1

ABOUT NYKAA
Founded in 2012, Nykaa is India’s leading multi-brand retailer of beauty, wellness
and fashion products

Idea Discovery
1 Inspired by the business model of Sephora and other
high-end beauty stores

Company Value
2 Nykaa women deserves nothing but the best and most
trustworthy beauty products

Presence

A New-Age
3 Started as an e-commerce platform and quickly
expanded to offline channel

SUCCESS STORY
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BUSINESS MODEL
Differentiators Online Channel Path

Purchase
F
Enriching Customer Experience by
User guides Directly from manufacturers

Storage
4 a
Follows Inventory model
Own warehouses

Shipping
Robust customer retention strategy From warehouses to customers
> h directly
 VALUE CHAIN ANALYSIS

Inbound Operations Outbound Marketing Service

logistics Logistics and Sales
Warehousing, Collecting Distribution of Focus on Content Tracking post-
materials and consumer data final products Marketing and sale usage
architecture to from Nykaa‘s to channel developing a data to meet
maintain database to partners and robust customer consumer
consumer build company‘s the buyers retention strategy needs better
database. new strategies
Procurement

Technological Development

Human Resource Management

Firm Infrastructure
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NYKAA’S TWO-SIDED MARKET ANALYSIS

PRICING
Context: Need to generate cross-side network effects
Implication on Nykaa Implication on sellers Implication on buyers

Difficulty in passing Deep discounting by Consumers do not find

down all price cuts to the competitors during major the product offerings at
consumer and sustaining occasions like Pink Friday is MRP attractive
customer usage of difficult to keep up with
platform

1 2 3
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NYKAA’S TWO-SIDED MARKET ANALYSIS

ASSISTED SELLING
Context: Need to generate cross-side network effects

Implication on Implication on Implication on buyers

Nykaa sellers Buyers get curated lists of
Positions the platform Sellers get insights on products as per preferences
as a guide for the customer preferences Tutorials and blogs by
consumer during occasions and influencers add to the user
seasons. experience

1 2 3
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PRODUCT ROADMAP
Nykaa has extended its product lines from beauty and wellness to fashion,
gadgets and tech accessories, essentials over the years

2012 2015 2016 2018 2019 2020

$68,147 $57,453 $25,100 $34,522 $15,200 $68,147

Revenue Revenue Revenue Revenue Revenue
Revenue
Beauty, cosmetic Launch of Foray into apparel Launch of Nykaa Consumer tech Expansion into
and wellness Nykaa’s private products with Man, men’s products such as home and travel
products beauty label Nykaa Fashion grooming store smart watch and care essentials due
fitness bands to COVID-19
.
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COMPANY PERFORMANCE
Nykaa’s business model has been quite successful in India, with the online retailer
registering a revenue growth of 78% in 2019

$180

Nykaa’s current market 1.2bn 37% $160

valuation
$140
Nykaa’s profit in year 2019 $308k 43% $120

$100

$80

$60
Beauty, wellness and fashion 1200
brands + 65% $40

Website visitors per $20

month in 2019 40M
86% $0
2016 2017 2018 2019

Year-on-year revenue in million of US$

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WHAT COULD THEY HAVE DONE BETTER?

Given the category they were competing in, i.e. beauty,

1 physical trial is a critical part of the purchase journey.

Hence, the decision to become an omnichannel retailer
by opening offline stores could’ve been taken earlier.

Nykaa could have entered the men's grooming business

2
quite before it actually did and gotten the first movers'
advantage in a very lucrative category, instead of
following in other players’ footsteps.

Nykaa focused on and still focuses a lot on the 18-35 age

3 group, which is relatively young. It could have adopted a

strategy so as to also harness the untapped segment of the
older female population.
. Nykaa’s initial pricing systems were manual & inventory

4 management was done in silos. Nykaa could have invested

in streamlining and improving these processes to be
equipped to deal with scale.
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THE ROADBLOCKS FACED

Nykaa faced a number of initial

hiccups trying to figure out the
tech part of the company, that is
1 4
the UI/UX, speed, etc which was at
the heart of the business.
A number of big players, such as
Amazon and Myntra are looking got
make an entry into the omnichannel
ecommerce model, especially in the
beauty landscape.

Nykaa had to achieve the right

2
It has also faced significant
balance by convincing both
drugstore and luxury brands to be
available at the same platform
5 competition in the online space
historically, with Urbantouch and
Purrple and even now, with Grofer’s
without brand dilution. backed “Orange Something”

It had to figure out the optimal Competitors such as Reliance are

amount of SKUs and categories at
par with global standards without
cluttering the website.
3 6 using cutting edge technology such
as AR and VR in their stores in
order to increase footfall.