Summary

Nykaa, an Indian beauty retail company founded by Falguni Nayar, is set to launch an IPO, making her India's newest woman billionaire and showcasing the brand's successful transition into selling essential goods during the pandemic, leading to significant revenue growth and a current valuation of $1.2 billion.

Abstract

Nykaa, derived from the Sanskrit word for 'one in the spotlight,' has emerged as a leading beauty and fashion retailer in India, both online and offline. Founded in 2012 by Falguni Nayar, a former investment banker, Nykaa has navigated the challenges of the pandemic by pivoting to sell essential goods, which contributed to a 35% increase in revenue. The company's strategic agility and timely decisions have not only helped it to thrive during difficult times but also positioned it for an IPO in 2022. Nayar's entrepreneurial journey has made her India's newest woman billionaire, with a net worth of approximately $1.1 billion. Nykaa's success is also attributed to its effective use of social media for community building and content creation, which has established it as a reliable voice in the beauty and fashion industry.

Opinions

Freya D’Souza, AVP strategy at Dentsu Webchutney, praises Nykaa's community-building efforts and its focus on creating relevant and engaging content, particularly how-to videos and beauty tips on platforms like YouTube and Instagram.
Falguni Nayar's decision to sell everyday essentials online and launch hygiene products under Nykaa's private label during the pandemic is seen as a strategic move that allowed the company to sustain its business and manage inventory effectively.
The narrative suggests that Nykaa's ability to leverage its offline stores for delivery and match online orders with store availability was crucial in maintaining operations during the pandemic.
The content implies that Nykaa's multi-channel strategy, including expanding to 180 physical stores by 2024, is a key component of its future growth plans.
The mention of Nayar's inclusion in the 2020 Fortune India Most Powerful Women in Business list conveys an opinion of her significant impact and leadership in the industry.

India Welcomes Woman Billionaire And Nykaa Founder Grooming Her Way To An IPO

Nykaa is derived from the Sanskrit word ‘nayaka’

In the latest turnaround to a bitter 2020, Mumbai-based beauty and fashion retailer Nykaa is set to launch an IPO and become a unicorn soon. The Nykaa story is an inspirational tale of what all goes right if you are there in it for the long run. Strategic agility and timely decisions helped the brand to tide over the pandemic blues.

Meet the effervescent ex-investment banker-turned-entrepreneur Falguni Nayar, whose brainchild Nykaa is all set to launch its IPO. She has also become India’s newest woman billionaire. A no-mean feat, considering the market scenario for the last two years.

For years, Falguni Nayar helped Indian companies to stock market debut across Europe and the US. Now, she is guiding her start-up towards fame and recently an IPO.

Nayar is in the nine zeros club now with an approximate net worth of $1.1 billion after a pre-IPO private valuation of the company in June stood it at $2.3 billion.

Nykaa the brand

Nykaa is an Indian beauty retail company selling cosmetic products both online and offline. ‘Nykaa’ is derived from the Sanskrit word ‘nayaka’, which means; one in the spotlight. The brand is extremely popular among girls and women for its eCommerce platform. With its wide range of beauty products, it has established itself as a go-to brand amongst users.

Nykaa started its journey in 2012 as an online corporation, eventually moving towards the multi-channel strategy in its latter years. As of now, it has 76 stores in India.

The brand has more than 2500 products in its kitty. From mascara and makeup remover to the body tattoo art called Mehendi, it offers various products for the target audience.

The company attained Rs 24.5 billion ($330 million) in revenue and other income for the fiscal year ending March 2021. Interestingly, the figure sharply rose by 35% during the pandemic period. For now, the start-up is a profitable venture.

Nykaa has also raised over $70 million in primary funding so far. Also, the company says that its valuation has grown more than 60x over the last eight years.

An integral part of Nykaa’s success is the company’s ability to leverage social media platforms for establishing itself as a reliable voice in the beauty and fashion space.

Freya D’Souza, AVP strategy, Dentsu Webchutney, a digital advertising agency, says, Nykaa has excelled at community-building. “Moreover, the key to Nykaa’s success is crafting relevant, engaging content, with a clear focus on videos. Their how-to videos, along with beauty tips and hacks on YouTube and Instagram, are all directed at beauty practitioners who create and consume content online,” she says.

Beating the pandemic hands down

Last year brought uncertainty and chaos for people and industries all over the world. A nationwide lockdown in India started in March 2020. It was a time to introspect and re-invent the business models. Except for essential commodities like groceries, medicine, and food, all else came to a halt. Only later, the restrictions lifted in various stages.

Apart from businesses serving essentials and medicines, others had to come up with a plan to make this crisis into survival.

For a fashion retailer, it was a tough time. It was a problem period for entrepreneurs such as Falguni Nayar. Nykaa is into fashion, beauty, and wellness products, and none of it falls into the essential category. She knew that the only way out was strategic nimbleness and thinking on your feet, or else they can very well pack their bags and say goodbye. A decision had to be made and quickly for business sustainability.

Perhaps, Nayar thought that she hadn’t come this far to only come this far. Nayar didn’t waste any further time.

She decided to sell everyday essentials online to deal with a crisis-like situation.

As per Nayar, “Nykaa transitioned into an essential only online store overnight, and to manage the transformation, we utilized our offline stores across the country for delivery.

To make even better use of the pandemic, Nykaa launched hygiene products under their private label. From sanitizers, masks, hand washes to PPE kits, and thermometers, Nykaa ensured the ball kept rolling.

“We matched the online order with availability at the store to deliver to the nearest pin code,” she adds.

The move worked helping Nykaa manage its inventory better since air conditioning had been shut down in shopping malls, and moving the stock from stores to warehouses was crucial. With 12 warehouses across the country for its beauty and fashion merchandise, Nykaa managed regular delivery without a break, says Nayar.

The super lady Falguni Nayar

At 50, when the decision is more towards retirement and related planning, she took an entrepreneurial plunge. Falguni quit Kotak to make her dreams come true of building something from the ground up and become a part of its growth.

Nayar found a place in the 2020 Fortune India Most Powerful Women in Business that speaks volumes of the journey.

The road ahead

The company has ambitious plans for expanding its offline business. Nykaa plans to open 180 stores by 2024 all over India. IPO is on the cards for 2022 to take the company public, giving a much-needed boost to future endeavours.

As of now, the company valuation stands at $1.2 billion.