An investor darling since its listing at the Indian National Stock Exchange (NSE) in Mumbai in 2021, Nykaa continues its rapid expansion. The fashion and beauty retailer announced a 25% increase in sales during the first quarter of its 2024-2025 financial year, ending at the end of June 2024. The growth of its beauty business stood at 28%, compared to 15% for fashion, compared to the first quarter of the previous year.
Growing consumer base
"I think the key highlight for the quarter is that Nykaa continues to build its customer base. Now our cumulative customer base stands at 35 million, which is a 33% year-on-year growth," highlighted Falguni Nayar, Executive Chairperson, Managing Director and CEO.
At the end of June, the multi-channel retailer had 200 physical stores across 72 cities in its network, now the largest in the country. Nykaa has opened 100 new stores within two years.
In the first quarter, Nykaa acquired 27% new customers, with a 26% increase in the number of transactions.
Categories and brands diversification
Taking advantage of the dynamism of the beauty market in India, Nykaa is looking to meet consumer expectations by diversifying its product offering, both in terms of categories and brands.
“Makeup and skincare are two of the core categories to our beauty play historically, and they have served us well in terms of growth and they continue to do so. However, we believe that fragrance is the third pillar in any specialty beauty play globally, and this has been a big focus of ours over the past 12 months,” said Anchit Nayar, Executive Director and CEO, Beauty E-Commerce at Nykaa.
Apparently, the strategy is paying rich dividends, since the retailer’s prestige fragrance category has grown at over 74% year-over-year in the first quarter of the current financial year.
Nykaa, which estimates its market share in the prestige perfume sector at 13% (compared to 10% in 2023), has stated its ambition to reach 19% during the financial year and thus take the leading position in India.
Beyond fragrance, the retailer is also banking on the growth of the hair care market and the premiumisation and diversification of this very important category in India.
"We’re managing to sell more categories to our existing customers, which increases the basket size as well as the annual consumption value of our existing customers," added Anchit Nayar.
Given the structure of the Indian market, Nykaa’s ability to offer a portfolio of over 3,600 brands of all types online and a portfolio of 80-100 brands, mainly high-end, in-store is certainly a powerful asset.
In two years, Nykaa has managed to double the number of its physical stores, whose network now accounts for roughly 8% of sales, while continuing its rapid growth online.
