Nykaa.com, that went live in later 2012, is a Mumbai based e commerce portal that deals with wellness and beauty products. It is spearheaded by Falguni Nayar, former MD and CEO of Kotak Investment Bank.
Promoted by FSN E-Commerce Ventures Pvt. Ltd., the company is self funded and will be looking to raise funds by sometime next year. Speaking about the market scenario in this category, Falguni commented, “I am a believer of the beauty and wellness industry and I think there is a big market and a long way to go for us. I am confident that we will do well.”
Nykaa provides a selection of curated and branded products and is currently offering 100+ brands and 4000+ SKUs; it’s expected to double its catalogue in next 6 months. With 17 people in their team, they maintain 70% to 80% inventory and for that they take into account the products that are more popular. Average purchase ticket size is between INR 1000 to INR 1200 and the website gets 60,000 visits every month (Falguni)
Q-What margins are you selling your products at?
Falguni Nayar – The products are at MRP prices on the site. The margins vary from brand to brand and product to product. But margins could be between 12% to 25%.
Q-And what kind of increase in growth have you seen since you started?
Falguni Nayar – We have grown almost 100%.
Q-What about the actual traffic on website?
Falguni Nayar – We have 60,000 visitors per month and 2000 per day.
Q-UrbanTouch, a big competitor in this space recently shut down however. Why do you think that happened if you see such a growth potential?
Falguni Nayar – As far as I know UrbanTouch had been acquired by FashionandYou. It was only shut down so to say, because of internal management differences. I don’t think that reflects badly on the beauty and wellness category.
Q-So you think this category is viable long term?
Falguni Nayar – Yes. This category as well as ecommerce in general I feel, will move from being a discount based to convenience based. Unlike say the apparel sector, where all merchandise might not be branded leaving scope for margins and discounts, the products in beauty and wellness are all branded and set at MRP. With logistics costs already being high, giving something like a 3% discount doesn’t make sense. The products are available outside in the market also, the service you are providing with e commerce is to bring them to the customers doorstep.
Nykaa is focused on digital and social media marketing for their growth. They are cultivating a presence on Facebook and Twitter and has already got 52,399 likes on Facebook. Nykaa.com now gets added to the list of other Indian beauty and wellness ecommerce websites like VoiletBag, HealthKart, StyleCraze, MedPlusBeauty, LadyBlush etc.
Falguni has prior experience of more than 18 years as MD with Kotak Investment Bank, a subsidiary of Kotak Mahindra Bank, and more than 8 years with A F Ferguson & Co before that.
Where did Urbantouch left this ‘category’ for online market?
- The category has surely proved to be an online sellable product, but with a low ticket size orders.
- Customers are pampered for free shipping even for low value orders
- The phenomenon is more common in metro cities, where tier 2 & 3 cities contribute less in the growth of this category
- Discounts and less margins for acquiring customer and overhead logistics cost, can go fragile on scale
- Demand for category created and penetrating