Nykaa in its first ever analyst meet says it’s aiming at 10% share in fashion by CY25

Photo: BCCL


  • Healthy growth in advertising revenue; gross margins to improve
  • Superstore business has GMV potential of $ 3–4bn; 4–6% EBITDA margin
  • Gross margin improvement to higher own brands share
New Delhi: India’s largest online beauty and cosmetics retailer Nykaa hosted its first-ever investor & Analyst Day to discuss its growth strategy. The two business verticals they focus on are a) Nykaa: BPC and b) Nykaa Fashion: Apparel and accessories.

The company initially started with a focus on premium or luxury brands. It has expanded into the mass market, private labels, physical retail and even apparel. Let’s not forget that Nykaa is one of the few profitable new-age companies.

The management said they will continue to focus on growing core businesses as well as diversifying into newer verticals to expand the total addressable market where the market and customer fit.

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Talking about the growth strategy reiterated that they will focus on accelerating customer acquisition (increasing visits), the aim is also to improve conversion rates and repeat customer rates and maximize long-term customer value. What is interesting to know is that they expect their fashion biz to be similar to that of Beauty and Personal Care.

Nykaa is already a dominant player with BPC now focusing on leveraging its personal care segment to leverage its existing beauty users. Now with this increased focus on personal care, there will be a change in the mix but management reassures that personal care and beauty have similar margins and the mix will not change marginally-dilutive

Nykaa Fashion brands / SKUs have grown ~ 4x / 86x over the last two years with new segments also sharing. The company plans to expand into its offline channel during FY 23 for its owned brands as well as some third-party brands. Masstige and Premium are focusing areas and aiming for a 10% share by CY25.

Furthermore, they also talked about their SuperStore strategy. The management highlights that this will not require much working capital investment.

They are looking to target 500k retail outlets, the addressable market being USD3-4bn GMV opportunity in the first phase. At scale, this business could generate a 10-12% gross margin and 4-6% EBITDA margin, with low investments.

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