beauties not only support the brand, but also invest heavily in the company. Alia Bhatt invested an undisclosed amount in Nykaa in 2020, making a whopping profit. Katrina Kaif also launched her Kay Beauty brand with Nykaa and is now an integral part of the brand. The fashion designer Masaba Gupta has also teamed up and launched her beauty collection exclusively on Nykaa. With thousands of online beauty and personal care brands, apps, and over 80 brick and mortar stores promoting and endorsing Nykaa, the company has grown to become the largest e-commerce for beauty and personal care products in the country.

The soul behind Nykaa’s outstanding success is founder and CEO Falguni Nayar. Falguni is an alumni of IIM, Ahmedabad, who was the managing director of Kotak Mahindra. She devoted herself to Kotak Mahindra and served for eighteen years before founding Nykaa in 2012.

What’s the success behind the brand’s growing popularity?

Control over the products

Nykaa eliminates the role of middlemen in the sales process and buys the products directly from brands and sells them to customers, maintaining a strong position on its goods.

Media management

One of Nykaa’s key factors is its strong digital content and media management policy. The ‘Nykaan Army’ is an internal 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.

Multidimensional presence

Not only is Nykaa driving the internet forward through its online presence, but it also replicates that same goodwill and trust through its offline market operations. Nykaa opened its first offline store in Delhi and now has 76 stores across the country.

Beauty specialists in store

Do you have no fashion sense or feel at sea looking at the wide range of products? Nykaa also has a solution for such customers. Interested customers can visit Nykaa’s nearest retail stores to experience new brands or to consult their beauty advisors. These in-house beauty consultants are a great help for beginners and people delving into the art of makeup. The beauty experts respond to customers’ questions and offer recommendations and solutions that are best for them.

Diversity for everyone

Nykaa offers vibrant products that range from beauty, health and grooming for all genders. Nykaa Stores offer drugstores as well as premium luxury brands of international renown such as Charlotte Tilbury, Estee Lauder, Dior, Huda Beauty etc. that we can only dream of. Nykaa has also created an online community for all fashionistas called Nykaa Network, India’s first interactive beauty forum where customers can ask questions and get advice.

Nykaa expands its business with the launch of ‘Nykaa Vertical Fashion’, a clothing store. It now has over 350 brands from India and around the world that offer women attractive and stylish clothing at reasonable prices. Nykaa has also partnered with A-list fashion designers such as Abraham & Thakore, Ritu Kumar and Anita Dongre to advance their business and also to satisfy the aspirations of an ambitious but financially tight middle class.

Nykaa’s business model structure

Nykaa is one of the few online companies that works on an inventory basis. Nykaa buys products direct from manufacturers and stores them in their warehouses in New Delhi, Mumbai and Bangalore. Nykaa products can be purchased online or in one of three physical store formats: Nykaa Luxe, Nykaa On Trend and Nykaa Kiosks. The existing business model enables significant profit margins as the company is responsible for product damage. The inventory approach also enables companies to ensure product authenticity and maintain competitive pricing.

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Nykaa, which is Sanskrit for Nayaka (someone who is in the spotlight), knows no boundaries. Falguni Nayar was voted # 20 on Fortune India’s list of Most Powerful Women in Business for 2020. Falguni attributes her years of training at Kotak to her ability to build a long-term, sustainable company with a strong focus on financial fundamentals. Adwaita, Nayar’s Ivy League-educated daughter, runs Nykaa Fashion Vertical while son Archit heads the beauty e-commerce business, despite separating her entrepreneurial ambitions from those of her husband, KKR India chairman Sanjay Nayar.

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