A

Project Report on

Nykaa
By

Bhavika (S213F0006)
Deepak (S213F0009)
Himanshu Bhardwaj (S213F0017)
Kunal Anand (S213F0020)
Manasvi Bhagawat (S213F0022)
Saumya Sharma (S213F0038)
In partial fulfillment for award of the degree

of

Master of Business Administration (2021-23)

Under the supervision of

Dr. Kartik Dave

School of Business, Public Policy, and Social Entrepreneurship

Ambedkar University Delhi, Kashmere Gate, Delhi-11006
 Contents

Topics Page No.

Executive Summary i

Table of Contents: 1

Introduction 2

a. Industry Profile
b. Company Profile
c. Brand portfolio
d. Market Share
e. Growth Analysis
f. Customer’s Perception

Market Analysis

a. SWOT Analysis
b. Understanding 4Ps of Nykaa
c. Financial Analysis of Nykaa
d. Competitor’s Analysis
e. Inferences

Future Strategies

Suggestions and Recommendations

Research methodologies and references

Executive Summary
Introduction

Nykaa is an Indian e-commerce platform that sells beauty, health, and fashion products through
its websites, mobile apps, and 76 physical locations. It is a unicorn firm that was started in 2012
by Falguni Nayar and was valued at 8500 crore in 2020.

Nykaa sells products made in India as well as those made elsewhere in the world. The company
transitioned from an online-only model to an omnichannel model in 2015, and began offering
things other than beauty.

Nykaa launched Nykaa Pro in 2020, and Nykaa Fashion opened its first store in Delhi in
December 2020, with the goal of making the fashion company multichannel. It also began selling
more than 2000 brands and 200,000 products across its various channels.

Nykaa distributes products that are made both in India and around the world. The company
transitioned from an online-only to an omnichannel model in 2015, and began selling things
other than beauty. It will sell over 2,000 brands and 200,000 products across its channels by
2020.

We go out of our way to bring you only the best, from domestic brands, international brands,
luxury and prestige brands, premium brands, niche and cult brands, expert advice and videos,
and our understanding of the needs and preferences of consumers, to more than 72 Luxury and
On-Trend and Kiosk Stores, an ever-growing online community for beauty buffs, and a Beauty
Helpline. Nykaa offers a well-curated comprehensive range of over 2400 100% authentic brands.

Nykaa offers a well-curated complete variety of cosmetics, skincare, haircare, bath and body,
fragrance, grooming equipment, personal care, and health and wellness categories, with over
2400 100% authentic brands.
Nykaa, which is derived from the Sanskrit term 'Nayaka,' which means actress or one who is in
the spotlight, is all about celebrating the star in every woman and being her confidante and
companion as she begins on her own journey to uncover her unique identity and distinctive style.
Nykaa is sincerely dedicated about providing to your every beauty and wellness need, from the
greatest range of genuine beauty goods from across the world to beauty advice. After all, it's
Your Beauty that we're passionate about.
Industry Profile
Skin care, hair care, oral care, fragrances, and colour cosmetics are the main segments of the
Indian cosmetics industry. It presently has a market value of USD 6.5 billion and is predicted to
expand at a CAGR of 25% to USD 20 billion by 2025. In comparison, the worldwide cosmetics
market is expected to reach USD 450 billion by 2025, rising at a steady 4.3 percent CAGR. This
means that by 2025, India will account for 5% of the global cosmetics business and will be one
of the top five revenue-generating markets in the world.

Many worldwide brands, such as Mac Cosmetics, Avon, Estée Lauder, L'Oreal, and others,
began to develop footprints in India as the Indian clientele's spending power, need for improved
products, and increased image consciousness grew.

Factors fuelling growth in cosmetics industry are as:

 Cosmetics trial ups consumption

 Increasing channel penetration
 Adoption of natural products Changing retail landscape 
 Rising disposable income 
 Globalization impacting lifestyles
Company Profile

Startup Name Nykaa

Headquarters Mumbai, Maharashtra, India
Industry Cosmetics, Beauty, Online shopping
Founder Falguni Nayar
Founded 2012
Total Funding $341.9 mn (December 2021)
Revenue $324.77 Million (FY2021)
Valuation $1.2 Billion (2020)
Parent
FSN E-Commerce Ventures Ltd.
Organization
Website nykaa.com

Nykaa is a cosmetics retailer that sells products both online and in stores. Product reviews,
beauty how-to videos, expert-written articles, and even an e-beauty magazine are all available
through the company. Nykaa's customer service line is meant to assist consumers in selecting
products and services that are specific to their needs. The goods offered by this beauty and
wellness company are purchased directly from the manufacturers, ensuring authenticity. They
are also available for delivery!
Falguni Nayar, the company's founder, was inspired by the anomalies she saw in the cosmetic
product market. Despite significant market demand, India's beauty and cosmetics market did not
match the extent of the products as it did in other countries such as France and Japan.
Furthermore, the products were determined to be unavailable in a number of locations around the
country, prompting the development of Nykaa.

Nykaa, based in Mumbai, is known for its extensive range of beauty and cosmetics products, as
well as fashion and intimate wear, which it sells through its website, app, and online storefronts.

About the founder of the company

Nykaa was founded by Falguni Nayar, and it is now one of India's largest lifestyle and fashion
portals. Nayar graduated from IIM Ahmedabad with a master's degree in finance. Soon after
graduation, she joined Kotak Mahindra Capital Company, India's leading investment bank. In
2005, Nayar was named Managing Director of the bank's same division. She worked for the bank
for 18 years before resigning to pursue her business goal of Nykaa.com full-time. Falguni has
been the recipient of tons of accolades throughout her career including the FICCI Ladies
Organization (FLO) award for the top woman achiever in the field of banking and the Business
Today award, which hailed her as one of the top 25 women in business.
“Retail is all about detail” is one of the most popular mantras that Falguni Nayar lives by and is
often heard propagating the same.

The Mission and Vision of Nykaa

Nykaa's mission is founded on three key principles: curation, information, and personalization.
The organisation is dedicated to providing the greatest service to its customers in order to assist
them in making the best decision for their holistic beauty needs. "Inspiring both men and women
of India to make fashion and lifestyle choices that best suit them," Nykaa's mission statement
states.

Nykaa - Slogan, Tagline, and Logo

The name 'Nykaa' comes from the Sanskrit word 'nayaka,' which means 'one in the spotlight.'

'Your Beauty, Our Passion' is the company's tagline. Nykaa and Peanut Butter formed a
partnership, which resulted in the creation of a new slogan, 'Beauty Anytime, Anywhere.'

Because the brand is aimed at women, the colour was carefully picked. Red and pink would
ideally portray the imperfections and liveliness of a modern female.
Nykaa’s Brand Portfolio
Nykaa has a series of in-house brands within beauty and fashion. Some of the popular ones
include:

 Nykaa House of Brands –

 Nykaa Naturals
 Nykaa Cosmetics
 Kay Beauty

 Nykaa Fashion –
 Nykaa by Nykaa
 20 Dresses
 RSVP
 Mondano
 Likha
 Pipa Bella

Nykaa introduced its in-house cosmetic products, Nykaa Cosmetics, in 2015, and then expanded
it to include Eyes, Nails, Face, and Lips. Nykaa Naturals is a brand that sells skincare and
personal care goods. The brand released its Wanderlust Bath & Body collection in early 2019,
and later that year, Masaba by Nykaa, a beauty line with the legendary designer Masaba Gupta.

We go out of our way to bring you only the best, from domestic brands, international brands,
luxury and prestige brands, premium brands, niche and cult brands, expert advice and videos,
and our understanding of consumer needs and preferences, to more than 72 Luxe and On-Trend
and Kiosk Stores, an ever-growing online community for beauty buffs, and a Beauty Helpline.
Nykaa offers a well-curated complete variety of cosmetics, skincare, haircare, bath and body,
fragrance, grooming equipment, personal care, and health and wellness categories, with over
2400 100% authentic brands.

Nykaa has built a reputation for trust and authenticity since its inception, and it seeks to curate
products that are both affordable and of high quality. Nykaa Fashion's product line was
previously bolstered by the acquisition of the successful brand Twenty Dresses. Nykaa Fashion
also hopes to use this acquisition to further organise the congested jewellery sector in order to
achieve product excellence and quality assurance. Nykaa Fashion's offline growth this year will
include Pipa Bella as well as other consumer brands.
Market Share

Nykaa has a market share of more than 18.5 percent in the online beauty and personal care arena.
By 2025, the online beauty and personal care business in India is expected to reach $5.4 billion.
Other companies in this industry include Purplle, SUGAR Cosmetics, Pureplay, Mamaearth, and
MyGlamm.
"Nykaa should continue to aggressively expand its retail store network as it assists the company
in organic customer acquisition, providing touch and feel experience to online buyers, and
tapping into consumers' wallet share that was spent in-person during travel/outings," according to
the brokerage firm. Nykaa operates in the e-commerce category, where heavyweights like
Amazon (in India) and Flipkart have struggled to break even for decades, according to the
research and brokerage business.

Nykaa operates in the e-commerce category, where behemoths like Amazon (India) and Flipkart
have struggled to break even despite decades of operation and the ability to amortise fixed costs
across numerous categories, according to the research and brokerage business. This is due to
their incapacity to build customer loyalty and their reliance on discounts. "By comparison,
Nykaa management had the strategic vision to address important consumer pain points and retain
users on the platform even when they weren't purchasing and were simply reading or viewing
content." With a 40% market share, Nykaa has been the key driver of increased online
penetration in the BPC industry in India." With a 40% market share, Nykaa has been the key
driver of increased online penetration in the BPC industry in India."
Growth Analysis
Nykaa has quickly established itself as the easy platform for consumers looking to buy cosmetics
online. It has everything from feminine hygiene to high-end cosmetics. An inventory model in
which all of the items in an inventory are collected in one location and orders are processed
according to the products in stock. Nykaa is positioned to become one of the top beauty and
wellness companies in the industry in the next years, thanks to its poised and steady approach. It
embodies trust, wellbeing, and customer care for all of its clients. It earned the hearts of many
makeup lovers with its A-Class quality items.

 Nykaa has only lately begun collaborating with and presenting non-Indian brands such as
HUDA Beauty, Kiko Milano, Wet and Wild, and others, which is a significant
accomplishment in and of itself. This has turned Nykaa into a haven for cosmetic junkies
who can now get their hands on goods that were previously unavailable in India. Nykaa
was able to build a large consumer base by using all of these approaches and business
strategies. When it came time to launch its own beauty and skincare brand, also it gave it
an advantage.
 Consumers have shifted their attention to the essential categories, according to the
unicorn cosmetics and beauty products brand. Nykaa was able to quickly recover from
the impacts of the coronavirus pandemic. As soon as the corporation was able to shake
off the effects of the epidemic, it created Nykd, an intimate wear brand.
Nykaa's initial public offering (IPO) was a huge success, with the company's market
capitalization exceeding Rs 1 lakh crore. At the end of the IPO round on November 1, 2021, the
company's shares were 81.78 times oversubscribed. Nykaa's market capitalization jumped to
about $13 billion in its first day on the Indian stock exchange. Nykaa's initial public offering
(IPO) was a huge success, with the company's market capitalization exceeding Rs 1 lakh crore.
At the end of the IPO round on November 1, 2021, the company's shares were 81.78 times
oversubscribed.Nykaa'smarket capitalization jumped to about $13 billion in its first day on the
Indian stock exchange.
Customer’s Perception
Strategies to make a brand value and it’s image in a Consumers viewpoint.

 While margins are high in the beauty and fashion retail industries, profitability is low.
Nykaa has created its own loop, which is comprised of high margins, high profits, and
minimal operating expenses. A shop's operating expenses are very high, but when you go
to e-commerce, your operating expenses are relatively cheap. The corporation is aware of
the products that the customer want to purchase as well as those that he does not. Nykaa's
(COCA) Cost of Customer Acquisition was decreased from Rs. 1000 to Rs. 200 as a
result of this. They first identified the high demand which is increasing day by day but
the problem in the market is duplicacy.

 They used the Inventory Model to ensure that no low-quality products were delivered. In
terms of branding, marketing, and customer service, they had to maintain a 360-degree
strategy. They worked with a lot of YouTube influencers and even had their own
YouTube channel where they taught people how to use new items. They have over 70
physical locations, including NykaaLuxe, which specialises in high-end goods. They
were able to capture all of those customers who choose chemical-free products and who
require beauty products but not chemicals with their fifth net. In addition, they had
discovered something in the fashion and cosmetics industry: people today require
chemical-free products.

 Reaching out to customers is an important component of Nykaa’s customer retention

strategy. Nykaa TV, Nykaa’s YouTube channel, has over 5 lakh followers and 121
million video views. Every month, over 45 videos featuring 80 industry professionals and
influencers are produced and aired at all Nykaa offline stores. The average number of
views per video for Hindi tutorial videos aimed at Tier 2 and Tier 3 is over 200,000.
Differentiated material based on specialised appeals to a large number of people. Nykaa’s
Infomercials, meanwhile, target regional audiences in Tier 2 and Tier 3 cities who are just
getting started on their beauty journeys with differentiated content and step-by-step
product demonstrations.

 They invested in ERP systems to integrate them (Enterprise resource planning refers to a
form of software that firms use to manage day-to-day company activities such as
accounting, procurement, project management, risk management, and compliance, as
well as supply chain operations). They were able to handle in real time thanks to ERP. As
a result, they were able to implement the Omni Channel with ease. The term "omni
channel" refers to encircling a customer from all sides in order to prevent him from
eluding you. They could now see how much goods cost, how much salaries cost, and how
much raw materials cost, as well as track the performance of offline retailers.
 The cosmetic retail market in India is growing at about a 16% CAGR and is expected to
reach $20 billion by the year 2025. The majority of growth is shown to take place in the
online retail sector as it has been found to be much more convenient than the other
modes. Nykaa is the leading brands for multi-brand products in the Indian Market. When
compared to its competitors, Nykaa has a particular competitive advantage. It operates at
a significantly reduced cost and fetches a reasonable premium. Nykaa is ranked 33rd in
the country in the category of lifestyle, Beauty and Cosmetic.
SWOT Analysis of Nykaa
Strengths:-
1) Strong social media interaction: Through regular online campaigns, beauty contests, and
other promotions, Nykaa has been able to engage a large number of social media users as
potential clients. Nykaa is able to effortlessly contact new clients with such a large
population of social media involvement.
2) Product variety: Nykaa has done an excellent job of introducing a diverse product
selection in both online and offline stores to keep customers from abandoning the brand
due to a lack of inventory.
3) Affordability: Nykaa places a premium on product affordability for all segments of the
market, as product pricing has a direct impact on demand.
4) Vendors with cheaper prices: Access to suppliers with lower prices for raw materials, By
reinvesting the money saved in other activities, the business can increase its total
efficiency.
5) Geographical presence: a company's physical presence in various places can be one of its
biggest assets. It determines the company's reach in the target market and ensures easy
access.

Weaknesses :-
1) Research and development: Due to a lack of market knowledge, a company's
performance may be harmed if it spends less on research and development.
2) Marketing budget: A business's capacity to develop its customer base and drive repeat
purchases is harmed by a lack of funding for marketing and advertising efforts.
3) Environmentalists have chastised the corporation for its inadequate waste management
and inability to integrate sustainability into its operations.
4) Exorbitant shipping fees: Nykaa promises free delivery on orders of 700 rupees or more,
which excludes some clients.
5) Customer satisfaction: Nykaa has not been able to efficiently resolve customer
complaints, which has become a severe problem for the company.

Opportunities for Nykaa :-

1. With the rise of e-commerce opportunities, people are enticed to buy the best in quality
beauty products from this online provider because it saves them time (they don't have to
go out and spend time choosing) and money (they don't have to spend money on travel),
and it builds more loyal customers as offline buyers.
2. Changing client demands, tastes, and preferences might be an opportunity if a company
has solid market information, because customer preferences change over time. The
creation of new technologies to make the production and delivery of goods and services
 more convenient in company operations. Advanced technological integration can save
costs, increase productivity, and speed up the introduction of new goods.
3. Social media marketing as a trend might be a fantastic chance for Nykaa if it can
establish a strong online presence on various social networking sites, because people
nowadays follow social media trends and there is a lot of activity on these platforms.
4. The organisation can enter the international market, target a geographically dispersed
consumer base, and boost profitability because of the reducing boundaries and expanding
global interconnection.
5. As customers' lifestyles and expectations improve, they spend more money on consumer
products and services, and there are more possibilities to urge them to do so.

Threats for Nykaa :-

1. Nykaa's profitability is harmed as a result of the decrease in client spending. If the

products/services offered are not ecologically friendly, the expanding attitudes towards
environmental sustainability constitute a significant threat. They receive unfavourable
press and criticism from environmentalists, and their brand image suffers as a result in a
competitive market.
2. Threats of New Entrants when Costs are Reduced and Efficiencies are Improved Nykaa's
competitors, both domestic and international, can take advantage of Nykaa's low cost of
contacting customers through social media and e-commerce.
3. Industry culture of sticky prices: Because Nykaa operates in an industry with a culture of
sticky prices, it may be difficult for the company to raise prices to match its premium
prices develops.
4. The squeeze on the middle class in both the developed and developing worlds is one of
the most serious threats to not only globalisation but also capitalism. Nykaa has seen the
effects firsthand, with decreasing demand for its products from middle-class customers in
the US and EU markets.
5. Globalisation forces organisations to cross national borders and deal with cultural
variety, which can backfire if the organisation lacks cultural intelligence.
Understanding 4Ps of Nykaa
Nykaa is thriving in the beauty industry thanks to its effective marketing strategy. Nykaa's
marketing strategy revolves around digital marketing. Digital marketing is Nykaa's primary
method of gaining customers. With its marketing efforts, the company is not only addressing
clients in tier 1 cities, but also in tier 2, tier 3, and tier 4 cities.

Products – 4Ps in Nykaa.com: Case of a Beauty Obsession

In marketing strategy, a product is not regarded a real thing, but rather a type of value to be
supplied to customers. Installation and repair services, sales staff priming and pre-purchase
education, brand name assurance, point of sale equity, convenience of availability, financing
plans to purchase the products, physical product, word of mouth references, and other factors can
all benefit Adwaita Nykaa.com customers.Product Management Stages in the Marketing
Process:-

1. Opportunity Identification - Market research and consumer research identify

client wants, which Adwaita Nykaa.com can address with its present and acquired
resources.

2. Design and Testing - Market research and consumer research identify client
wants, which Adwaita Nykaa.com can address with its existing and acquired
resources.

3. Nykaa.com Adwaita Pricing, communication strategy, distribution channel

management, and setting up infrastructure to provide post-purchase services are
all part of the product launch process.

4. Adwaita Nykaa.com Product Life Cycle Management - After the product is

introduced, the company must manage the product's life cycle through its several
stages, which include introduction, growth, cash cow stage, and decline.

Product Line Planning Decision

Adwaita Nykaa.com has three important product line planning considerations to make:

1. Product Line Breadth Decision

 Adwaita Nykaa.com may develop into adjacent areas where clients require
complimentary items from other companies to get the most value out of the products
because it has a strong position in its market.Product Line Length of Adwaita
Nykaa.com When deciding on a product line, the complexity of existing products and
services must be weighed against the market's potential niche space. Adwaita Nykaa.com
should, in my opinion, keep the current product mix rather than expanding the product
line with new products.
1. Product Line Depth of Adwaita Nykaa.com
These are options for the number of different Stock Keeping Units (SKUs) that a product should
have. Despite the fact that the hardware and software are identical, Apple, for example, sells its
iPhone in a number of colours.

Pricing

Because price is such a complicated process, we will only address a small amount of what goes
into pricing decisions. The other three Ps of marketing, product, location, and promotion, all
have a significant impact on pricing. The perceived value is the greatest price a consumer is
willing to pay for Adwaita Nykaa.com goods in the given competitive environment..

1. Cost Base Pricing –

Adwaita Nykaa.com can use a cost-based pricing model to determine how much it costs
to create a product and then apply a markup based on how much profit it wants to
generate. In a highly competitive market with changing pricing, the method may not be
practicable. In comparison to independent cab companies that aren't backed by private
equity and don't have a long-term vision, Uber, which is losing billions, can offer lower
prices and keep them.
2. Value Base Pricing –
Value base pricing is a pricing strategy that is based on the customer's perception of the
product's worth. It equips students with the capacity to evaluate both real and intangible
benefits, as well as a thorough understanding of demand elasticity and competitive
limitations.
3. .Competition Based Pricing –
Market competitiveness determines the price strategy. The goal of AdwaitaNykaa.com under this
strategy is to match competitor prices while focusing on cutting operational expenses to increase
profitability.
Place
Adwaita Nykaa.com distributes its products to customers through a distribution channel, which is
a series of procedures. Product quality assurance, providing an extensive product assortment
using product line – breadth, length, and depth, reducing purchase lot size, allowing individual
customers to buy products, providing customers with product information, after-sales services,
and installation services, making products easily available to end consumers, and allowing
product customization are some of the functions of distribution and marketing channels. There
are two key deciding criteria for Channel of Distribution –

1. Channel Design -
a. Direct Distribution System - Adwaita Nykaa.com has established its own direct
distribution channel to reach out to clients directly. It might be as simple as opening its
own storefronts or simply selling all of its products online.

b. Indirect Distribution System – Wholesalers, retailers, logistics businesses, and

distribution agencies are among the channel partners of Adwaita Nykaa.com.

c. Hybrid Distribution System - Adwaita Nykaa.com should create a hybrid approach in

which Adwaita Nykaa.com manages the core aspects of the distribution system while
delegating secondary duties such as logistics, warehousing, and retail management to
various channel partners.

2. Channel Management –
a. Customer willingness to look for and travel to buy a product - If a company's customer
willingness is high, it has a strong brand recognition and loyalty. Adwaita Nykaa.com can
create channel policies that are beneficial to channel partners.
b. Per Unit Cost of Stocking – Adwaita Nykaa.com requires channel partners who can pool
resources if the cost is excessive. Otherwise, Adwaita Nykaa.com can run its own
activities.
c. Market Development Requirement - Market development is one of the most important
roles of a channel. If Adwaita Nykaa.com needs to increase its market development
activities, channel partners with the know-how and expertise to expand into other markets
should be included.
Promotion

The Marketing Mix, or Integrated Marketing Communication Strategy, of AdwaitaNykaa.com is

a collection of several advertising strategies. Advertising, Sales Promotion, Personal Selling,
Public Relations, and Direct Marketing are the five types of marketing.
Adwaita Nykaa.com can persuade customers using all five communication tools: the presence of
the goods, the product's pricing, the product's distinguishing attributes, the locations where
people can buy the items, and finally, how consumers can use the products or services
efficiently..
Financial Status of Nykaa
We have prepared a table for to depict the financial status of Nykaa.

Elements
Operating Income INR 500 crore
EBITDA margin of 124.28 percent
35.08 percent net worth
-48.60 Debt/Equity Ratio
N/A Return on Equity
68.91 percent of total assets
Fixed assets account for 64.18 percent of total assets
Current assets account for 71.84 percent of total assets
Current Liabilities are 91.08 percent of total assets.
Trade receivables account for 48.62 percent of total
revenue.
Trade payables 100.07 percent
0.91 Current Ratio
Nykaa's overall revenue in FY21 was INR 2,452.6 crore, up 38.10 percent from INR 1777.8
crore in FY20. The sale of products accounts for over 90% of the omnichannel retailer's revenue.
Despite only a slight increase in the number of transacting customers and total order volumes,
the company recorded a 35% increase in average order volume. Nykaa, an online beauty
aggregator, made a profit of INR 61.9 crore in FY21, indicating that the beauty and fashion
omnichannel store is on track for an IPO later this year. Nykaa's overall revenue for the fiscal
year ending March 31, 2021 was INR 2,452.6 crore, up 38.10 percent from INR 1,777.8 crore in
FY20. This is the company's first profitable year after a loss of INR 16 crore in the previous
year.Nykaa's overall revenue for the fiscal year ending March 31, 2021 was INR 2,452.6 crore,
up 38.10 percent from INR 1,777.8 crore in FY20. This is the company's first profitable year,
after losses of INR 16 crore and INR 24 crore in FY20 and FY19, respectively.

Increased online shopping by customers in the beauty and personal care vertical, as well as the
launch of numerous product categories and brands as part of the firm's fashion offering, all
contributed to revenue growth in 2021, according to the company.

According to the business's draught red herring proposal (DRHP) filed with the Securities and
Exchanges Board of India, the company is now trying to raise INR 525 crore through new equity
issuance (SEBI). Nykaa plans to raise a total of INR 4,000 crore, according to media sources.

Nykaa’s Order Volumes, Ticket Size Flourish In 2021

A closer examination of Nykaa's financial performance in FY21 reveals that the company's
expansion has been fueled by increasing average ticket sizes or purchase values from a portion of
its existing customers. The sale of products on the marketplace accounts for over 90% of the
platform's revenue.

Nykaa's yearly unique transaction consumers increased slightly from 5.3 million in FY20 to 5.6
million in FY21, and order volume increased by only 0.1 million year on year, but its average
order value (AOV) increased by 35% from INR 1,448 to INR 1,963 during this time.

In comparison to FY19, the platform saw a 51 percent rise in transacting consumers and a 35
percent increase in order volume in FY20, despite AOV remaining unchanged. This suggests that
additional clients may have had no impact on the platform's sales.

The remaining 10% of Nykaa's revenue comes from selling marketing services to marketplace
businesses. During the previous fiscal year, this component increased by roughly 38%, and by
33% between FY19 and FY20.

The remaining 10% of Nykaa's revenue comes from selling marketing services to marketplace
businesses. During the previous fiscal year, this component increased by roughly 38%, and by

33% between FY19 and FY20.

According to Nykaa's DRHP, cost of goods sold climbed by 46.70 percent to INR 1,487.8 Cr in
FY21 from INR 1,014.2 Cr in FY20, owing to an increase in sales of products purchased from
brands or their distributors and made under its own names.

Due to increasing freight and packing costs, Nykaa's portion of other expenses increased by 6.57
percent to INR 507.9 in FY21 compared to FY20. During the fiscal year, marketing expenses
were down 19 percent from the previous year.

During the fiscal year, when marketing budgets were cut due to the pandemic, the company had
a 3 lakh increase in transacting consumers. In contrast, its marketing spend in FY20 was 34%
more than in FY19, yet it attracted over 2 million transacting users, demonstrating how deeply
retail marketplaces depend on advertising for reach.
 Competitor’s Analysis of Nykaa

Sl. No Name Year of Founde Employ Fundin Revenue

of the Establis r ees g (2020) (2020)
Organiz hment
ation
1 Nykaa 2012 Falguni 1700 $116.3 $354.9
Nayar M M
2 Purple.c 2011 Manish 650 $93.1 M $11.5 M
om Taneja
3 Plum 2018 Shankar 85 $14.9 M $27.1 M
Prasad
4 Myglam 2015 DarpanS 1000 $105.8 $64.4 M
m anghvi M
5 Scential 2017 Mahesh 110 $10 M $<1M
s Bhupath
i
6 FabAlle 2012 Shivani 900 $12.4 M $10 M
y Poddar
7 Fabindia 1960 Vineysi 842 $14.6 M $65 M
ngh
8 Limeroa 2012 SuchiM 600 $51.5 M $21.9 M
d.com ukerjee
9 Craftsvil 2011 Manoj 100 $58.5 M $9.2 M
la Gupta
10 YepMe 2008 Vivek 180 $120.9 $17.2M
Gaur M
Products offered by Nykaa’s Competitors:
Sl. No Company Industry Products and
Services
1 Nykaa E-commerce Beauty, wellness,
Cosmetics Retail and fashion
products
2 Purple.com Beauty Cosmetics Makeup, skin, hair,
E-Commerce fragrance
3 Palm Cosmetics Skincare, body care,
hair care and
makeup
4 Myglamm Cosmetics Bath, Body,
Sanitizing care,
skincare, face, eyes,
lips, nails
5 Scentials Retail Beauty, Cosmetic,
Personal Care
6 FabAlley Fashion and apparel Clothing, footwear,
handbags, and
accessories
7 Fabindia Textiles, Home Retailing garments,
furnishings, furnishings, fabrics
handloom apparel, and ethnic products
ornaments
8 Limeroad.com E-Commerce Clothing and
accessories for
women, men and
kids.
9 Craftsvilla Internet Shoes, accessories,
beauty, apparel, and
home accessories
10 YepMe Online shops & Garments and
Online Services accessories
Future Strategy
Marketing Strategy

The company "Nykaa" wants to grow its offline presence. It plans to open 180
outlets across India by 2024 to enhance its offline presence. It has been successful
to date as a result of the approach they employ, and they will continue to employ
the same method in the future.

Nykaa has established itself as one of the most capable companies in the beauty
and fashion field because to its solid marketing approach, which is centred on
digital marketing. The brand not only concentrates on Tier 1 cities, but also pitches
all potential clients in Tier 2, 3, and 4 cities.

 Social Media Marketing

Nykaa has four social media profiles for marketing its in-house brand My Nykaa:
Nykaa beauty for e-commerce platform promotion, Nykaa fashion for e-commerce
apparel store promotion, and Nykaa beauty book for e-commerce beauty and
makeup advice.

The company maintains accounts on a variety of social media sites to market the
brand extensively. The brand also uses its social media accounts to share the
material made by its influencers. As a result, influencer marketing plays an
important role in Nykaa's promotion.

 Youtube Marketing
Nykaa has a comprehensive YouTube marketing strategy in place. The firm does
not use its Youtube channel to sell products, instead focused on providing
consumable content to its target customers, such as beauty, personal care tips,
cosmetic hacks, and more.

In addition, the firm uses Youtube advertisements to target its clients from time to
time. As a result, Nykaa's Youtube marketing is fueled by targeted adverts and
high-quality content that keeps the audience engaged.

 Content Marketing
Nykaa is heavily reliant on content marketing. The audience is provided with a
range of digestible material by the D2C beauty and fashion marketplace, which
helps them convert into buyers.

Nykaa has its own blog, "Nykaa beauty book," where it publishes beauty,
cosmetics, and personal care blogs. Additionally, the brand produces video content
such as cosmetic tutorials, DIYs, and more.

 Event Marketing
Nykaa uses event marketing as another significant marketing approach to reach out
to target customers at the appropriate time and in the right location.

Nykaa has sponsored the popular Femina Miss India event, one of India's largest
beauty pageants, on several occasions and is still associated with the same event.

Nykaa also sponsors a number of college fests and events, including the Red Brick
Summit at IIM Ahmedabad in 2019 and the Mood Indigo college fest in Mumbai.

Inventory Strategy

Nykaa's business plan is based on a series of strategic business operations that

culminate in the delivery of the final order to the consumer as a product. The
inventory model, exhibiting inventory as selling products, and order fulfillment are
the three essential features of its business concept.

 Nykaa operates on both online and offline channels, and in order to do so

effectively, they maintain proper inventory in their warehouse. Because it
eliminates the need for other vendors to fulfil the purchase, the inventory
model is extremely successful at delivering things to customers faster. It also
ensures quality by obtaining the goods straight from a certain brand without
the use of intermediaries. Displaying products in online and offline stores:
Nykaa sells beauty and wellness products online and has a number of offline
outlets throughout the country to service its customers. The product is
purchased directly from local stores by the clients. The product range
presented in an online business is determined by the inventory on hand. As a
result, the corporation must keep track of supply availability and demand at
all times.
 Order fulfilment: Nykaa ensures that orders will be delivered within 1 to 4
days of placement. Nykaa eventually makes money from the savings they
get when they buy direct brand products. Because they buy in quantity, they
 benefit from a high product margin, while the end customer benefits from
dependability, quality, and a reasonable price. Apart from these strategies
the brand also follows the word of mouth technique,

In one of his interviews, Nykaa's CMO, Hitesh Malhotra, mentioned that the client
of Nykaa is the brand ambassador who actively promotes the company through
word of mouth. Customers have an important role in the brand's success.
Suggestions and Recommendations
1. Nykaa caters mostly to the 22–35 age bracket, but expanding to other age groups could help
the brand expand even further.

2. It can target the lower-middle-income class by supplying products at lower costs and in fewer
quantities so that they can afford them, because delivering branded products at reasonable prices
assures that the upper-middle-income class is reached.

3. Nykaa must focus on exploiting its strengths and opportunities to overcome its constraints and
obstacles.

4. As a female entrepreneur, you should encourage other women to start enterprises by giving a
platform on the Nykaa website for them to sell their items.

5. Some shoppers are sceptical of online purchases when it comes to product quality. Nykaa
must use effective and engaging marketing to communicate the product's distinctiveness. They
will be able to readily meet the competition as a result of this.

6.It focuses on urban areas rather than rural areas, but by extending into rural areas, they can get
more pleased customers and increase the standard of living for the rural people.

7. It has to take more promotional actions to increase awareness of items in the men's sector, as
most people believe Nykaa's company is only for women.
 Research Methodology and References
2. Philip Kotler’s Ideas
3. Euromonitor
4. google.com
5. wikipedia.com
6. podcasts and interviews
7. Nykaa’s Website