The Indian e-commerce sector is poised to reach $350 billion by 2030. With online marketplaces seeing great traction, many traditional companies are now veering towards an omnichannel approach instead of depending only on one consumer touchpoint.
Nykaa held a preview for Nykaaland, a two-day beauty event with 80+Asked about beauty as a category in India, Nayar said it was Nykaa’s responsibility to grow the category as India has the lowest per capita consumption of beauty in the world. He shared that this was one of the biggest reasons why Nykaa came up with the event. brands. CEO Anchit Nayar spoke on Nykaa's business and the India growth story.
Based on India’s spend on beauty, Nayar spoke about the barriers in the growth category. He said the major challenges were - Awareness, Accessibility and Affordability. “Affordability is improving. India's GDP per capita is increasing. Several high-income and middle-income households in the country are growing faster than the number of lower-income households in the country. There's an urbanization of the population. There is a digitization of the beauty business. So, from an affordability perspective, it was probably an issue in the past for a larger segment of the population. That is reducing.”
Asked about the business, Nayar said the average annual consumption value of beauty on Nykaa was $80, whereas, the Indian average stood at $15. “The majority of our business comes from repeat customers. So, we have a loyal, very sticky, and highly engaged customer base. The repeat behaviour is very strong on our platform. A large per cent of our business is from existing organic traffic and customers.”
Speaking on the strategy to stand out among the competitors, Nayar said that there was a misconception about Nykaa being the first mover in beauty. However, there were players before Nykaa like Amazon, Flipkart, Myntra, and Purple, among others. He acknowledged that building a B2C business takes time considering the trust factor of consumers, business partners, and different nuances to run a smooth business. With many competitors moving in the same direction, it will only help the category to expand. He said, “If you look at retail in India, it's the biggest retail market in the world. India is expected to be one of the largest beauty markets in the world.”
Asked about inflation and the influx of demand, Nayar said that it was short-term and they don’t want to give into it. “I'm a strong believer that we're in this business for the next 100 years. This is not a short-term play for them. It's not about getting a valuation and selling it on to somebody else. We truly believe in India's consumption story. Today, everybody in the world is saying India is the future. People have been let down by China. Yes, it served them well for the last 10-15 years. But today, people feel that it's a risky market. There's no predictability. Consumption is tapering. Growth is slowing.”
“They were all too highly dependent on China. Now, they want to find an alternative. And there's no other market in the world that provides the size, the growth opportunity, a culture, a democracy, and a system of government that is more predictable and less risky. So, global brands are looking at India today. So, will there be a quarter here and there when festive dates might move out of Q2 to Q3 or inflation be slightly elevated? Of course. But in the longer term, this should be the fastest growing. And in the next decade, we believe India will be one of the largest markets, if not the largest market in the world,” he asserted.
About global beauty brands’ interest in India, Nayar said the company wants to
Asked about Nykaa’s association with influencers, Nayar said they work with over 4,000-5,000 influencers but the company doesn’t solely rely on influencers. “They help us do a lot of top of mind, top of funnel brand building, help us do a lot of education. We want to do a lot of education on beauty as a category, and influencers do that well,” he shared.
Currently, Nykaa has 150 stores across 60 locations in the country and the company serves over 27,000 pin codes. Nayar stated that Nykaa aspired to build 150 more stores in the next few years.
support India-based brands globally with Kay Beauty as a flagship brand, which is a successful business around the world. Talking about Nykaa’s efforts, he shared that the company recently hosted an incubator program in partnership with the Estee Lauder group - Beauty & You. “With Estee Lauder, we are really looking to identify the next generation of beauty founders out of India who will build brands not only for India but for the global market.”
e4m asked Nayar about the trend of personalisation for consumers and how it was in India, a country with different dynamics. Nayar said that although personalization was a good strategy for better conversions, hyper-personalization was not sustainable in the longer run as the customer’s discovery journey could be obstructed. “I have to say that you have to take personalization with a grain of salt. If you over-personalize when the Indian consumer is still so early in their journey, you'll end up stifling the growth. So, personalizing, and showing them products that they're interested in is important. But equally important is showing them products that they have not had a chance to experience or learn about yet.”
