Industry Knowledge
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The Success Story of Nykaa & Top Learnings from their Journey

xeno pulse nykaa strategy
Published On
November 15, 2021

Discover the inspiring success story of Nykaa and gain valuable insights from their incredible journey. Explore Xeno Pulse's comprehensive article which highlights the top learnings that can fuel your own entrepreneurial aspirations.

Hey there,

Here's a friendly reminder to get those Diwali lights down before you are forced to (not based on personal experience at all, haha)

Jokes apart, it truly feels great to be back at work after such a refreshing Diwali break.

Today's newsletter is a no-brainer as we are going to be talking about Nykaa.

💰Nykaa - Story of the Top Beauty Retail Platform of India

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Nykaa was started in 2012 by Falguni Nayar. She entered the market to remove the irregularities in the beauty industry. Despite high demand, the industry was not up to the mark. Her expertise in Investment banking has made her value the sustainability of the business.

The company has pioneered in providing a one place shopping experience for all domestic brands, international brands, luxury & prestige brands, premium brands, niche, and cult brands.

How is Nykaa different from marketplace models like that of Amazon or Flipkart?

Well in the latter, products are listed by third-party sellers for the customers to make a purchase, which is not the case of Nykaa. This helps Nykaa to secure its customers from any fraudulent sellers and maintain the authenticity of the platform.

Apart from this, exclusive collaborations with big brands in beauty and fashion, the creation of private labels across categories, and having a physical presence have all helped it stand out in a competitive e-commerce industry where buyers are generally vendor-skeptic and looking for the best deal.

Furthermore, the company’s offline stores are present in 3 formats - On Trend, Luxe, and Kiosks.

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Who is Falguni Nayar, India's richest self-made woman?

Nayar was a student of IIM Ahmedabad from where she completed her MBA in Finance. She joined Kotak Mahindra Capital Company, a leading investment bank of India soon after turning into a graduate.

She served the bank for 18 long years after which resigned in order to dedicatedly follow her entrepreneurial dream:

Born and raised in a Gujarati family, her father ran a small bearings company, assisted by her mother. The household chatter revolved around investments, the stock market, and trade. “Plus, I’m Gujarati," she said in a 2017 interview. Entrepreneurship, it seems, was in her blood.

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IPO and listing

FSN E-Commerce Ventures, the parent company of India's biggest cosmetics etailer Nykaa, launched its IPO on October 28 to raise as much as Rs 5,352 crore by offering shares in a price band of Rs 1,085-1,125 apiece. The issue was subscribed nearly 82 times.

On Wednesday, Nykaa listed at nearly 80% premium and ended the day 96.15% higher than its issue price at Rs 2,206.70—that translates to a market capitalisation of Rs 1,04,360.85 crore on day one. The Nayar family’s net worth is more.

🧐Some Learnings from Nykaa

Despite multiple large, well-funded incumbents playing in the same space, Nykaa has managed to build a behemoth of a business that’s growing, profitable, and has proven to be a destination of choice for make-up and beauty lovers.

Their ideology was very clear: Definitive, authentic selection of make-up and beauty brands, sourced straight from the brands themselves.

Here's what the brand has focused upon over the years:

  1. Focussing on an inventory-led model + Focussing on a great customer experience in their key markets
  2. Exclusive launches of “cult brands” on their platform- Huda Beauty, Charlotte Tilbury & more
  3. Building a strong content & creator ecosystem around their brand
  4. Taking Nykaa from a marketplace to a Brand, by launching their private label (different from Purplle’s strategy)

While making choices, they seem to have invested in the ones that matter most to their customer & in their category.

👉What else is happening in the world?

1. Black Friday is coming up, here's how Bestseller India increased their incremental revenue by 19% last year

How did they optimize their sale campaigns during the Biggest Fashion Sale of the answer? What are the step-by-step strategies used by Bestseller India?

Answering all these questions in the case study here.

2. Diwali festive sale crosses Rs 1.25 trillion, breaks all records in 10 yrs

Shoppers across the country bought products worth Rs 1.25 trillion this Diwali, helping retailers log decade-high sales — a sign of resilient demand even as inflation remains high.

3. Indian D2C beauty brand MyGlamm becomes unicorn with $150 million funding

The Mumbai-headquartered startup has raised $150 million in its Series D financing round from Prosus Ventures and Warburg Pincus.

That's all for today folks. Have a great weekend.

See you next week,

Marketing & Content Strategist

Anisha Arora is an experienced Marketing & Content Professional who often breaks down complex topics for readers here. She collaborates with various teams to seamlessly combine different viewpoints and knowledge about customer retention, CRM, loyalty, and marketing technology. When she's not working, you'll find Anisha sipping coffee and binge-watching her favorite TV shows.


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