JOURNEY OF THE BRAND CALLED NYKAA
A dreamer is always termed crazy until the time he or she turns it into a reality. Falguni Nayar, the founder of Nykaa, one of India’s biggest online fashion and life portals, had been living an ideal life. Nykaa is an Indian e-commerce company founded by Falguni Nayar in 2012 and headquartered in Mumbai. It sells beauty, wellness, and fashion products across websites, mobile apps, and 76 offline stores. As of 2020, it was valued at ₹85 billion (US$ 1.1 billion) making it the first unicorn startup headed by an Indian woman. Nykaa has also added fashion to its forte to woo its customers further. Known for its quality and authenticity, Nykaa does all it takes to ensure a positive customer pulse, using the fact to its benefit- ‘Customer love self-service over having to wait for an agent.’; Nykaa decided to automate the parts of customer support that was automatable, thus finding more time to focus on other important aspects of customer experience. Nayar has created a capital-efficient and asset-light business model. Before its $ 720 million IPO, Nykaa had raised only $100 million in equity. Nykaa has recently become the buzzword uttered across the nation after the launch of its IPO and the massive response it received which in turn has boosted its founder Falguni Nayar to emerge as a part of India’s exclusive group of self-made billion women as her net worth rose to $ 6.5 bn. The brand is now the epitome of wellness and beauty, and it is further opening its luxury stores (Nykaa luxury) in premier destinations. Nykaa has also been a front-runner in bringing international luxury brands to India, giving Indian customers all-encompassing products and services to choose from.
Falguni Nayar has donned several hats in her three-and-a-half-decade career. Born and raised in a Gujarati family in Mumbai, she began her career as a management consultant with AF Ferguson and Co. in 1985 after graduating from IIM Ahmedabad. She then went on to work at Kotak Mahindra Group in various roles for 19 years before deciding to start her entrepreneurial adventure risking her family funds. She had set up Kotak’s international operations in New York and London. When she left Kotak in 2012, She was the Managing Director of its institutional equities and investment banking division. To address the beauty needs of women, she started Nykaa the same year with no prior experience in retail, beauty, or technology. She was just a few months shy of turning 50 then. “I think being active on social media required a huge amount of time and effort. And I am someone who spends my time a little differently. Numbers really motivate me if I am sitting in front of a spreadsheet. I spend a lot of time on it. I believe in social media, it is just that I can’t keep up with it.” Falguni Nayar said in an interview with Money Control. In 2012 Nykaa started with just 60 daily orders. “We’d rather sell the right color of lipstick at full price, than the wrong shade at half off, which would make the buyer unhappy within minutes of wearing it”, Nayar told Bloomberg. The brand name Nykaa is derived from the Sanskrit word Nykaa meaning actress or one in the spotlight. The website was first launched around Diwali 2012 and was available commercially in 2013. In 2018, the company Nykaa Man, India’s first multi-brand e-commerce store for men’s grooming was launched. The company expanded into fashion by launching Nykaa Design Studio, which was renamed Nykaa Fashion.
MARKET STRATEGIES OF NYKAA
Nykaa is one of the key players in the cosmetic industry, which boasts of its wide range of beauty, fashion, and wellness products that it makes available to both physical and digital customers. Nykaa has built its business on the back of a solid digital community comprising brands, celebrities, and social media influencers. This army of new-age digital creations and influencers helps Nykaa reach out to 300-350 million on average across platforms like Facebook, YouTube, and Instagram. The company’s marketing strategy is heavily focused on creating awareness and interest through explainer videos DIY (do-it-yourself) content and make-up tutorials. Nykaa Beauty has around six million followers across Facebook, YouTube, and Instagram. “Our marketing strategies focus on creating awareness of our platform and brand, building platform loyalty, and fostering strong word-of-mouth reviews. Our strategies include engaging beauty creators, influencers, and celebrities, maintaining a presence on social media platforms and within the peer-to-peer multimedia community”, Nykaa noted in its Red Herring prospectus. Nykaa’s 360-degree coordinated marketing and content strategy which has been developed over the last seven years makes it one of the largest omnichannel beauty players in the country, the company said. For an online retailer like Nykaa, customer experience is a key component of a robust customer retention strategy. Content contributes 2.5% to the GMV of Nykaa, with the Average order value of content consumers being 15% higher than non-consumers.
The company is aiming to expand its offline business. It wants to expand its offline evidence through 180 stores all over India by 2024. The company aims to deploy the funds for expansion, setting up new retail stores and warehouses. It also plans to repay its debt which could bring down interest costs and shore profitability. Nykaa will spend ₹234 crores to acquire and retain customers by enhancing the visibility and awareness of its various brands. Nykaa’s mission rests on prominent ideals of curation, information, and personalization. The company believes in bringing the best offering to its customers to help them make the right choice for their holistic beauty needs.
The mission statement of Nykaa read as:-
“Inspiring Indians, both men and women to make fashion and lifestyle choices that best suit them.“
CONCLUSION
- Nykaa has proven to be one of the best startups. With its poised, 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.
