Omni-channel expansion to strengthen Nykaa ‘s grip on India’s cosmetic industry

The company plans to capture the overall market share, worth INR14.1t by 2025.

Nykaa’s plan to expand its omnichannel strategy with the opening of 300 physical stores in 2022, is expected to strengthen its foothold in India’s cosmetics industry, GlobalData reported.

This is on the back of a 57% revenue growth recorded between 2019 and 2020, which the company is expected to further accelerate.

“Nykaa displayed exceptional performance in the online cosmetics & fashion retail landscape during 2019-20, which was among the most non-essential categories during the pandemic,” Ankita Roy, Retail Analyst at GlobalData, said.  

Roy noted the company plans to capture the market share in India’s overall cosmetics and fashion market, estimated to be valued at INR14.1t, approximately US$ 187.87b, by 2025.

In its Q4 2021 Consumer Survey, GlobalData found that whilst online remains the most preferred channel for purchasing beauty and grooming products in India, 63% of respondents still prefer physical stores.

“The retailer’s strategy to expand offline will help it to cater to consumers who prefer to try on cosmetics & beauty and fashion products before purchasing.”

According to Roy, whilst Nykaa saw an overall revenue increase, the company’s second quarter income in 2021 dropped 96% due to marketing activities in relation to its public listing.

“Given the dynamic retail landscape, companies need to adopt an omnichannel approach to provide seamless shopping experiences to customers across all sales channels, including online, mobile, and physical stores,” Roy said.

In October 2021, Nykaa made its public debut after filing for an IPO, with a valuation of nearly US$14bn. The company is among the top IPOs with the highest listing gains in 2021.

“As the company went public, investors’ confidence in the retailer increased manifolds thus leading Nykaa to stick to its long-term growth strategies,” Roy also said.

“The listing gains will help the retailer to fulfil its omnichannel strategies and make advancements in its primary online operations.”