Hardeep Singh
Introduction to the beauty eCommerce sector
This year has been no exception for the beauty business, which has always been at the forefront of eCommerce reinvention and innovation. Beauty businesses are continuously seeking for new methods to improve their client experience, from clean beauty to hyper-personalized skincare and AI cosmetics.With so much going on, we thought we’d take a closer look at this ever-changing industry and share our top beauty eCommerce trends for 2021.
The worldwide beauty business has never lost its allure, despite the fact that beauty is subjective. Along with its consistent expansion, the sector has built a devoted customer base that spans decades. Which lady doesn’t enjoy applying cosmetics? From watching beauty videos to experimenting with new colours on spare days, to adorning oneself before a wedding or function, or simply putting on a fast light application before work, cosmetics play a big role in all of our lives.
Consumers seeking value-driven goods with which they can identify in terms of their personalities and lifestyles are increasingly expressing the need to find themselves. Multicultural beauty product sales are expanding at twice the rate of the traditional sector, according to Global Cosmetic Business statistics, and firms who embrace inclusive designs and lines are seeing their efforts rewarded in their annual earnings.
However, we’ve come a long way from the days when customers had to go to a cosmetic store to get their makeup. Why should customers have to shop at brick-and-mortar establishments when online cosmetics vendors allow them to order items at any time and from any location? Despite the fact that the Indian economy has plummeted due to the COVID19 pandemic-induced shutdown, a few platforms have remained stable.
Nykaa is one of India’s e-commerce platforms for beauty and wellness products, and it has quickly become the preferred alternative for all cosmetics enthusiasts. Anyone who has even a passing interest in beauty and health products has most certainly heard of Nykaa. This is a cosmetics and beauty-related e-commerce portal. This platform, which was founded in 2012, has played an important role in dispelling the idea that e-commerce and beauty retail do not prosper in India.
Nykaa has recently become a household name in India as a result of its initial public offering (IPO) and the overwhelming response it received, catapulting its founder Falguni Nayar into India’s elite group of self-made billionaire women, with her net worth increasing to $6.5 billion as a result of Nykaa’s record listing, according to the Bloomberg Billionaires Index.
Nykaa story and foundation stone
Nykaa is a cosmetics company based in India that specialises in multi-beauty and personal care products. It began as a single e-commerce site before spreading to a number of retail sites around the country.
For both men and women, the firm specialises in cosmetics, skincare, haircare, fragrances, bath & body, luxury, and wellness items. The service, which claims to have 1.5 million monthly users from India, allows for the correct preparation and pricing of branded merchandise.
Falguni Nayar was looking for a promising business opportunity in India when she discovered an inconsistency in the beauty items market in India, which was not up to par with the scope of the product in other countries such as France or Japan, despite high demand, due to a lack of product availability in many places, despite high demand. As a result, she and her husband, Sanjay Nayar, founded Nykaa. The platform started out as an online organisation and has now grown to become an omnichannel platform.
During her three-and-a-half-decade career, Falguni Nayar has worn a number of crowns. She began her career as a management consultant with AF Ferguson and Co. after graduating from IIM Ahmedabad in 1985. She was born and reared in a Gujarati household in Mumbai. She went on to work for the Kotak Mahindra Group for 19 years in various capacities before deciding to launch her own company and jeopardising her family’s savings. In New York and London, she established Kotak’s worldwide activities. She was the Managing Director of Kotak’s institutional equities and investment banking operations until resigning in 2012.
She saw the untapped potential of the internet beauty industry. There was scarcity of accessible online brands and things that people could trust and purchase with confidence at the time, thus she recognisedNykaa as having promise.
She was interested about cosmetics and beauty products, and she wanted to change the way Indian women thought about personal hygiene. Nykaa started in 2012 with the intention of producing something completely unique to her.
Despite having no prior experience in retail, cosmetics, or technology, she established Nykaa the same year to satisfy women’s beauty needs. At the time, she was only a few months away from turning 50.
Nayar has a net worth of $7 billion after nine years, making her India’s richest self-made woman. Falguni Nayar and her family still hold 56.56 percent of the company following its IPO. Nykaa has comfortably entered India’s top 100 most valuable firms, with a market capitalization of $14 billion. Godrej Consumer, Bharat Petroleum, and IndiGo are among India’s top 52 companies.
Nayar has developed a capital-efficient and asset-light company strategy based on her expertise as a banker. Nykaa had only raised $100 million in equity prior to its $720 million IPO.
Growth potential of Nykaa
Nykaa’s platform has come a long way since its inception in 2012, and it currently plays an important part in the growth of the beauty industry. Nykaa has over 5 million monthly active users, 80 locations throughout India, and over 500 brands and 130,000 goods available on its website, app, and stores, according to CNBCTV18. The company’s transformation from an online-only approach to an omnichannel retail model has assisted its growth. This adjustment has had a significant impact on how the target demographic perceives the brand, as well as allowing the organisation to reach out to a previously untapped market.
Nykaa is trying to guarantee that all of our stakeholders are adequately served in the face of this unprecedented global crisis, and that Nykaa emerges as a leading retail player in the sector. According to Your Story, in July of this year, the platform announced that its in-house brand Nykaa Beauty has expanded into travel care and home essentials. Nykaa was able to satisfy demand for crucial items throughout the lockout, overcoming logistical challenges and winning consumer trust. In recent months, the firm has reacted quickly to their clients’ requirements, offering a line of hygiene basics such as handwashes, hand sanitizers, mascots and other basic essentials.
According to the Economic Times, the Nykaa Fashion label has launched its Nykd brand in the intimate garment business. On October 22, 2021, Nykaa announced the acquisition of Dot & Key Wellness, a local skincare company.
Customers are gravitating toward key categories like personal skin and hair care, according to Nykaa.
Nykaa’s funding and IPO
From October 28 to November 1, the platform’s initial public offering (IPO) was accessible for subscription, with a price range of Rs 1,085-1,125 per share. Nykaa’s 2.64 crore share initial public offering (IPO) was 81.78 times oversubscribed. When Nykaa’s first public offering (IPO) became available for subscription, investors reacted favourably. On November 10, the platform was released on the BSE and NSE, and its stock ended at 2,206.70, nearly double the issue price, valuing the beauty company at $14 billion.
FSN E-Commerce Ventures Ltd, Nykaa’s parent company, announced on October 27th 2021 that it has collected Rs 2,396 crore from anchor investors ahead of its IPO. In late November 2020, Fidelity Management & Research Company made an undisclosed investment in the platform. The platform obtained a new $13 million financing round from prior investor Steadview Capital in early April 2020, solidifying its position as a unicorn. Among the platform’s primary investors are Steadview Capital, TPG Growth, and Lighthouse Funds.
Conclusion
Nykaa has just released several of the new products, some of which are backed by celebrities. They’ve also expanded their personal brand with a few more lines.
The platform is working on a number of major initiatives in the beauty and fashion industries, with an emphasis on offering clients high-quality items and services at reasonable prices. The platform has a lot of potential to grow and strengthen its position in the future.
However, due to the country’s low quality of living, India remains a minor market in the cosmetics sector, and Nykaa goods are only available to a small portion of India’s 1.3 billion inhabitants. However, as economic and cultural developments empower more women, the number is increasing. According to Technopak, the beauty industry would increase at a rate of more than 8% each year through 2025.
