nykaa digital marketing case study

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Case Study On Nykaa’s Digital Marketing Strategies

• May 29, 2022

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Do you know what’s the meaning behind the name of our most-loved brand, “Nykaa?” Nykaa is derived from the Sanskrit word Nayaka which translates to “the one in the spotlight.” Well, they sure have been in the spotlight for the past few years and have a promising future in the cosmetics and e-commerce industry.

Nykaa has grown through leaps and bounds ever since its inception. Their growth is evident by introducing their own makeup and skincare line, their successful IPO release, and much more! Even when the Covid 19 pandemic brought many businesses to a standstill, Nykaa continued to thrive and make its way to one of the largest e-commerce platforms. 

Get to know more about Nykaa’s Founder – Indian Entrepreneur

The question we’re looking for an answer to is how Nykaa, a startup nobody had ever heard of, entered the cosmetic industry and quickly even monopolised it?

About Nykaa

Nykaa is one of the first E-commerce beauty platforms, having launched in 2012. Falguni Nayar, the former managing director of the Kotak Mahindra Company, came up with the brand’s concept first. She then converted the store into an E-commerce portal and added all of the necessary cosmetics and skincare products.

Nayyar achieved her goal in a short period of time, and it is today one of India’s most sought-after and well-known brands.

To provide services to clients, Nykaa primarily uses an inventory-based methodology. Additionally, it serves as a well-organized company listing platform for beauty and skin products. 

Nykaa’s Tagline is “ Your Beauty, Our Passion “

Nykaa Luxe and Nykaa on-trend are the two offline retail layouts for the company. The Luxe format focuses on the in-house collections, as well as all other national and international brands. The e-commerce store has three major warehouses in Mumbai, Delhi, and Bangalore, from which it ships products across the country.

In 2015, the company debuted its own product line, which customers received well. The brand first introduced bath and body care items in 2016, quickly becoming popular. The demand for the products is a significant factor in the store’s expansion.

Here is a small clip of Nykaa’s Journey;

View this post on Instagram A post shared by Nykaa Beauty (@nykaabeauty)

Now, Let’s understand what Nykaa’s Digital Marketing Strategies are, Keep reading to find out ;

What Can Marketers Learn from Nykaa’s Digital Marketing Strategies? 

Nykaa was founded in 2012 , and it started earning crores in the first four years. They generated a revenue of INR 220 crores in the year 2014-16 with 95% of the customers being repeated ones. 

Delivering something new to customers is a significant component of Nykaa’s marketing approach. Nykaa was a novel concept in Indian marketplaces at the time, and it now has a significant following.

1. Providing Value

Another element that other marketers can take up from Nyka’s marketing strategy is the importance of providing value in whatever way imaginable. Nykaa’s goods, customer service, social media material, YouTube videos, and blogs all provide value. Furthermore, the brand’s entire marketing strategy is geared around ensuring that clients are completely satisfied even before they try out the product.

A brand’s marketing approach should not be focused on persuading people but rather on providing a fantastic experience even before they purchase it.

2. Posting Deals

Who doesn’t love being bombarded with deals? Nykaa knows their audience definitely loves being pampered. Hence, they don’t leave any occasion behind to introduce new deals and offers for their customers. Additionally, since online e-commerce brands are always offering discounts, Nykaa took a step forward to keep up with the competition and ensure their customers stay loyal to them.

3. Expansion

Nykaa initially started as an online store where one could find cosmetics. However, after a few years, they launched their own line of skincare and beauty products with their brand name. They also launched Nykaa fashion with a wide variety of dresses, Nykaa Men with products exclusively for men, and many more expansion aspects. 

View this post on Instagram A post shared by Nykaa Fashion (@nykaafashion)

4. Innovation

Nykaa always brings innovation to its brand and its strategies. From introducing new products to their line to working with influencers and posting creative content, they always stay on top of trends and implement new brand strategies.

5. Celebrity Endorsements

By collaborating with popular celebrities like Katrina Kaif, Janhvi Kapoor, and Alia Bhatt to endorse their products and brand, Nykaa establishes pathos and hence gains people’s trust through it.

Janhvi Kapoor

Katrina Kaif

6. Sending Birthday Gifts

If a Nykaa private member places an order in their birthday month, they get a free birthday gift sent to them along with their order.

This is an interesting concept unique to Nykaa alone and one that has been very successful. Doing this motivates customers to make more purchases and order something during their birthday month. 

Nykaa’s Digital Marketing Strategies

Nykaa’s digital marketing strategies are super amazing, in every digital platform they have different strategies. 

1. Nykaa’s Social Media Marketing Strategies 

Nykaa’s instagram and facebook marketing strategies .

Nykaa is dominating the social sphere with its great content, which is bite-sized and easy to consume. The company has accounts on a variety of social networking sites. It has ten official accounts: Nykaa Fashion, Mynykaa, Nykaa Beauty, Nykaa Man, Naykd by Nykaa, Nykaa Naturals, Nykaa Wellness, Nykaa Fashion Kids, Nykaa Pro, and RSVP by Nykaa , all dedicated to the main brand.

The team makes certain that the Nykaa marketing strategy is executed properly in order to deliver timely, useful, and interesting content. Influencers and live sessions with experts help them generate a lot of talk before their special Pink Friday sales.

Their main account, @mynykaa, has over 2.2 million followers on Instagram , where they give away makeup tips, collaborate with influencers, publish contest-related information and offers, and show off their products. 

Influencer Marketing

As compared to more traditional platforms, influencer marketing remains one of the most effective and cost-effective ways to engage with clients and is thus an important part of Nykaa’s marketing strategy. Despite having actor Janhvi Kapoor as its brand ambassador, Nykaa largely relies on influencers and content creators to promote new brand launches and sales.

Influencers are an important aspect of the company’s content marketing strategy since they help customers educate and make the best decisions for themselves. Nykaa believes in developing long-term relationships with influencers to increase consumer trust and engagement. Through this method, it has built a community of people who share ideas and suggestions, become inspired, learn, and watch new videos. The organisation has devised the best plan for maintaining consumers and acquiring new ones by executing this approach. It serves both affluent and middle-class customers.

Nykaa Network is an interactive beauty website that allows users to communicate with other beauty fans. It also gained international notoriety as a result of its well-publicized collaboration with Indian star Katrina Kaif. Expert beauty guidance is also available. To make customers happy with their purchases, the business frequently includes presents with special orders. It’s a fantastic way to keep customers coming back.

YouTube marketing

A comprehensive YouTube marketing campaign is part of Nykaa’s marketing strategy. Nykaa has a YouTube channel called “ Nykaa TV “ that offers video tutorials on how to use cosmetics and fashion products, as well as how to keep current in society. The company does not sell its products; instead, it focuses on offering consumable content such as beauty, personal care tips, cosmetic hacks, and more to its target customers.

Nykaa’s YouTube playlist features a variety of topics such as beauty horoscopes, bridal makeup techniques, celebrity beauty secrets, and more. They provide a variety of how-to films to aid users and consumers in picking the right products and correctly using them. Additionally, the company advertises on YouTube to reach out to its customers.  

2. Nykaa’s SEO Strategies

Nykaa uses search engine optimization (SEO) services to increase organic traffic and brand visibility. Nykaa has used SEO to improve its content by including keywords that are likely to rank higher in search results. The cosmetics company has also streamlined its blogs and articles so that Google can index and search them rapidly. It has also been in front of the competition by keeping up with industry advancements.

Website Overview

Nykaa has an “amazing” website overall. With a domain authority of 57 , they have the edge over their competitors and get an abundance of organic traffic to their website. 

Content Marketing

Content marketing is one of Nykaa’s most effective techniques for attracting customers. Nykaa converts its audience into customers by providing them with a range of consumable materials. 

Nykaa produces blogs on beauty, cosmetics, and personal care on its own site, “Nykaa beauty book.”

Additionally, the brand produces video content such as cosmetic tutorials, DIYs, and more. The company has a staff of young professionals who know their target customers’ tastes and likes and develop content for them.

3. Nykaa’s Email Marketing Strategies

Nykaa has gone to considerable measures to advertise, whether on its website or through its mobile application, as part of its vast marketing plan. Nykaa places a high value on brand positioning via the website, ensuring that the target audience has access to new and updated content on a regular basis. 

To boost online sales, the company uses blogs, tutorials, and targeted ads on its main platform. The website aspires to create a positive impact on the beauty and fashion industries. It has also focused on providing customers with high-quality goods and services at deeply discounted prices. The platform appears to have a lot of room for expansion and supremacy in the future.

Nykaa’s Top Digital Marketing Campaigns 

1. nykaa femina awards.

Nykaa has its own wings with ramps and glamour, thanks to its large population of famous artists and professionals. It also has a cooperation with Femina India, a fashion show beauty runner. It does provide the company with a lot of possibilities in terms of sponsorship and large-scale advertising.

Deepika Padukone received the powerful performance of the year award

Every year, this event is held to honour the love of beauty and body confidence among various trends and body kinds. Nykaa benefits from a lot more than just a ramp walk with a professional tie-up like this one. It’s a way for many brands and products to get recognition and guide people to buy the best products.

2. #AllThatYouLove with Nykaa!

Nykaa Beauty launched a new campaign featuring Janhvi Kapoor, the brand’s brand ambassador. The ad, “All That You Love,” celebrates every Nykaa woman’s unabashed relationship with her beauty products while simultaneously paying homage to the brand’s relationship with customers. Nykaa has become a trusted partner and a source of joy for women across the country to find and access all that they love, at the press of a button, after playing a vital role in fueling the beauty goals of Indian women over the years.

Conclusion 

Nykaa uses every platform to provide value for their customers and ensure they all keep coming back for more. Do you wish to devise a similar but better strategy? Enroll in an online digital marketing course to boost your company’s digital marketing tactics, just like Nykaa’s digital marketing strategies. This course is for anyone interested in learning everything there is to know about digital marketing and how to apply it to their own company.

Are you ready to elevate the image of your organization to new heights? The best solution is to start learning digital marketing. Check out our free digital marketing course. And get started!

What do you think about Nykaa’s digital marketing strategies? Please share your thoughts in the section below!

Written By Digital Scholar

Digital Scholar is a premier agency-styled digital marketing institute in India. Which offers an online digital marketing course and a free digital marketing course worldwide to elevate their digital skills and become industry experts. Digital Scholar is headed by Sorav Jain and co-founder Rishi Jain, who are pioneers in the field of digital marketing. Digital Scholar’s blogs touch upon numerous aspects of digital marketing and help you get intensive ideas of different domains of digital marketing.

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Nykaa Case Study 2023: Digital Marketing Strategies That Helped Them Achieve Success

If you love to do makeup or know someone who loves makeup, you would have heard about Nykaa.

But have you ever wondered how Nykaa formed and how it works?

Why do they give such huge discounts on Nykaa?

Do you know the idea behind creating their e-commerce store?

If not, we have covered everything for you.

Table of Contents

This Nykaa case study covers everything, including the journey of Nykaa, the company, the problems they faced, the Nykaa SWOT analysis, and many more.

Nykaa Case Study- About Nykaa Company

Nykaa is an Indian eCommerce company that sells wellness, beauty, and fashion products. Also, it sells products made in India and overseas.

But why the name, Nykaa?

How many of you know the meaning behind “Nykaa?”

Nykaa comes from “Nayaka,” in Sanskrit, which means “the one in the spotlight.”

They have been in the limelight for the last few years and have a great future in the e-commerce and cosmetics industry.

The brand follows an inventory-based model with warehouses in Mumbai, Pune, New Delhi, Kolkata, Haryana, and Bangalore. They claim to have more than 200,000 products across 2,000 brands.

In 2020, Nykaa was priced at Rs.85 billion, which made it the first-ever unicorn startup led by an Indian woman.

In addition to its primary eCommerce business, it had established an offline presence through 76 brick-and-mortar stores across India. It has three offline store formats, including Nykaa On trend, Nykaa Luxe, and Nykaa beauty kiosks.

Nykaa also has a series of in-house brands in fashion and beauty. Some of them are:

Nykaa House of Brands- Nykaa Cosmetics, Kay Beauty, Nykaa Naturals

Nykaa Fashion- 20 Dresses, Nykd by Nykaa, Likha, RSVP, Pipa Bella, Mondno

In 2015, Nykaa launched its collection of in-house beauty products under Nykaa cosmetics, extending it across other categories like eyes, lips, nails, and face.

Nykaa Naturals is a collection of skincare and personal care products. In 2019, the brand launched its Wanderlust Bath & Body collection.

Later, the same year, they came up with a beauty line with the famous designer Masaba Gupta in the name of Masaba by Nykaa.

Now that we know about the Nykaa company, let us understand the journey of Nykaa.

Nykaa’s Journey

Falguni Nayar, previously working as a Managing Director at Kotak Mahindra Capital Company, founded Nykaa in 2012. It began as an eCommerce portal that sells a wide range of beauty and wellness products.

The founder, Falguni Nayar, graduated and then completed her MBA from IIM Ahmedabad, after which she joined A F Ferguson & Co as a manager. There, she worked for eight years.

Later she joined Kotak Mahindra Capital Company, a famous investment Bank in India.

After that, Nayar led Kotak Securities and later became the Managing Director of Kotak Investment Banking in 2007.

She worked with the bank for 18 years, after which she resigned to start her company, Nykaa.com.

When Nykaa made its debut, the beauty industry in India was shattered.

Then, brick-and-mortar shops had a few collections, and men’s beauty products did not have as many varieties as we have today.

But the brand offered Indians a unique combination of affordable products and brands, luxury brands, and less harmful effects, all under one roof.

And it’s not simply products; Nykaa has a vast collection of informative blogs, forums, and articles for readers to read and share their knowledge. Falguni Nayar’s net worth was last recorded at Rs, 57,000 crores.

Nayar is the Founding Member of the Asia Society in India. In addition, her name is on several boards, including Dabur India, Aviva Insurance Board.

She is an Independent Member of the Tata Motors Board. Falguni is a source of inspiration to all as a successful entrepreneur and a responsible homemaker.

Falguni’s interest in her business, attention to detail, and involvement in each aspect show the extraordinary qualities that made her a great leader.

Also, she has set a prominent example for the world and supported the saying, “age is just a number” when owning a business.

It is the start of the Nykaa business model. Now, let’s have a look at their business model.

Nykaa’s Business Model

Nykaa is one of the few companies which follow an inventory-based eCommerce model.

Now, what is an inventory model?

The company stores the collection of goods bought directly from the buyers.

They keep their products in their warehouse. The brand has warehouses in Mumbai, New Delhi, and Bengaluru.

They sell products directly from there. In this mode of business, the profit margin is too high.

The company is solely responsible for any damage. They attained their breakeven after five years since they started their operations.

Initially, the cost to attain a customer was Rs.1000/, which has now decreased from Rs.200 to Rs.300. Nykaa has built its offline presence in nearly 35 stores.

Nykaa has two store formats known as Nykaa On-Trend and Nykaa Luxe.

The Luxe format includes luxury beauty brands.

On the other hand, the On-Trend format features designed products based on the category depending on their popularity.

The target audience of Nykaa is the 22-35 age group.

Nykaa Competitors

Some of the leading competitors are:

• Craftsvilla

Nykaa’s Mission

Nykaa’s mission stands on three essential ideals. These are information, curation, and personalization. The brand believes in offering the best, which will help them make the right choice for their holistic beauty requirements.

The mission statement of Nykaa is: “Inspiring Indians, both men, and women, to make lifestyle and fashion choices that best suit them.”

What can you learn from Nykaa’s Digital Marketing Strategies?

Nykaa started in 2012, and it started earning money in crores in the initial four years. They made a revenue of INR 220 crores in 2014-16, with nearly 95% of the consumers being repeated. Delivering something new to consumers is an essential component of the marketing approach of Nykaa.

• Offering the correct value-  Another essential element other marketers can learn from Nykaas’s marketing strategy is the significance of providing value in all possible ways. 

Nykaa’s customer service, goods, YouTube videos, social media material, and blogs offer the required value.

In addition, the brand’s whole marketing strategy ensures that clients are delighted even before the customers try their product.

A brand’s marketing approach should not focus on convincing people but on offering a fantastic experience before buying the product.

2. Posting deals- Who does not love deals? Nykaa understands that their audience loves pampering. Therefore, they don’t leave any chance to develop new consumer offers and discounts. 

In addition, as online eCommerce brands always give discounts, Nykaa took an important step to be in the competition and ensure their clients always stay with them.

3. Growth- Nykaa started as an online store where one could buy cosmetics. After a few years, they launched their collection of beauty and skincare products under their name. 

They even launched Nykaa fashion with various dresses, Nykaa men with exclusive items for men, and many more growing aspects.

4. Innovation- Nykaa always tries to bring innovation to its strategies. From launching new products to their line to working with influences and posting content, they always remain on top of the trends and implement unique plans for their brand. 

Thinking about building strategies to help a brand achieve such success? To know how to build such strategies, learn digital marketing .

Nykaa- Investors and Funding

Nykaa’s valuation surpassed the $13 billion mark in its debut on Indian stock exchanges. As a result, the stocks started trading at a premium of around 82% and increased to nearly 96%.

The funding journey of Nykaa began with money invested by Falguni Nayar and her husband, Sanjay Nayar, who is currently the CEO of KKR.

Although both the founders of Nykaa had a massive connection in investment banking, they did not contact any institutional investors till the brand witnessed high growth.

A lead institutional investor, TVS Capital, funded Nykaa in its Series B round at a Rs. 500 crores valuation. In addition, Angel investors like Harindarpal Singh Banga, belonging to “The Caravel Group,” had previously supported Nykaa.

The total fund that Nykaa raised is nearly $341.9 million. The final fundraising round of Nykaa came as an undisclosed round on November 26, 2020. Some famous Nykaa investors include Steadview, Lighthouse, Fidelity Management, and Sunil Kant Munjal of Hero Group.

Nykaa-Acquisitions

To date, Nykaa has acquired five companies. The brand last acquired Nudge Wellness, a New Delhi-based company, on April 22, 2022. It attained Kica on the same date and chose 18.5% stakes in the beauty brand Earth Rhythm for around $5.45 million.

Previously, it acquired Dot & Key, a Kolkata-based skincare brand, on October 22, 2021.

Nykaa is in the late stage of attaining Little Black Book, according to reports dated June 20, 2022. However, companies have discussed the acquisition for a few months and recently provided a term sheet to LBB.

On August 6, 2022, Nykaa received its board’s approval for the purchase in an all-money deal to be finalized within 60 days.

Currently, Nykaa is looking forward to supporting its offerings. Its last acquisitions aligned with a similar aim to beat competitors like Purplle. According to the news sources, Nykaa will acquire MenXP.

SWOT Analysis of Nykaa

Strengths of Nykaa:

Because of its strong distribution game, the market has a broad reach to its consumers, ensuring that the products are available to the customers easily.

The brand’s low-cost structure helps it sell more products to its clients.

The dealer community of the brand is vital for Nykaa. That provides them with supplies and focuses on supporting the company’s products and training.

When it comes to Nykaa, social media plays a significant role. The brand has a solid social media presence, with a million followers gained through customer engagement.

The location and geography of the brand provide it with a cost-benefit in serving its clients compared to competitors. In addition, the unique ideas of the brand have let them come up with new products and enter the new market.

The partnership program of Nykaa is another major strength. Partnerships and collaborations with its dealers, suppliers, and other stakeholders.

Nykaa has a vast product portfolio that offers products in various categories. These are a few of the most critical strengths of the company.

Now, let’s talk about the weaknesses of Nykaa.

Weaknesses of Nykaa:

Nykaa is spending much more than average on research and development within the cosmetics industry.

In addition, a considerable amount of the company is rented instead of purchased, which leads to higher costs.

The company can meet its short-term financial obligations less than the industry average. The brand has not researched its market for the last two years.

Because of the low budget allotted for its quality control department compared to its competitors, the consistency might not remain the same in the future.

Opportunities for Nykaa:

The massive number of internet users worldwide signifies a vast opportunity to grow their presence online; by using the internet to communicate with its customers.

E-commerce growth can lead Nykaa to earn massive revenue by opening different online stores and making huge sales.

Social media users across the world are increasing. The three social media platforms, Instagram, Twitter, and Facebook, have shown the most significant number of rises in monthly active users.

Nykaa has a vast opportunity to use the medium for its advertisements.

Technology helps improve data to be collected on clients and enhances marketing efforts.

The population has been rising and will keep on increasing positively, which will raise the sales of potential clients that can be targeted.

With many niche markets expanding, Nykaa can fully benefit from the situation.

Customers within this industry are becoming more careful regarding their health, which is one of the segments growing daily.

As far as the competition part is concerned, we must analyze the threats to Nykaa Beauty.

Threats of Nykaa Beauty:

Technological advancements by competitors; modern technological developments by competitors within the beauty industry seriously threaten Nykaa.

New entries in the market are gaining a share by gaining existing companies’ market share. Therefore, it is a risk to Nykaa.

There has been a rise in competition within the industry, putting costs downwards. However, it could lead to less revenue.

Tastes and customer preferences are changing, putting pressure on companies to change their products to meet the demands of these consumers.

The substitute beauty products available in the market are also increasing, which is a risk for the whole industry as the use of existing products reduces.

Increased advertisements by competitors are a severe threat to Nykaa.

Challenges by Nykaa

As a late beauty and cosmetics industry entrant, Nykaa had to compete with several professional players. Myntra and Ajio are some of the essential players in the market.

Apart from this, the brand needs to create a USP in fashion.

When Nykaa was launched, its website would crash every time. When it sold 100 orders, its system would shut down. However, it fixed these problems and continued expanding its business.

Nykaa believes that one of the most difficult challenges for them is to be interesting for the customers; if it fails to offer an excellent experience, they will be disappointed.

In November 2019, a case against Nykaa by L’O’real alleged that Nykaa had breached copyright.

The allegation on Nykaa was because of the similarity that the French cosmetic tycoon L’O’real observed in some packaging of Nykaa, which was the same as Maybelline.

The court battle appeared long, so both the companies decided to settle terms between them, which the Delhi District and the High Court of Delhi approved.

Under the new agreement terms, L’O’real has approved the new, modified artwork designed by Nykaa.

Growth of Nykaa

Nykaa is a prominent eCommerce company specializing in selling cosmetics, fashion, and beauty items, which is already listed at a price higher than some of the oldest and largest Indian businesses like Bharat Petroleum, Coal India, Godrej, and SBI Card.

Nykaa became one of the leading eCommerce and retail beauty companies within four years.

Nykaa has over 17 million active monthly users and processes over 1.5 million orders. Here are some of the highlights of Nykaa that shows the brand’s growth:

• Nykaa’s total GMV increased 47% YoY to INR 2,155.8 in the 1st quarter of 2022-23.
• The personal and beauty care industry contributed almost 69% to Nykaa’s total GMV in Quarter 1.
• In Q1 FY23, Nykaa opened eight new physical stores, taking the total number of stores to 113 in 52 cities.
• Nykaa’s consolidated total profit increased 42% year-on-year (YoY) to INR 5 crores in Q1 FY23. However, the payoff was reduced by 33% every quarter from the previous March. Money from operations continued its upward curve, rising 41% YoY to INR 1,148.4 crores in Q1 FY23.

Nykaa has over 3.1 million SKUs accessible through its websites, apps, and stores.

Unfortunately, Nykaa had gone through a difficult stage during the COVID-19 lockdown. During this time, the company experienced a fall of up to 70% in its sales in April 2020.

However, the company reacted quickly, listed all the essential items efficiently to keep them in stock, and eliminated all non-deliverable products.

Instantly, the company started growing its physical stores by taking the facility of its hyperlocal delivery.

Very soon, Nykaa recovered from the side effects of the COVID-19 Pandemic.

Over 90% of what it was during the pandemic outbreak in 2020.

The brands that deal with unicorn fashion, cosmetics, and beauty items have experienced a major move of the clients towards the significant categories, including hair care and personal skin care items, which helped it improve its business faster than its competitors after the Coronavirus Pandemic.

Further, the brand’s shift from an online to an omnichannel shopping model also helped it improve its business.

All these changed the customer’s opinions about the brand and helped the brand attract audiences they could not see earlier.

On July 6, 2022, Nykaa announced its entry into the men’s innerwear category by naming GLOOT, a Nykaa brand for men’s innerwear and clothes belonging to the athleisure category.

As soon as they announced their plan to enter the men’s innerwear and athleisure category, the Nykaa shares started rising.

Upcoming Nykaa Sales

Nykaa Valentine’s Day Sale 2023

Valentine’s Day revolves around love and shopping. One place which can’t be left out when we talk about love and shopping is Nykaa. Nykaa’s Valentine’s Day 2023 sale is among the most awaited sales. The tentative date of this sale is February 6, 2023, to February 14, 2023.

Nykaa Women’s Day Sale 2023

Founded by women for women-since starting, Nykaa has been a women-centric brand. It is why they make sure it is one of the most significant sales by Nykaa. This sale will start from the 6th to the 8th of March, 2023.

Future Plans of Nykaa

The brand is focusing on expanding its offline business. It wants to grow its offline evidence by offline business by opening 180 offline stores across India by 2024.

Nykaa is interested in expanding its fulfillment centers nationwide to enhance customer experience. In addition, it has plans to grow its warehouse capacity by almost 40%.

With no signs of slowing down, Nykaa can become an empire on its own soon.

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NYKAA CASE STUDY: INTENSIVE DIGITAL MARKETING  STRATEGIES OF NYKAA

By  Sreeresh   |  Date  :  13-December-2022

    Home > Blog > Nykaa Case Study

When we think about an online platform that sells beauty products, most people immediately think about Nykaa. Have you wondered how Nykaa managed to achieve this? 

It is through their stunning marketing strategies that Nykaa achieved this level of popularity and success in the Indian market. In this article, you will read a detailed Nykaa case study and its digital marketing strategies.

How Nykaa’s journey started

That is when she found her niche and thought why not start a similar store in India she realised that there was no such store in India that sold beauty products even after the demand for them was high.

Even though e-commerce platforms like amazon, Flipkart, etc were leading e-commerce companies, none of them had an e-commerce store, especially for beauty and skin care products. 

Nykaa was started as a one-stop destination for all beauty products including luxury products. With Nykaa being introduced to Indian consumers, they no longer had to struggle to get their favourite beauty products as everything was available on Nykaa. 

Nykaa even has its in-house beauty products that have gained a lot of popularity among Indian consumers over time. 

Now that you have got an idea about the brand, let’s get into the case study of Nykaa.

Nykaa Case Study

Analysis of nykaa’s business model.

Nykaa is one of the very few brands that follow an inventory-based business model. While there is a great risk of expiration of products while following this model, the brand can ensure prompt delivery to its customers through the inventory business model. 

So, to understand how the inventory business model works, let’s see how Nykaa follows this model. 

• The company purchases goods directly from the manufacturers and stores the stock in its warehouses.
• Nykaa has their warehouses in Mumbai, New Delhi, Pune, Haryana, Bangalore and Kolkata. 
• When the customers make an order, the products are directly sold from these warehouses.
• If the products are damaged at the time of delivery, the company takes the whole responsibility.

It was after 5 years of operations that the company achieved its breakeven. At first, the cost spent by the company to acquire a customer used to be Rs.1000, which is now around 200-300 Rupees. 

Apart from its online stores, Nykaa has around 100 physical stores across India. And, Nykaa stores fall under two categories- Nykaa On-Trend and Nykaa Luxe. 

 In the Nykaa Luxe stores, you will find all luxury beauty brands and in the Nykaa On-trend stores, you will find products that are categorised based on their popularity and demand. 

Digital Marketing Strategies of Nykaa

We all spend a lot of time on Youtube, right? We watch different content on Youtube every day. Nykaa took advantage of this and started their own Youtube channel Nykaa TV. Currently, Nykaa has an immense 1.3 million subscribers on its youtube channel. 

This is not just a normal channel that shows the advertisements of the brand. Instead, the brand has collaborated with many influencers and posted useful beauty content on its Youtube channel, featuring these influencers. 

As this type of content is useful for the viewers and they will automatically subscribe to their channel and watch their content. 

The brand makes sure to post content regularly on its channel. Through their videos, they are not only giving their viewers about the beauty products and how to use them, but they are also helping them decide which products the consumers must get for themselves from Nykaa. 

Influencer Marketing of Nykaa

Nykaa makes use of influencer marketing while launching every new product. Each time Nykaa introduces a new product, they collaborate with influencers to promote its brand. The influencers create ‘ how to use ’ video content and also review the products.

• Content Marketing Strategy of Nykaa

A very important aspect of digital marketing is content marketing. Nykaa has always been able to provide quality content to its audience because of its strong content marketing strategies . They post interesting and creative content on their website.

The brand’s content across its websites, blogs, youtube, etc are quality contents with creative ideas. As Nykaa’s target audience fall under the age group 22-35, Nykaa has a set of young minds who can think and create content specifically for their target audience.  

Nykaa also has ranked its website on Google using SEO based on the Google ranking factors . They use top keywords and make sure that their products and blogs come first in the search result. 

• Social Media Marketing Strategy of Nykaa

We are currently in a period where social media runs the world. There would be hardly anyone who wouldn’t have at least one social media account. Instagram and Facebook are the most popular social media platforms, it is important for every brand to show its online presence through such social media platforms. 

Nykaa has also used social media platforms to maximise sales. They have a massive follower base on all social media platforms where they post regular content. The brand’s posts also have ‘shop now’ buttons on them to take the customers to their products page directly from any social media platform. 

 When we talk about social media marketing, email marketing is very important in it. Whenever new customers register with the Nykaa app or newsletter, their email id is collected and the customers are then regularly updated about their latest deals and prices. 

When I said email marketing, I did not mean email spam. The brand will analyse and segment its audience based on their engagement and emails are only sent to highly engaged customers. 

Nykaa’s splendid digital marketing strategies have made Nykaa one of the top 5 unicorn startups in India. The brand has a clear picture of its target audience and how to attract them. 

The brand never fails to introduce a variety of offers and discounts in the form of giveaways, contests, etc through its social media platforms. This helps the brand to generate leads across different geographical locations.

• Nykaa’s offers

Who doesn’t love discounts, right? So, through its social media platforms and website, Nykaa offers many coupon codes to its customers. Often, customers get many freebies from Nykaa when purchasing a product.

 Regular customers are also given small gifts along with their ordered products. All these have helped the brand attract more customers and in turn make their customers the brand advocates. 

• Nykaa Network

It was in the year 2018, that Nykaa launched the Nykaa Network. The Nykaa network is basically a beauty platform where subscribers can share their thoughts on beauty, give or seek beauty tips and advice, etc. 

Nykaa campaigns

 The brand, being owned by a woman, gives so much importance to the well-being and welfare of women. So, Nykaa has launched many campaigns over time to show its support for the women of India. Below are some of the campaigns launched by Nykaa. 

#WhatMakes YouBeautiful ft Laxmi Agarwal

   As I have mentioned above, Nykaa gives great importance to women and women’s empowerment. For this campaign, the brand joined hands with Laxmi Agarwal, an acid attack survivor to convey a message to women that they can be any kind of beauty they want and makeup is just a simple tool to express and celebrate themselves. 

The campaign mainly wanted to talk about the beauty standards that are already set by the world and how women often feel bad about themselves. Nykaa, through this campaign, urged women to take a stand for themselves and not let society judge them based on pre-set beauty standards.

#BreaktheHasgtag Ft. Taapse Pannu

  Nykaa collaborated with the Bollywood actress Tapsee Pannu to celebrate the multi-talented and multi-faceted women of India. Tapsee Pannu said that women play different roles in their lives as homemakers, entrepreneurs, actors, bosses, etc. So the campaign encourages women to break the stereotype and show the world that they are strong. 

Women’s Day Special Campaign by Nykaa

On women’s day, Nykaa organised a special event for women. There was a wellness section as part of the event, that was dedicated to mental health, fitness and skin analysis.

 In the skin analysis session, foundation shades that match the skin solar of the women taking the analysis will be recommended along with special skin care tips.

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Nykaa's Digital Marketing Strategy | Case Study

Are you also impressed with the surge of Nykaa in the market and curious to know the secret of successful Nykaa’s Digital Marketing Strategy? To your curiosity, we have compiled some facts and observed the marketing pattern of Nykaa which will help you to understand their strategy.

Today, we will cover the complete Omni-channel marketing strategies of Nykaa and how they made it outshine the crowd.

How does Nykaa start? | Evolution

Nykaa is an e-commerce website and app, a startup initiated by Falguni Nayar in the year 2012. It has its headquarter in Mumbai.

Nykaa started as an online beauty store dealing only in beauty and wellness products but sooner in 2015 it started to sell fashion products such as clothes and accessories under the name of “Nykaa Fashion”.

Moreover, in 2018, the company launched Nykaa Man, India’s first multi-brand e-commerce store for men’s grooming.

Nykaa has been in continuous growth since its starting age and got success early.

With the optimistically balanced Nykaa’s digital marketing strategy, it has started its 76 brick and mortar stores across the country.

In 2020, it was valued at around ₹85 billion (US$1.1 billion) making it the first unicorn startup headed by a woman in India.

All about Nykaa’s Digital Marketing Strategy

Nykaa’s has focused on digital marketing rather than on any other traditional marketing format. As their mode of sale was online, they did not waste their resources on high-end traditional marketing but targeted online customers only.

Nykaa’s niche was very much clear and so was their audience. Initially, its audience was only girls and ladies. Therefore, they were clear with their audience.

Later on, in 2018 when they started Nykaa Man, the audience expanded, including men.

But the major audience of Nykaa is women, which is understood, how? It has signed its brand ambassador Jahnvi Kapoor endorsing its beauty products.

Again, the market of Nykaa is online. They have launched their website and app, from which their customers can directly buy products. It claims over 2,00,000 of different 2,000 brands, which make it highly convenient for its customers to buy anything or everything from Nykaa. It offers domestic brands, international brands, luxury prestige brands, and premium brands.

Nykaa targeted its online audience through social media, search engines and worked almost on every digital marketing channel.

The well- balanced Digital Marketing Strategy of Nykaa

Nykaa has executed a well-balanced blend of all digital marketing and yet became successful in influencing people over the internet.

Social Media Marketing

The backbone of Nykaa’s digital marketing strategy is social media. It targets its social media’s audience by continuously engaging the people with their social media. From announcement of a new product to amazing deals, Nykaa has successfully grabbed everyone’s attention.

Impressively, Nykaa did not mixed up its different product line under on name on social media but created individual accounts for every product line that clearly define its niche and made it easy for the audience to reach out, what they’re looking for.

Influencer Marketing

Another impressive step taken by Nykaa is their Influencer Marketing. This strategy has shown how strong and smart their digital marketing team is.

Now, through their strong influencer marketing, they not only expanded the network of their audience but has achieved the credibility of the public. With the help of the influencers, Nykaa has peeped into almost every women’s profile.

Nykaa has leveraged online influencers to deliver the word “Nykaa” to their audience. Since every influencer on social media is promoting Nykaa, therefore people have developed a feeling of trust in Nykaa.

YouTube Marketing

YouTube marketing is yet another exceptional example of Nykaa’s digital marketing strategy that has shown an idol customer-oriented modern marketing.

They have managed to engage their audience by sharing videos in which influencers were seen teaching about makeup tricks & tips, showing skincare, and lot much.

Content Marketing

The content marketing used by the marketing team is done keeping in mind the reading lovers among their audience. Here, Nykaa was not only sharing its products but teaching about some genuine tips and healthy lifestyles.

These helpful blogs or content have helped Nykaa to broaden its reach on search engines. Like YouTube, it has created diverse content here as well such as makeup looks, beauty tips and personal care.

Email Marketing

Email Marketing is a very professional way of reaching out to your audience. It is usually done to provide after-sale services and to attain customer’s loyalty.

So what was Nykaa email marketing strategy?

No wonder, Nykaa has won the expectations of people by providing back to its customers through emails. Nykaa has been in constant touch with its customer through emails, either by sharing the date of their special “Pink Friday Sale” or telling them about the best products of the season.

Final Words:

Nykaa’s digital marketing strategy has impressed us a lot because they have not left any stone unturned. The company was very much clear with its goals and audience. The secret of their marketing strategy was that they treated their customers as the priority. The focus was not only to sell the products but to help people with what they were struggling with.

Nykaa’s digital marketing strategy is a great lesson for all the digital marketers out there. It has taught us that unless you are providing value to your customer, people are not giving you time.

The amazing buying ambience created by Nykaa gets a thumbs up from us.

Learn from such live examples and don’t wait to apply them to your strategies.

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SEO(Search Engine Optimization)

Nykaa’s organic traffic is 6Million and ranking on 244.3k keywords in India.

And the organic traffic is started increasing from last two years.

Nykaa ranking on top 3 position on Google for its main products keywords like hair color, lipstick, foundation, eyeliner, hair serum, highlighter, lip balm, hand wash etc….with many SERP features …

Nykaa competitors like Myntra and stylecraze are ranking on more keywords than Nykaa.

So their organic traffic is more than the Nykaa.

Content Marketing

Nykaa organized  the website in a very simplistic way . 

Want Makeup?

Toggle off to the Makeup section.

Any skin related product?

Any hair related product?

ohh need any appliance?

Looking for some natural ways to your beauty?

ohh you are a mom and need product for your baby?

Even Men have a separate section. Looks good. Isn’t it?

After the categories, you find the brand section. 

What if Nykaa’s user loves to purchase the products according to brands.

Nykaa has their own products and categories in NYKAA FASHION.

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Let’s now break down some of the marketing strategy of Naykaa  which we feel has definitely made the brand more marketable.

Nykaa has been serving wonderfully across the country since 2012.

It has an amazing set of product lines with genuine beauty goods. The brand owns over 3 lakh product variations spread across 1500 brands!

This is breathtaking right?

So how does Nykaa have got to do it all? It’s surely not an overnight journey and it takes a lot of work, dedication and foolproof strategies to make sure everything works in the long run.

Let’s now break down some of the marketing strategy of Nykaa which we feel has definitely made the brand more marketable.

Nykaa Content Marketing Strategy is insane .. 

….and one of the most important part of marketing funnel.

You will find each guide on each relevant topic…from hair dryer to lipstick shade…

From vitamin C(for glowing skin) to ageless beauty….

Nykaa place their content piece in between the products.

You can see that in between the hair sprays… how well Nykaa help users to get hair sprays for Luscious locks.

Social Media

In this world of changing evolutions, it’s necessary to keep up with the competitors and social media a great platform to run ads and campaigns for the page.

Existing on social media platforms makes the brands and services more feasible and far reaching. Twitter, facebook, instagram and youtube are renowned places to create audience awareness and make them more comfortable with the services provided by the brands.

With more number of viewers and interactions, online engagement improves which makes the brand more likeable as well as the contents are circulated likewise.

Other Marketing Strategy Of Nykaa

#1 deals on the way.

When your shopaholic friend can’t stop bragging about the amazing deals and offers revealed on the Nykaa site !

Looking good all the time is definitely a time consuming process and certainly not great for your pockets! But that doesn’t stop us from ordering everything WE DON’T NEED!

It’s just how we are right? We’ve all got expired lipsticks and liners which are as dry as summer.

Nykaa will cover you all the time. With loads of generous offers and coupons you will fall head over heels.

Providing enormous discounts have always been an extra mile that the online brands are willing to travel.

#2 Contest Alerts!

Nykaa also makes sure that you aren’t getting all bored and carried away with everyday boring work!

You can actually participate in their own featured contents, earn points and win great prizes.

There are many contests hosted by Nykaa brand to keep the activity alive and retain their customers. To make their experience more shareable and interesting.

It is surely a smartest way to make more connections and let people come over with joy and excitement. This will enhance their ideas and show off how creative people can be, it gives women the platform to showcase their talents with respect to beauty and self-confidence.

So why not do it?

#3 Girls Like To Swing!

No! We are not wearing that little-black-dress infront of our dads!

That’s so not cool. Well well well, no worries. Nykaa will get you dressed like a lost princess.

With a wide range of cool dresses, party outfits and your go-to ethnic vibe, you’ll be provided with lots and lots of options to choose from.

The bling, shimmer, sparkles! Just can’t get over it right?

Your wardrobe is going to look fab with some great styles which are definitely unique and made for you.

Starting with your lounge wear, work wear, professional styling, mid-night party outfits and for the Sanskari Nari in you. Nykaa has more to offer than beauty and wellness.

With all the wide reaching impacts, it has got the potential to make some awesome designs for you!

#4 Innovation

In order to keep yourself in the race, you have to innovate, bring more light and energy.

People get easily bored with routine styles and colours. It’s very important that you are always ready to bring in changes according to the tastes of consumers.

Especially in the beauty industry, trends and fashion change very rapidly and you must be well prepared to create new styles.

Nykaa constantly engages into more varieties of products. When it comes to lip decors, it has a huge collection of different colours so that the customers get different styles and more number of options.

It is quite difficult to keep changing the environment which changes so fast, but Nykaa does a great job by creating more shades, apparels, accessories.

#5 Nykaa Originals

With all that it has to offer relating to other established brands, Nykaa has its own beauty line as well.

It definitely has made a great impact on the overall sales of the entire services. The beauty line has a massive range of products which come off a great quality for buyers. 

They have created some great products with quite quirky names to make them more fancy. The quality and texture of the products also plays an important role in the main marketing.

Nykaa has boosted its game by introducing its own fashion line. People were instantly driven by this idea as it had already got itself a firm ground.

Being the best online retailer in the beauty brand selling genuine products. It has certainly kept everything in mind.

#6 Celebrity Crush

It’s very natural for us to buy the products which are specially endorsed by celebrities. We tend to go for such products as they enhance their beauty and usage.

Celebrities do have a card to play when it comes to attracting customers and marketing.

It has much affect over the buyers as it seems much branded and a fanciable item to purchase and flaunt.

If the same products are advertised by any other common person, the sales would have definitely dropped or considerably would have been less than what it is now.

With all the fame that comes along with celebrities it becomes easier for the brands to convince the people about how best quality is. Agree?

#7 Commercials

Advertising surely plays a major role in expansion of marketing results. This work comes really heavy as there are many modes to advertise your products. It is important for people to know your existence in order for them to come to you.

With a powerful commercial strategy it becomes easier for brands to reach out to customers and create active chains in the society. People always expect to be informed about new arrivals and any updates, so it’s very important to maximise the information.

#8 Nykaa Femina Beauty Awards

With its widespread community of great artists and professionals, it also has its wings with ramps and glamour.

Nykaa is also in partnership with Femina India which is a beauty runner for fashion shows. It does give the brand a lot of potential when it comes to sponsorship and huge advertisement.

With a professional tie-up as this one, Nykaa is benefitted from a lot more just ramp walks. This event is hosted every year to cherish the love for beauty and body confidence of various trends and body types.

It motivates many women to do more and feel more comfortable in their own skin. What better can they do for a woman?

This event is really intriguing with lots of charm and beauties to catch an eye for!

Final Thoughts On Marketing Strategy Of Nykaa

So  these are some amazing marketing strategy by Nykaa to compete in the market.

We as a  beauty digital marketing agency feel that Nykaa’s campaigns are quite captivating and engaging, what do you feel?

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Unveiling the Marketing Strategy of Nykaa: A Comprehensive Analysis

Introduction

In the realm of Indian e-commerce, Nykaa has emerged as a powerhouse, captivating the beauty, wellness, and fashion landscape. Founded in 2012 by Falguni Nayar, Nykaa has not only become a unicorn startup but has also diversified its offerings from an online-only model to an omnichannel giant. This case study, curated by Aditya Shastri and his student team from the IIDE's Post-Graduation Programme in Digital Marketing, delves into Nykaa's marketing strategy, pinpointing its strengths, identifying pain points, and proposing innovative solutions to enhance conversion rates.

Nykaa: A Glimpse into the Beauty Empire

Founder's vision.

Falguni Nayar, a former managing director at Kotak Mahindra Capital Company, envisioned Nykaa as a platform that goes beyond selling beauty products. In 2015, the company expanded its horizons, transforming into an omnichannel model and venturing into a diverse range of products beyond beauty.

Inventory and Valuation

Nykaa operates on an inventory-based model with warehouses strategically positioned across India. Valued at ₹85 billion (US$1.1 billion) in 2020, Nykaa achieved the significant milestone of being the first unicorn startup led by an Indian woman.

Offline Presence

In addition to its thriving online business, Nykaa boasts an offline presence with 76 brick-and-mortar stores nationwide. These include Nykaa Luxe, Nykaa On Trend, and Nykaa Beauty Kiosks, creating a seamless fusion of digital and physical retail experiences.

In-House Brands

Nykaa has strategically crafted a portfolio of in-house brands, ranging from Nykaa Naturals and Nykaa Cosmetics to Nykd by Nykaa and collaborations with renowned designers like Masaba Gupta.

Researching Nykaa's Marketing Strategy

Website analysis, user experience challenges.

The student team discovered that Nykaa's website faced challenges in user experience, with feedback suggesting it appeared overly female-centric. This raised concerns about inclusivity and potentially lowered the purchase intent among male visitors.

UI/UX Issues

The website analysis revealed a flat and non-user-friendly design, coupled with a poorly designed header. The team recognized the need for a more intuitive interface to enhance the overall user experience.

Social Media Marketing Analysis

Influencer marketing.

Nykaa strategically leverages social media platforms for brand promotion, particularly through influencer marketing. The brand collaborates with influencers to showcase products, create tutorials, and review new launches.

Gender-Targeted Content

Despite the significant male audience on social media platforms, the team observed a potential mismatch between the content and the diverse audience. Adjusting content to be more inclusive could be a key improvement.

SEO Analysis

Organic traffic.

Nykaa's blog, Beauty Book, plays a crucial role in driving organic traffic. The brand excels in SEO, ranking for a variety of keywords related to beauty, fashion, and specific product categories.

Domain Authority

With a Domain Authority (DA) of 55, Nykaa demonstrates a strong online presence. The team identified key non-branded keywords that contribute to Nykaa's high visibility, such as "dusky skin," "curly hair," and more.

GDN Analysis

Display ads.

The analysis of the Google Display Network (GDN) revealed that a small percentage of traffic (1.66%) is attributed to display ads. YouTube emerged as the leading contributor, showcasing the potential for video-based advertising.

App Analysis

User interface.

The team noticed similarities between Nykaa's app and website design, emphasizing flat-lay images. However, concerns were raised about the lack of personalization in the user interface, potentially affecting user engagement.

App Icon Consistency

Discrepancies were identified between the Android and App Store versions of the Nykaa app icon updates. Ensuring consistent updates across platforms could enhance brand cohesion.

Solutions for Nykaa's Marketing Strategy

Website strategy, personalization for first-time visitors.

To address the perception of a female-centric website, the team proposed an option for first-time visitors to choose their gender, creating a more personalized experience.

Landing Page Optimization

Suggestions included incorporating special discount codes on the landing page header to incentivize app downloads and implementing attractive pop-ups for new users with personalized offers.

Blog Ranking Strategy

The team proposed running ads for blogs to enhance visibility and drive more customers to popular products, ultimately fostering loyalty.

Checkout Page Discount Code

Creating urgency on the checkout page with time-limited discount codes aimed at preventing drop-offs and encouraging immediate purchases.

Social Media Marketing Strategy

Youtube story ads.

Recognizing the high view rate of YouTube story ads, the team recommended Nykaa capitalize on this platform by creating engaging story-focused content.

Engagement with Queries

Encouraging Nykaa to actively engage with user queries on both Nykaa's and influencer's pages, fostering a sense of community and trust.

Conversion Rate Optimization Strategy

Personalized push notifications.

Ensuring push notifications are personalized and relevant to avoid user irritation and enhance engagement.

Email Marketing Enhancements

Advocating for personalized email content, including the user's first name and specific intent, to align with urgency-inducing subject lines.

WhatsApp and SMS Marketing

Introducing WhatsApp marketing with relevant blog links and shopping links, along with user-specific SMS marketing featuring valid intent and special coupon codes.

SEO and SEM Improvements

Suggestions included refining SEO and SEM efforts to capture new users and prevent them from opting for competitor e-commerce brands.

Retargeting Strategies

Utilizing pixel codes for retargeting blog readers with creative ads emphasizing scarcity and urgency, driving conversions.

Conclusion: Nykaa's Path Forward

Nykaa, despite its dominance in the beauty and fashion space, recognizes the perpetual need for improvement in the ever-evolving digital landscape. This comprehensive analysis and the proposed strategies by the student team underscore the importance of refining digital marketing strategies to enhance conversion rates.

The Digital Marketing Landscape

In the era of rapid digitalization, large e-commerce brands like Nykaa are navigating a competitive landscape. The student team envisions a potential increase in Conversion Rate Optimization (CRO) from 0.5% to 2% by implementing their suggested strategies.

A Call for Digital Marketing Expertise

The case study echoes the significance of digital marketing and the growing demand for experts who can craft robust strategies. IIDE's Post Graduation Program in Digital Marketing stands as a testament to the evolving landscape and the need for skilled professionals.

Acknowledgments and Discussion

The insights provided by Aditya Shastri and the IIDE student team shed light on Nykaa's strengths and areas for enhancement. The case study serves as a valuable resource for marketers, entrepreneurs, and enthusiasts alike, fostering a deeper understanding of the intricate world of digital marketing.

As the digital landscape continues to evolve, the journey of Nykaa and similar e-commerce giants unfolds, presenting new challenges and opportunities. Engaging in discussions and sharing thoughts on this case study can further enrich our understanding of digital marketing strategies in the dynamic Indian market.

In conclusion, the case study on Nykaa's marketing strategy serves not only as an analysis of a thriving e-commerce giant but also as an educational tool for those navigating the complexities of the digital marketing terrain.

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Nykaa is an Indian brand of beauty and cosmetic products. It was founded by Falguni Nayyar in 2012. Since then, it has evolved into a lifestyle brand offering a curated selection of 1900+ brands and 1 lakh+ products across skincare, makeup, fragrance, health, haircare, etc.

It is a dominant player in the market and is continuously trying to adapt and innovate itself to align with consumer preferences. Its omnichannel approach, curated product selection, and focus on building a loyal community position it for sustained growth in the years to come.

Nykaa is a public company that was initially incorporated as FSN E-Commerce Ventures Private Limited and was listed on the stock exchange in 2021. Nykaa’s shareholding pattern as of September 2023:

Nykaa’s USP includes first-mover advantage, strong brand identity in the cosmetics industry, and a data-driven approach with personalised recommendations for customers. Nykaa’s target audience is primarily women aged 18–50 and beauty influencers. Nykaa has extensively used brand marketing and social media reach to build its customers’ base. The phrase “Be Bold and Be Good” drives Nykaa and the company is still working towards its goals.

Nykaa is a D2C brand of consumer products with 145 BPC stores and 9 fashion stores across 60 cities that work on an inventory-based model, i.e., the company buys the products from the manufacturers and stores them in warehouses. Products are sold either through online apps or in offline stores.

Nykaa also has a series of in-house brands in fashion and beauty. Some of them are Nykaa Cosmetics, Kay Beauty, and Nykaa Naturals. Nykaa Fashion: 20 Dresses, Nykd by Nykaa. The apparel and accessories verticals consist of 1,350 brands.

Source-Nykaa.com

The beauty brand Nykaa faces tough competition from Purplle, Myntra, Ajio, etc. As of December 2023, Nykaa’s valuation stood at $5.94 billion. In this blog, we will be analysing strengths, weaknesses, opportunities, and threats along with Nykaa’s marketing strategy.

SWOT Analysis

1. Nykaa captures a significant market share when it comes to online beauty. It created a strong customer base and brand loyalty, which gives the company’s first mover advantage.

2. Unlike generic e-commerce platforms, Nykaa offers a carefully curated range of authentic beauty and wellness products catering to diverse needs and preferences.

3. Nykaa’s engaging content, user-friendly interface, and social media presence fascinate the young generation of India.

4. Nykaa offers its customers a wide variety of products in various categories.

5. Nykaa has shown exponential and exemplary growth over the years with continuous expansion in its product lines.

1. Maintaining inventory and storage of beauty products can be complex and challenging, leading to stockouts and inefficiencies. This can impact the customer shopping experience negatively.

2. Nykaa also faces tough competition from other D2C brands and this can put the company under immense pressure, thereby affecting the margins.

3. No free delivery below INR 700 can make it unattractive to customers with low budgets.

4. Nykaa hardly spends on research and development activities, which can limit its capacity to compete with other beauty brands, and as a retail business with both offline and online presence, functioning without proper R&D can lead to operational challenges.

5. Overdependence on the female demographic can affect the business.

Opportunities

1. Nykaa can tap international markets, which can help the company increase its customer base and revenue.

2. Acquisitions of niche brands can cater to the needs of customers and create a new customer base.

3. The existing loyalty programme of the brand can be enhanced and improved with some exclusive offerings, which can eventually help boost customer retention.

4. Nykaa can further invest in AI-powered solutions for product recommendations, chatbot customer service, and AR/VR beauty consultations. This can improve operational efficiency and potential customers.

1. Tough competition from other brands is a threat for Nykaa, as this can move their price-conscious customers to other websites.

2. Evolving consumer preferences and buying behaviour can be a threat to the beauty brand if it does not align with the changing trend.

3. At the time of listing, the company’s valuation stood at $15.36 billion. A significant decline can be seen in the valuation of the company post-listing. Further, as of December 2023, the company is trading at a P/E of INR 2,483, which is high as compared to its peers.

4. Evolving technologies like augmented reality (AR) and virtual reality (VR) offer try-on methods to customers. If not implemented with a seamless experience, it can be a threat to Nykaa.

Marketing Strategies of Nykaa

1. Product Strategy

Nykaa is currently offering a diverse range of 1500+ beauty and wellness products. The company has also recently launched its product brand, which is adding an extra dimension to its product basket. Nykaa aims to be a one-stop destination for people of all age groups and offers beauty products from both national and international brands with a presence across major markets like the U.A.E., Mauritius and the U.S.A.

It tries to offer curated products suitable for various skin tones and types to its customers that align with their needs and are also in trend. The brand also launches limited-edition products and collaborates with celebrities and influencers to create exclusive collections. It personalizes the product experience by offering recommendations based on individual purchase histories and reviews from other users. The brand also promotes environment-friendly packaging to promote sustainability.

Nykaa has also launched Nykaa fashion and Nykaa men. We can say that the product strategy of Nykaa is dynamic.

2. Pricing Strategy

The company generally focuses on cost-based pricing, where it analyses the cost of acquiring and distributing products and adds a markup to decide the final price, and prestige pricing, where the company has collaborated with different luxury brands like MAC, Anamoly, Aveda, etc. to justify the higher prices.

Nykaa runs promotional campaigns, discounts, and special offers during festive sales to attract customers and drive sales. It also offers diverse payment options, including cash on delivery, credit card EMI, and buy-now-pay-later schemes, making purchases accessible to a broader customer base.

3. Place / Distribution Strategy

Nykaa’s omnichannel presence has helped the company evolve over the years. The brand provides three options to customers. They can visit either Nykaa’s luxe store for a premium shopping experience or on-trend stores for budget shopping. The third option is to buy products online via Nykaa’s web and mobile app.

In recent years, the company has tried to expand its network. It has collaborated with different logistics partners to offer flexible delivery options like express delivery and scheduled delivery in some locations.

4. Promotion Strategy

Nykaa engages itself in blog posts, makeup tutorials on Youtube and articles for spreading informative content among the audience. This creates a sense of trust among the customers. The company also collaborates with influencers to promote its trendy products. It sends targeted emails to customers based on their purchase history, preferences, and interests, offering personalized recommendations and promotions.

Nykaa leverages influencers through its customised creator-focused product and program called Nykaa affiliate program, which enables external content creators to publish content on behalf of the company across several digital platforms. Further, the company continuously post deals and giveaway alerts on social sites to attract customers.

Nykaa’s journey from a fledgling e-commerce platform offering beauty products to a platform that innovates with vision and is adaptable as per the choices and preferences of the customer is phenomenal. The brand knows well how to capitalise on opportunities. It has carved out a significant niche in the Indian market and has the potential to further expand its business, shaping the future of the beauty market.

If you have enjoyed reading our blog, check out the related case study: Flipkart Case Study- Business Model and Marketing Strategy .

Frequently Asked Questions (FAQs)

1. Who founded Nykaa?

Ans. Nykaa was founded by Falguni Nayyar in 2012.

2. Is Nykaa target market only for females?

Ans. No, Nykaa is not only for females; it also sells grooming and personal care products for men.

3. Is Nykaa a public company?

Ans. Yes, Nykaa is a public company listed on the NSE & BSE.

4. Who are the competitors of Nykaa?

Ans. Nykaa faces tough competition from Purplle, Myntra, Ajio, etc.

5. What is the biggest sale introduced by Nykaa ?

Ans. The biggest sale of Nykaa is the “Nykaa Pink Friday sale”.

Disclaimer : The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.

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What marketing strategy makes Nykaa so unique?

What makes Nykaa Unique? What is the Reason Behind the Success of India’s first Unicorn Beauty E-Commerce Startup? Nykaa’s story is a Case Study in Innovation, leveraging its 360 degrees in marketing strategy.

In the beauty and cosmetic industry of over 1.3 lakh+ products and 1500+ brands, clutter is hard to break. Getting noticed and creating a profitable beauty brand is often years of time, money, and investment.

The Indian beauty industry is a significantly expanding market. This expansion went hand in hand with an increase in the per capita spending on beauty and personal care products. Despite its potential in the ever-growing e-commerce industry, the beauty market accounted for only a marginal share of online sales.

This was the scenario, till Nykaa.com emerged and revolutionized the beauty e-commerce business. It created a storm in the Indian beauty markets making all makeup, beauty, and skincare brands available under one online shop – Nykaa.com .

It became the only Indian beauty startup to attain Unicorn status in less than 8 years with the latest round of funding from Steadview Capital.  The Indian online marketplace Nykaa experienced exponential growth since 2017. Starting with a revenue of only a little more than two billion Indian rupees, the yearly revenue amounted to 18.6 billion rupees in the fiscal year 2020. CAGR of 105%, wow!!

So, you may be wondering, what’s so special about an aggregator website that sells beauty products? A lot went behind the super success of Nykaa, read on below.

Read: Q-Commerce, the new age of E-commerce

How did nykaa start.

Once Falguni Nayar walked into a Sephora store abroad and was amazed to see the variety of beauty products available under one roof. To top it all off, there were trusted beauty advisors and consultants all around to guide on customer needs. There were free trials, makeovers, and a lot of talk on the beauty all around the store. It was a woman’s paradise, in short!

Indian women didn’t have access to this kind of beauty product variety, advice, and unbiased guidance. Makeup buying meant going to the local drug store or the cosmetics shop where the staff was barely trained. Even if they were, they would be pitching products from one particular brand, that they represented. The higher-end brands would often be nested in malls and hi-street retail markets, offering little choice to the consumer. Falguni saw an opportunity.

She quit her senior leadership role at Kotak Mahindra and founded Nykaa at the age of 50 in 2012. The rest of course is history.

The company hit the break-even point in 2017 and has been growing YoY in profits since then. There has been no looking back.

Marketing Strategy- Making Nykaa Unique

Sheer variety and top international brands.

Nykaa houses the largest collection of beauty brands in India with over 1300+ brands. The sheer complexity of maintaining lakhs of products with new releases and discontinued versions is a story for another day.

Nykaa didn’t only house the top Indian brands, but since 2018 they have been bringing the best of international brands to India.

In fact, some of the best Instagram beauty trend products have been launched on Nykaa and are exclusively available on their website and app. Popular international brands like Huda Beauty, Glam Glow, MAC, K-Brands, and even Farsali’s Unicorn Tears are on Nykaa first.

Nykaa also houses its own makeup and skin products line on the website which is priced well and is a big hit.

View this post on Instagram A post shared by Nykaa (@mynykaa)

A Promise of Authenticity and Quality

Over the years, Nykaa has become synonymous with buying makeup online. Their popular sales including the Big Nykaa Sale offer great deals on beauty products that are not available offline under one roof.

They have carved a unique niche for themselves and the biggest one is a promise of Authenticity. Nykaa stamps each product with an authenticity stamp and has helped put the fear of buying duplicate or counterfeit products to rest.

It is a big reality of the beauty industry where cheap fakes of popular brands find their way into stores. Expired and fake products can cause much more harm in this industry, often causing high damage. Nykaa has been able to build a strong reputation with fantastic quality control. Even the product expiry is mentioned on the website and app.

Nykaa’s Innovative Business Model

To manage so many products and deliver them across India, requires impeccable logistics. Nykaa has the inventory model strategy and believes in being the customer first.

They themselves stock all brands and products in their warehouses across India and ship them directly to consumers. This e-commerce model helps them control last-mile delivery and conduct quality checks, storing products in a safe environment.

Try and Buy Product Strategy

Nykaa’s minis became an instant hit with the Indian audience. What these minis provided were small-sized trial packs of larger-sized beauty products.

What this gave was an opportunity for the value-conscious Indian consumer to try out smaller quantities of an expensive beauty product. It not only lets the Indian female with average income access brands well out of reach at a comfortable price point but also ensured that she invested in the product after trying it out.

The minis became such a rage that a lot of popular international brands like MAC and Benefit Cosmetics launched their own minis on Nykaa.

A Strong Digital, Content, and Influencer Marketing Strategy of Nykaa

They leveraged digital to reach out to their target consumer in the age group of 18-35 years. Nykaa’s blog content and detailed reviews section allow women to discover more about a product than what’s on the label.

A large part of the beauty industry involves product education, correct usage, and custom application for accentuating beauty. They leveraged top beauty influencers to create digital content explaining how to use beauty products and also partnered with many top brands for this. It’s run under Nykaa TV now. Janhvi Kapoor is Nykaa’s own brand ambassador as of now and promotes it across print, electronic and digital media.

What’s Next on the Beauti-ful Road to Success?

While there’s a lot that can be credited to the success of Nykaa, the best part is that they have been quick to adapt to trends. The beauty industry rests heavily today on Instagram influencers, millennials, and the latest trends. Staying updated has become part of their DNA.

They are one of the few brands that expanded successfully into offline retail and have a network of over 70+ stores in India. They plan to open 180 more stores in the next 5 years. Add to this the launch of Nykaa Luxe (premium brands) and Nykaa Fashion (apparel and accessories), they are well on their way to becoming the Amazon of the beauty industry.

Nykaa was valued at more than 100 billion Indian rupees as of March 2020, up from about 50 billion rupees in 2019 The Indian BPC market has been forecast to have a value of 23 billion U.S. dollars by 2022.

Nykaa went public in Nov’21 and the stock started trading at a premium of over 82% at Rs.2,054 per share on the NSE as compared to its IPO issue price of Rs. 1,125 apiece. Its market capitalization crossed ₹1 lakh crore in early deals. The stock closed over 10% higher at Rs.2,208 per share on its first day on the BSE. Unfortunately the stock has failed to show any return for initial investors.

Nykaa said it plans to use the proceeds from the IPO for expansion, by setting up new retail stores and establishing new warehouses. The e-commerce beauty giant also plans to retire some of its debt, which should bring down interest costs, and further shore up its profitability.

Interested in reading more  Marketing Strategy Stories ? Check out our collection.

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A Black Coffee Nazi, working as a digital marketer with nearly 8 years of marketing experience across top brands. I like addictive conversation, ramblings on human psychology, and look forward to writing my book someday. Connect with me on LinkedIn for all things digital and marketing.

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The Nykaa Marketing Strategy: Catalyzing it to a leading beauty eCommerce giant

Learn about nykaa's iconic marketing strategy and advertising campaigns. read how nykaa aces the 4ps of marketing mix - product, price, promotion & placement..

• overview#goto" data-overview-topic-param="business">Nyka's Business Model
• overview#goto" data-overview-topic-param="strategy">Nykaa's Marketing Strategy
• overview#goto" data-overview-topic-param="digital">Digital Marketing Campaigns
• overview#goto" data-overview-topic-param="key">Key Takeaways

With over 1 million followers on Instagram and exponential growth in revenue, it's no wonder Nykaa is one of India's top beauty e-commerce websites. Nykaa was established in 2012 by Falguni Nayar, a former managing director at Kotak Mahindra Capital Company. Since then, the brand has revolutionized the beauty market in India and its marketing strategy has been an integral part of that.  

Image source: Forbes

From leveraging influencers to delivering great customer service, Nykaa’s success story can teach us all a thing or two about successful marketing for e-commerce businesses. In this article, you’ll explore the secrets behind Nykaa's success and get inspired by its strategies for your own business.

Image source: Nykaa.com

Nykaa sells its beauty products through its interactive beauty website, its online store, and 80+ physical locations. The company's specialty involves beauty and fashion products, bath and body, luxury, and wellness products for both men and women. In December 2020, Nykaa Fashion established its first offline presence in Delhi, making the beauty and fashion industries multichannel.

Today, there are over 60 Nykaa stores across India and in 2021, it IPO'ed in Indian markets with a valuation of 52,574 crores.

The business model of Nykaa beauty

Nykaa beauty operates a direct-to-consumer e-commerce model. All products are purchased directly from suppliers, and the company stores their goods own warehouses. Third party vendors can sell items on Nykaa's marketplace, which is helpful because it means that they never have to worry about fraudulent products slipping through the cracks. Nykaa has warehouses in Delhi, Mumbai, Pune, Haryana, Kolkata and Bengaluru - all of which store items for sale on Nykaa's website

Nykaa introduces new products according to their popularity, with beauty assistants available at their kiosks to assist beginners in choosing the right products from a variety of brands. High-profit margins can be achieved with the inventory business model, and any product damage is the company's responsibility. Furthermore, Nykaa fashion verifies the authenticity of its beauty products and adheres to fair pricing.

What is the Nykaa marketing strategy?

Let us understand the Nykaa marketing strategy via the 4P's of marketing anaylis:

One of the most important aspects of Nykaa's marketing strategy is their focus on product quality. They invest heavily in research and brand development to ensure that their products are souced at the best they can be. This commitment to quality has helped them build a strong reputation amongst consumers and industry experts.

This focus on product quality and multi-channel promotion has helped Nykaa become one of India's leading beauty retailers. Their products are now available in over 1000 stores across the country, and they plan to expand internationally soon.

Cost Based Pricing

With a cost-based pricing strategy, Nykaa beauty can determine the cost of producing the product and mark up accordingly.

Value Based Pricing

Since its inception in 2014, Nykaa has offered competitive prices on all its products. This has allowed the company to grow significantly, as customers always look for a great deal. In addition, Nykaa offers free shipping on orders over Rs. 500, which furthers entices customer development . Nykaa relies on Hillsbrad Darnassian Trade Goods and other cost-effective methods to keep prices low. This ensures that customers can purchase their desired products without spending too much money.

Offers and discounts

Nykaa has a number of seasonal discounts and offers available to users of its ecommerce platform. The Pink Friday sale is Nykaa's biggest event, offering huge discounts on a variety of brands to entice customers. The special pink Friday sales offer numerous discounts on nykaa's products.

Image source: Nykaa Facebook

Nykaa has focused heavily on various social media platforms and television as part of its marketing strategy in recent years. This has resulted in high levels of engagement from Nykaa's audience.

Nykaa's content marketing strategy

The company's content marketing strategy is also very practical, which includes creating high-quality video content and blogs that resonates with its target audience. In order to creatively utilize the power of content, the brand has assembled a team of enthusiastic young professionals to create a unique content strategy. The brand creates video content and blogs on multiple digital platforms and social media pages thus forming a huge customer base.

Youtube Marketing: Nykaa TV

The Nykaa marketing strategy consists of an extensive YouTube marketing scheme. Nykaa has a YouTube channel called “Nykaa TV” that features makeup tutorials, product reviews, and behind-the-scenes looks at Nykaa's operations.

The company's YouTube channel doesn't sell its products; instead, it produces consumable content such as beauty, personal care tips, makeup hacks, makeup tips and more. Their Youtube videos also help viewers and their customers to to know more about wellness products throughtheir "how-to" video content.

Image source: Nykaa TV

The brand generates video content, which mainly includes beauty horoscopes, bridal makeup techniques, celebrity beauty secrets, etc. As well as providing how-to videos, the firm also uses YouTube ads to reach out to its customers to assist them with selecting the right products and utilizing them properly.

Website marketing: Nykaa Beauty book

Nykaa offers a high range of consumable content to its target audience converting them into loyal customers. The company's strong focus on content is evident in its "Nykaa beauty book" blog. This blog contains helpful articles that teach readers about various aspects of beauty, including personal care, hair care, makeup tutorials, and more.

Social media platforms

The company has multiple accounts on almost all social media platforms like Instagram , twitter , etc.

As per SimilarWeb, Nykaa's marketing strategy is seen to work via its YouTube channel and influencer marketing on social media platforms. Nykaa posts product-oriented content on its social media handles and invests in influencer marketing for influencers to create tutorials, and look at or review new brand launches.

Due to its strong online presence, the Indian e-commerce brand has utilized multiple of the best digital marketing services to acquire all-embracing recognition. Nykaa manages to receive over 15,000 orders every single day on its e-commerce apparel store.

To put it all together, Nykaa's social media marketing strategy is highly customer-centric. Since Nykaa understands its target customers, it is easy for them to work on attracting them.

Influencer Marketing via brand ambassador campaigns

A large part of Nykaa's success can be attributed to its savvy marketing strategy, which includes influencer marketing.

Katrina Kaif is Nykaa's brand ambassador and has been a key part of the company's marketing campaigns. Katrina is one of India's most popular and followed celebrities, and her endorsement has helped Nykaa reach a wider audience.

Image source: FortuneIndia

Nykaa's influencer marketing remains vital to successfully build brand value and brand visibility. The company plans to continue working with Katrina Kaif and other influencers to maintain its growth trajectory.

Image source: screenshot from Nykaabeauty

Search engine optimization

One way Nykaa has used SEO to its advantage is by using keywords effectively. They have done an extensive research to identify the keywords people are searching for when looking for beauty products. They've used those keywords throughout their website, from the titles of their blog posts to the product descriptions on their product pages. This has helped them attract people who are actually interested in what they're selling, which has been key to their growth.

An interesting insight from its top keywords analysis reveals how influencer marketing via Kartina Kaif's Kay Beauty brand is helping it generate traffic.

Nykaa's Blog

Another way Nykaa has used SEO is through its own blog. Nykaa produces blogs that involves beauty hacks , from makeup tips to skin care advice. But beyond just being informative, Nykaa's blog posts are also optimized for search engine positioning . This means that when people search for topics related to beauty, Nykaa's articles are likely to come up near the top of the results pages.

Nykaa's placement strategy is to sell its products through company-operated stores, licensed stores, ecommerce, supermarkets, and hypermarkets.

With two store formats: Nykaa Luxe and Nykaa On-Trend, Nykaa serves both rich and middle-class customers. Nykaa Luxe and Nykaa on-trend products are available exclusively through Nykaa's online stores, in-house stores, and a few select luxury retailers.

Nykaa partners with major international brands, including L'oreal, Maybelline and Revlon, to bring luxury products to the Indian market at an affordable price point.

Image source: Vogue India

Nykaa's ecommerce site is one of the top beauty sites in India and receives over  1.5 million orders per month . Nykaa products are also available on Amazon India and Flipkart. Supermarkets and hypermarkets such as Big Bazaar and Reliance Fresh carry a limited selection of Nykaa products.

Nykaa's top Digital Marketing Campaigns

Nykaa femina awards.

Nykaa Femina Awards is an annual event that recognizes and celebrates the achievement of women in India. The awards are given in various categories like beauty, business, entertainment, and more. The Nykaa Femina Awards were first held in 2013 and have since become one of the most prestigious events for women in India.

Image sources: femina.in

The award ceremony is usually held in Mumbai and plays host to some of the biggest names in India, from celebrities to businesswomen. The awards are given to recognize excellence in various fields and inspire others to strive for success.

Image source: Femina.in

The awards are judged by a panel of esteemed judges, including experts in their respective fields, who review nominations submitted by the public. Several categories are divided between awards in beauty, lifestyle, entertainment, business, and leadership categories. Several international brands also partner with this widely popular event Femina yearly to showcase their products.

#AllThatYouLove with Nykaa!

Image source: MyNykaa

Nykaa Beauty launched one of its largest beauty events, featuring Janhvi Kapoor. The ad is called "All That You Love," It celebrates its customers' unabashed relationships with its beauty products. Nykaa has become a source of joy for women across the country to find and access all they love by offering fast, convenient, and worry-free shoppinexperiences.

Key Takeaways from Nykaa for entrepreneurs

As one of the first online-only beauty retailers in India, Nykaa has grown its business by following key marketing strategies across video and influencer marketing.

For entrepreneurs looking to build their own businesses, here are some key takeaways from Nykaa's marketing strategy:

Build a strong direct-to-consumer relationship

Nykaa has built a strong relationship with its consumers by understanding their needs and preferences. The company offers personalized recommendations and provides useful content on its website and social media platforms. This helps build trust and loyalty among customers.

Nykaa’s CMO, Hitesh Malhotra, mentioned in one interview that often times the customer of Nykaa is a brand ambassador who promotes the brand by word of mouth. Hence, The customers have a significant role in creating the Nykaa network

Invest in digital marketing

Given that most of Nykaa's customers are online, the company has invested heavily in digital marketing. It uses various channels such as search engine optimization, social media advertising, and email marketing to reach its target audience.

Use data to drive decision-making

Nykaa uses data analytics to understand consumer behavior and trends associated with the beauty industry. This helps them build a strong marketing strategy around product assortment, pricing, promotions, and other aspects of their business process . As a result, they are able to offer products and services that are relevant to their target market.

The Bottom Line

Nykaa has blended creativity with data-driven decision-making to craft a strong marketing strategy that has proven to be a significant factor behind their success.

Other companies can learn from this in-house brand and create tailored campaigns that capitalize on their strengths and exploit weaknesses to break into new markets or increase market share. The right approach isn’t always evident – but if you look closely enough, you too might find the keystone to your own success story. We would suggest you to read our marketing case study on Nike which also uses similar product-focused marketing strategy.

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Marketing to Manage Customer Experience: The Case of Nykaa

• By: Uttam Chakraborty , K.G. Sofi Dinesh & G. Rejikumar
• Publisher: SAGE Publications: SAGE Business Cases Originals
• Series: Customer experience
• Publication year: 2023
• Online pub date: January 02, 2023
• Discipline: Experience Marketing , Marketing Channels , Marketing Decision Making
• DOI: https:// doi. org/10.4135/9781529620405
• Keywords: beauty , branding , competitive advantage , consumers , customer relationship management , customers , decision making , marketing strategy , personal care , social media Show all Show less
• Contains: Teaching Notes Region: Southern Asia Industry: Advertising and market research | Retail trade, except of motor vehicles and motorcycles Organization: Nykaa Organization Size: Large info Online ISBN: 9781529620405 Copyright: © Uttam Chakraborty, K.G.Sofi Dinesh, and G. Rejikumar More information Less information

Teaching Notes

With the pandemic tightening its grip across the globe, Indian cosmetics firm Nykaa focused its attention on serving consumers through its online stores. It faced stiff challenges from both organized and unorganized online retailers, such as Amazon and Flipkart, which also had cosmetic sections. Nykaa was successful in generating demand for its cosmetic products through its online shopping stores due to its sheer brand value during the pandemic. One challenge the company faced was ensuring that they had efficient processes, products, and facilities to cover each step from demand generation to fulfillment. This challenge spoke to Nykaa’s overarching challenge of supporting positive customer experiences and meeting consumer expectations with online shopping during the pandemic and beyond. The case encourages students to understand the journey of consumer decision making and the importance of service design and customer touch points in enhancing customer experience. It also promotes understanding of the fact that positive customer experience influences the purchase decisions of customers and enriches the competitive advantages of the firm.

Learning Outcomes

By the end of this case study, students will be able to:

• examine the importance of positive customer experience during the decision-making journey;
• discuss the importance of customer touch points in enhancing customer experience;
• analyze the role of positive customer experiences in imparting a competitive advantage to firms; and
• evaluate the importance of service design in enhancing customer experience.

Introduction

“Our goal is to bring inspiration and joy to people, everywhere, everyday”

—Falguni Nayar

Founder, Nykaa

Sipping her coffee in the company cafeteria, Ruchika, a long-term loyal employee with Nykaa, looked perturbed. It was unusual for Ruchika, who worked in the logistics department of the Indian beauty and personal care company, to be anything but happy with her favorite cup of coffee in hand. But Ruchika was worried about the long list of pending orders that needed to be delivered to customers without further delay. Demand for cosmetic products, especially products available through Nykaa’s online store, had surged during the pandemic and the ensuing lockdown, but the company did not have a robust logistic network to meet this demand and Ruchika was worried about the negative effects it would have on customer experience.

The Covid-19 pandemic and ensuing dependence on online services drastically changed consumers’ buying behavior toward cosmetic products. Slowly and steadily, consumers shifted their habits, relying less on physical stores to purchase beauty and cosmetic products and more on digital platforms. The pandemic created a breeding ground of mobility issues that motivated consumers, especially women, to turn to digital platforms for their beauty and cosmetic requirements. Situational factors, such as time constraints, distance, need for novelty, attractiveness of alternative products, and lack of mobility had persuaded consumers to shop online ( Dellaert & Ruyter, 2004 ).

The situation was conducive for Nykaa, which in 2012 started as an online cosmetic store selling beauty items in various categories, including hair, skincare, makeup, personal care, luxe, fragrances, and appliances. Nykaa also operated through its wide network of retail stores spread across major cities in India and became popular as a cosmetic brand with the help of these colorful retail outlets that offered value for money to consumers at competitive prices. The attractive retail outlets also helped in growing its consumer base. Nykaa had focused on customer experience in online and in-person retail to differentiate its brand, and aimed to understand its customers and track and measure their experiences to inform the company’s strategies to meet or exceed customer expectations.

Ruchika pondered whether Nykaa effectively promoted and leveraged customer experience techniques to improve its competitive advantage in the changing landscape. She wondered how Nykaa could promote and leverage positive customer experience during the pandemic without a robust logistic network in place. Would a robust logistic network be enough to improve the company’s competitive advantage? Ruchika decided to meet with her colleague in the customer care department to discuss her concerns around Nykaa’s challenges.

Nykaa’s Vision, Mission, and Market

Ruchika took a moment to collect her thoughts before meeting with her colleague and reflected upon Nykaa’s background. Nykaa, an e-commerce beauty and personal care company, was founded in India by Falguni Nayar and was headquartered in Mumbai. The company was the first to consolidate beauty and personal care products on a large-scale e-commerce platform. It had an omni-channel approach to selling products that included a highly successful mobile application and over 76 offline stores spread across India at strategic locations. The expansion of the company from online to offline stores was carried out in 2015 and as of 2022 they sold over 20,000 products from approximately 2,000 beauty and personal care brands across their platforms. The company name was coined from the Sanskrit word “Nayaka,” which can be translated as “the one under the spotlight.” The vision of Nykaa was to “Bring inspiration and joy to people, everywhere and every day,” and the company started with a focus on the celebration of women and their needs. Ruchika was proud of the company’s mission to create a world in which finely curated and authentic products and services could be easily accessed by customers to bring delight and elevation of the human spirit to their life.

Upon meeting with her customer care colleague, Meera, Ruchika learned that Nykaa had capitalized on the growing beauty market with its 2012 launch and 2015 expansion. The Indian beauty market emerged as a huge market with great potential for growth and prosperity in the future, including the potential to be the leader in the global cosmetics industry as the Indian beauty industry was slated to grow to almost USD 2.68 billion ( Green the new norm, 2017 ). According to Mr. Rishabh Mariwala, director at Kaya Ltd,

“In the luxury section, the cosmopolitan clientele is developed…The shopper has seen various brands on their movements abroad where the market is multiplied with natural brands. In this way, the brands into the premium segment will positively see development among the Indian market” ( Bali & Acharya, 2021 ).

The growth of the Indian beauty market was stimulated by the rise of social media, which saw celebrities and fashion influencers having a wide scale of influence on the general population of the country. Improving socio-economic standards and demographic growth, coupled with the massive development of the digital and manufacturing sectors, also increased the demand for quality cosmetic products in India as the market expanded from urban areas to all parts of the country. The demand was met by the rise of online cosmetics and beauty products shopping platforms such as Nykaa, which enabled customers to browse through and access various popular international and luxury beauty brands from their smartphones and receive the products at their doorstep. The beauty industry was rapidly catching up with the global leaders, the United States and China, which had revenues upwards of USD 62 and 69 billion respectively. The Indian market was assessed to be worth USD 11 billion in 2017, with the projections for 2025 being as high as USD 30 billion.

After establishing its online sales in 2012, Nykaa launched omni-channel sales in 2015 and introduced three primary retail formats—Luxe, On Trend, and kiosks—in major cities across the country. Online or at one of Nykaa’s brick-and-mortar stores, customers could purchase Nykaa items. Higher range international beauty brands were offered in the Luxe format. Category-based product selection was the focus of Nykaa On Trend. There were beauty assistants available at the brand kiosks to help newbies choose the right products from a variety of brands. Aside from that, the company ensured the authenticity of its products, charged fairly, and remained responsible for any product damage.

There were over 80 physical stores and a mobile app for Nykaa’s products, which included cosmetics, skincare, haircare, fragrances, body care, and wellness items for both genders. In December 2020, Nykaa Fashion established its first brick-and-mortar store in Delhi, making the fashion industry omni-channel.

The company also launched a beauty blog, how-to videos, essays authored by industry experts, and an online magazine on the Nykaa site. Customers could call the Nykaa helpdesk for assistance in selecting products and services that met their individual requirements. In 2020, the company launched Nykaa PRO, an app service that provides exclusive deals to beauty professionals. Meera and Ruchika agreed that Nykaa was poised to capitalize on the growth potential of the Indian beauty market, but the Covid-19 pandemic brought new challenges.

Nykaa’s Pandemic Challenges from 2020–2021

Meera noted that in the wake of the Covid-19 crisis, which hurt offline retailers badly, Nykaa expected its online sales to recover faster than its physical stores. Since they sold necessities the government deemed essential on their website, they remained open during the lockdown and beyond. Nykaa faced stiff challenges from both organized and unorganized online retailers such as Amazon and Flipkart, which also had cosmetic sections, but was successful in generating demand for its cosmetic products due to its sheer brand value through its online retail stores during the pandemic.

When the lockdown first started, Nykaa sold their essential products as well as masks, PPE kits, and hand sanitizers. Ruchika recalled that they were asked why Nykaa didn't sell vegetable baskets on their website. Meera nodded and said that the company chose to stay focused on their essentials, knowing what their business was and what they were good at (and knowing they would not be good at delivering open vegetable baskets). Nykaa focused on being a voice for local brands and products, knowing that brands made in India could become very popular very quickly ( Martins, 2020 ). In a year or two, Meera pointed out that they could become very popular brands and start to show up in the top 20 to 30 on Nykaa ( Sharma & Gooptu, 2020 ).

Ruchika noted that the challenge the company faced during the pandemic was ensuring that the products consumers demanded online were available for shipping. Moreover, the process from demand generation to fulfillment required reliable storage, transportation, and distribution facilities. Keeping this fact in mind, Nykaa came up with the idea of hyperlocal deliveries during the pandemic, which meant delivering essential items like shampoo and moisturizers from their stores. As an inventory-led retailer, hyperlocal delivery of essentials worked well for Nykaa and helped the company overcome issues with supply chains and getting additional inventory. Their shops turned into small warehouses and this reduced the company’s supply chain and inventory costs at the time ( Sharma & Gooptu, 2020 ). They saw a rise in demand for Tier-2 and Tier-3 goods over Tier-1 goods, because Covid-19 had a bigger effect on bigger cities where people were scared and had less money to spend. During the lockdown, Nykaa chose to only take orders that were paid for in full, and orders of less than INR 1,500 were not allowed. This made a huge difference in their average order value and helped to mitigate the warehouse space issue ( Sharma & Gooptu, 2020 ).

During the pandemic, Nykaa also had a celebration called “Nykaa Turns Eight” that encouraged customers to buy both necessities and a few non-essential products from their website. To support this initiative, Nykaa offered doorstep delivery to more zip codes with nominal charges and different payment options. As the online market continued to fill with competitors, Ruchika and Meera agreed that Nykaa would need to continue working to secure its competitive advantage in such ways.

Understanding the Customer and Improving the Customer Experience

Meera and Ruchika moved on to discuss how Nykaa had worked to understand its customers and improve the customer experience, as well as what else could be done to adapt to the emerging challenges. Ruchika asked Meera about ways Nykaa had measured and understood its customers’ experience during the pandemic. Meera clarified that Nykaa had monitored online reviews, mapped customer journeys, and gathered and responded to feedback. Ruchika wondered if more emphasis could be placed on mapping customer experience.

Meera noted that the management of the customers’ experience was one of the most vital characteristic strengths of Nykaa as a brand. Before Nykaa, the Indian beauty market was highly fragmented with many stand-alone retail stores selling varying ranges of beauty products and some small businesses and start-ups trying to push their products in the offline retail market while competing with the international beauty and cosmetic giants. The market was characterized by low product availability and lack of variety or access to preferred products. Nykaa’s arrival, as well as that of a few similar companies, shifted the landscape as they offered a variety of products on an online platform that enabled customers to easily search for and quickly select from a wide range of beauty and personal care brands.

Nykaa’s values emphasized boldness, continuous improvement, inclusiveness, culture of belonging, sustainability, and most importantly, becoming a champion of the customers. These drove the company towards high levels of transparency with the customers regarding the products and services, with no hidden costs or lack of product details. Nykaa also provided customers with huge discounts and other incentives to purchase high-quality products at the most affordable prices. They were rewarded with positive engagement and a growing customer base.

Meera also explained that the development of Nykaa’s stable online platform was intended to enhance customer experience, and how they sold products through their e-commerce websites was Nykaa’s unique selling proposition. The company gathered a range of desirable brands and products in a single location and provided numerous small beauty and personal care businesses and start-ups with a single platform where they could place their products in direct competition with large companies. They ensured the user-friendliness and stability of their e-commerce platform through the dimensions of availability, functionality, and speed. For example, Nykaa made sure both their products and service were available to customers. This meant customers could access products quickly, as well as information and other customer service supports through Nykaa’s online platforms. In addition, Nykaa used various online platform monitoring tools to check the stability and user-friendliness of their online platforms to ensure they were both functional and operating at satisfactory speeds. Through these means, as well as through monitoring of customer reviews, Nykaa found that customers enjoyed a positive experience as they could browse for various products and brands or search the specific brands and products with ease. Customers also appreciated the online filters that allowed them to sort products by price and toxicity information. The customer experience was further improved by the features of easy payment options and doorstep delivery ( Nykaa.com, 2022 ).

Meera pointed out the importance of Nykaa’s customer support, noting that Nykaa distinguished itself from the competition and improved its customer experience with its Beauty Helpline—with chat bots providing instant beauty advice by experts. Nykaa also began offering an online Q&A forum that allowed customers to pose their specific questions and receive answers. The Q&A forum handled everything from makeup color queries to questions around coupons and membership options. These offerings also helped Nykaa understand its customers’ needs and quickly address some of them. Upon understanding what its customers wanted, Nykaa also launched a vlog and video service on its website. Organized and streamed videos offered advice from beauty and fashion experts to aid customers in their buying and post-purchase journey and thus gave its customers a complete experience of the highest satisfaction level.

The videos, shared through YouTube and social media platforms in addition to Nykaa’s website, were part of the company’s customer relationship management (CRM) practices and marketing strategies. Meera noted that Nykaa focused on implementing best CRM practices to optimize its performance. Ruchika wondered aloud if the department had effectively used the consumer decision-making model to understand the buying behavior of its customers and if it could revise or devise a tailor-made CRM program to enhance the effectiveness of this model to meet its pandemic challenges.

Supporting Customer Experience and Sales with Marketing

Meera shifted the discussion to marketing, discussing how Nykaa had worked to develop and implement several marketing initiatives in line with their innovative marketing strategy to enhance the consumer experience and potentially influence purchasing behavior. She pointed out that Nykaa successfully deployed an omni-channel marketing approach that brought them a competitive advantage.

Nykaa’s Content Marketing

Nykaa developed a content marketing strategy as a part of its omni-channel marketing, which saw unique content being created and circulated for the marketing wf the brand and its products, and it also used over 5 million brand ambassadors for the creation and circulation of much of its content, multiplying its organic reach and reception in the Indian consumer base. Unlike traditional marketing communications, which customers tend to avoid, digital content marketing (DCM) communications are frequently sought after by consumers ( Holliman & Rowley, 2014 ). With this form of inbound marketing ( Holliman & Rowley, 2014 ), brands create value for customers so that customers actively seek the brands instead of brands seeking customers ( Geng et al., 2020 ).

Meera noted that, according to Jacob and Johnson (2021) , customers engage with or use the contents of DCM if it is valuable, relevant, reliable, consistent, interactive, and entertaining. Nykaa’s products, customer service, social media content, YouTube videos, and blogs all added value to the user experience. Increasing customer awareness was the primary goal of Nykaa’s content strategy. It attracted attention with its modern and eye-catching content and also assessed customer interest in purchasing promoted products. Aiming to reach a wide audience, Nykaa created trending content across several channels and worked to convert viewers into paying clients. Furthermore, the company’s entire marketing approach focused on ensuring that customers were entirely satisfied even before they tried their products.

Meera explained that Nykaa used various digital marketing techniques to measure the uptake and effectiveness of the content across websites, YouTube marketing, influencer marketing, and social media marketing. The company also utilized brand endorsements and collaborations to spread awareness of products and brands, and employed event marketing and traditional methods of marketing, including seasonal discounts and offers. The brand’s comprehensive digital marketing strategy targeted all demographics and Nykaa had made a name for itself in the beauty and fashion industries as a result of its effective use of content marketing.

Nykaa’s Website

In accordance with its vast marketing plan, Nykaa went to considerable measures to promote itself, whether on its website or through its mobile application. Meera told Ruchika that Nykaa placed a high value on its website’s brand positioning, which ensured that its intended audience could always access fresh content and the best service. On its primary platform, the company featured diversified product offerings and made use of blogs, tutorials, and targeted adverts in order to boost online sales. For example, the company created Nykaa’s Beauty Book, a collection of blogs on beauty, cosmetics, and personal care, and also created video content, including tips on how to apply makeup, DIY projects, and more. The company also created the Nykaa Network, a social networking service for people who love beauty products. This service allowed customers to consult with beauty experts for advice. To ensure that consumers were completely satisfied, the company provided free gifts with all customized orders to encourage customers to come back to shop with Nykaa ( Peppercontent, 2022 ).

Meera went on to explain that Nykaa also used search engine optimization (SEO) services to increase organic traffic and brand visibility on its website and beyond. Nykaa used SEO to enhance its content with high-ranking keywords. Ruchika noted that it was clear that the cosmetics company had optimized its blogs and articles so that they could be found rapidly in Google searches.

YouTube Initiatives

Nykaa also featured an extensive YouTube marketing plan as part of the company’s marketing strategy. Meera noted that the company used YouTube marketing in two forms. Firstly, they placed advertisements in videos through the paid services of the platform and, secondly, they created and circulated videos related to fashion and beauty products. These videos, available through Nykaa’s website and on the YouTube platform under the “NykaaTV” banner, generated high organic viewership and gathered publicity for Nykaa. Nykaa TV offered a resource for people who wanted to learn how to use cosmetics and fashion products, as well as how to keep up with the latest trends in society. Offering makeup tips, bridal fashion tips, celeb style tips, and more, the Nykaa YouTube channel was dedicated to beauty, personal care, and hacks for makeup. Video tutorials were also provided to aid customers and users in selecting the proper items and using them correctly. Meera noted that Nykaa also used YouTube advertising to get in touch with potential clients ( Peppercontent, 2022 ).

Marketing with Influencers

Influencer marketing remained one of the most efficient and cost-effective ways to engage with clients, and Meera shared that Nykaa’s marketing approach relied heavily on it. Brand launches and sales at Nykaa were aggressively promoted through influencer and content creator partnerships. Meera explained that consumers rely on influencers to help them make better judgments because they help them learn and understand the products and services they're buying. When it comes to building consumer trust and loyalty, Nykaa felt that building long-term relationships with influencers was key. Such techniques helped Nykaa’s followers to find inspiration, gain knowledge, and keep up with the latest video content, and also helped Nykaa keep current consumers and acquire new ones.

Nykaa also went into celebrity branding to encourage mass acceptance and to strengthen its brand. The company announced that Jhanvi Kapoor was its brand ambassador and face in 2018 and she actively promoted fashion videos and beauty tutorials with Nykaa products. Nykaa also worked with renowned designer Masaba Gupta, to create and print Nykaa product packaging under the brand name “Nykaa by Masaba.” A collaboration with Katrina Kaif, an Indian actress, also garnered worldwide attention for the brand.

Social Media Promotion

Nykaa adopted social media marketing through brand posts and advertisements on major social media platforms through targeted advertising. The company cultivated an extensive social media presence with several separate and official social media accounts: Nykaa, Nykaa Beauty, Nykaa Man, and Naykd by Nykaa (a lingerie brand).

Nykaa works to ensure that their social media content is relevant to beauty enthusiasts. For example, prior to their special “Pink Friday” sales they have social media influencers do live sessions with fashion and beauty experts to generate hype. Nykaa also makes sure to offer content in bite-sized formats. Beauty enthusiasts who search for keywords such as “make-up tips” or “pretty hairstyle” may end up reading a Nykaa beauty blog or watching Nykaa’s YouTube videos, for instance. In these ways, Nykaa’s DCM remains focused on helping its consumers rather than selling them products.

Meera told Ruchika that Nykaa chose content based on customer engagement with their DCM techniques. For example, Nykaa engaged every day through Snapchat with their potential and existing customers. Nykaa intended to respond to all customer questions, address their concerns, listen to their feedback, whether positive or negative, and initiate a dialogue with them. Nykaa used the information thus collected to conduct a substantial amount of data analysis to determine whether content bits could be restored or destroyed.

More Traditional Marketing Promotions

Ruchika asked about Nykaa’s more traditional marketing efforts and Meera highlighted a few event promotions and seasonal or other promotions the company offered. She noted that Nykaa focused on youth events to attract youth towards Nykaa brands and elevate the brand. In addition to being the official sponsor of Femina Miss India, Nykaa also sponsored many campus festivals and events including IIM Ahmedabad’s Red Brick Summit and Mumbai’s Mood Indigo.

Meera explained that two of Nykaa’s primary goals were increasing consumer awareness of Nykaa’s brand and expanding its reach. Most of Nykaa’s consumers were between the ages of 22 and 35, and the company received roughly 15,000 orders per day from them. With its strong online presence, the Mumbai-based company used a variety of online promotional activities to gain worldwide publicity. For example, Nykaa’s biggest sale promotion activity, Pink Friday, featured deep discounts on a wide range of products in an effort to increase user base and revenue. Nykaa also promoted a Spin the Wheel contest, giving beauty enthusiasts a chance to win discounts on certain items. Meera noted that to ensure clients were completely satisfied with their purchases and remained loyal to the brand, the company also provided free presents with certain transactions (Peppercontent, 2022).

Meera shared that the company also sent out emails, which included information about current industry trends, to highly engaged buyers. These emails also offered previews of impending promotions and encouraged customers to shop online. With strong engagement and conversion rates, Meera noted that Nykaa’s email marketing strategy had been a success.

Overall, Nykaa focused on creating new and innovative marketing initiatives aimed at increasing customer engagement and creating revenue in the process. It had created personalized consumer marketing through effective database management and also used digital marketing strategies to acquire and retain customers after identifying effective customer segments through its CRM techniques. But would that be enough to meet the challenges of the pandemic market?

Ruchika was aware that the Indian market for beauty and personal care products had evolved radically between 2012 and 2022. There was a notable rise in the ownership of smartphones and high-speed data connections among the Indian consumer base that saw them consuming more digital content related to beauty and personal care routines and techniques. It had also seen an increase in online browsing for different products and brands to cater to their needs. With this rise in the flow of brand and product information, customers also developed specific wants and needs that led them to search for and purchase more specific and niche products.

Ruchika further reflected on how insights into customer buying behavior had helped Nykaa understand the customer purchase journey in depth. They had gathered insights and created strategies to grow the market, enhance customer experience, and sustain its customer base despite stiff competition. The rise of the online beauty and personal care market was facilitated by companies such as Nykaa and the customers were gradually shifting towards preferring online purchasing over offline stores, which had limited products. Ruchika paused to wonder about the future for the industry. Would it really be the growth of the market to the rural areas and further integration of the online and offline stores to provide seamless service? That was the forecast, as was the development of easy supply and delivery chains through local bases of operations.

Ruchika reflected on the consumer decision-making model and pondered the effectiveness of the company’s customer experience choices in making them competitive during the pandemic. Nykaa saw a high volume of repetitive sales and high customer retention numbers, but Ruchika believed customers would continue to be happy with their Nykaa experiences only if they could easily choose, order, and receive their desired products. Was it time to adjust the strategy to focus on a strong and pivotal supply chain to bolster customer experience and Nykaa success? The smile and ease with which she was sipping her regular cup of coffee again indicated that Ruchika believed Nykaa could march into a promising future with strategic CRM and logistics initiatives to provide customers with an exceptional experience.

Discussion Questions

• 1. What factors and decisions supported Nykaa’s initial success prior to the pandemic?
• 2. Consider the various stages of Engel, Blackwell, and Miniard’s (EBM) model of consumer decision making ( Engel, Blackwell, Miniard, 1986 ). How could Nykaa improve customer experience at each stage?
• 3. Assess whether Nykaa’s customer advocacy strategy had a positive influence on Nykaa customer experience.
• 4. Analyze the effectiveness of Nykaa’s service design strategy for its multi-channel (online-to-offline) retail offering.
• 5. How can Nykaa leverage improved customer experience in the customer decision journey?

Further Reading

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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• Nykaa Fashion - Nykd by Nykaa, RSVP, Mondano, Likha, and Pipa Bella
• Nykaa Naturals, Nykaa Makeup, and Kay Beauty are all part of the Nykaa House of Brands.
• Posting Offers
• Endorsements by Celebrities
• Nykaa's Purpose: Nykaa's goal is founded on three fundamental values. There are three of them: information, curation, and personalization. The brand believes in providing the finest, which will assist people in making the greatest decision for their holistic beauty needs. "Inspiring Indians, both men, and women, to adopt life and dress sense that better suit them," says Nykaa's mission statement.
• The Business Plan of Nykaa: Nykaa is one of the rare businesses that use an inventory-based eCommerce approach. What exactly is an inventory model? A collection of commodities purchased directly from the purchasers is stored by the firm. We keep their goods in a warehouse. Warehouses for the brand are located in Mumbai, New Delhi, and Bengaluru. They sell their goods straight from there. The profit margin in this kind of business is very high. Such harm is exclusively the responsibility of the firm. They reached their breakeven point five years after they began operations. Initially, the cost of acquiring a client was Rs.1000/, but this has since been reduced from Rs.200 to Rs.300. Nykaa has established a physical presence in approximately 35 outlets.

What is Nykaa's strategy?

How did nykaa attain such incredible success in recent years, what is nykaa's comparative edge, what distinguishes nykaa.

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Dissecting Nykaa’s Marketing Strategy: 2023

Nykaa has achieved phenomenal growth as a D2C beauty retailer in India by leveraging digital marketing and strong brand partnerships. This article analyzes key elements of Nykaa’s marketing success.

Introduction

Founded in 2012, Nykaa is India’s leading beauty and personal care e-commerce platform. Some key facts:

• Offers over 3000 brands with 4 million+ SKUs across makeup, skincare, haircare, fragrances, bath and body, men’s grooming and health supplements
• Over 1,500 offline stores and brand experience centers across India
• Mobile app with 55% of orders and 7 million monthly visitors
• The company’s gross revenue flourished 36.3% to Rs 5,144 crore during the fiscal year ending March 2023 as compared to Rs 3,774 crore in FY22

Nykaa has captured the booming Indian beauty market by emulating the playbook of international disruptors like Sephora. Its marketing strategy balancing curation, content, and community provides lessons for D2C personal care brands.

Target Audience

Nykaa focuses on the urban Indian woman aged 18-35 years who:

• Has high disposable income to spend on beauty and wellness
• Is aspirational and seeks premium global brands
• Wants education, advice, and personalized recommendations
• Values convenience of shopping quality beauty products onlinesecondary audiences include male consumers, consumers in India’s Tier 2/3 cities, and categories like kids/mom.

Product Strategy

Nykaa has expanded across the beauty ecosystem beyond just cosmetics:

• 55,000+ SKUs across 1000+ carefully curated beauty and personal care brands
• Own private labels like Nykaa Cosmetics, Nykaa Naturals, Nykaa Man etc.
• Frequent campaigns and discounts on brands lend exclusivity
• Curations like ‘Clean Beauty’ cater to ingredient preferences
• Specialized stores for Indian ethnic trends like bindis/kajal

This wide yet curated assortment drives discovery and conversions.

Also Read – UNLOCKING AIRBNB MARKETING STRATEGY: KEY LESSONS FOR THE SHARING ECONOMY

Pricing Strategy

Nykaa balances prestige pricing with strategic promotions:

• Maintains premium brand image with non-discounted pricing
• Runs frequent sales during festivals or special days to attract deal seekers
• Offers discounts selectively on brands or seasons to avoid diluting positioning
• Allows brands to limit participation in promotions to protect equity
• Uses bundling and GWPs like free makeup bags to enhance value

This hybrid pricing model helps Nykaa broaden its audience.

Distribution Strategy

Nykaa sells across online and offline channels:

• Mobile app and website provide convenient 24/7 access
• Physical stores in major metros allow experiential shopping
• Partnerships with major e-commerce players like Myntra
• Order online, pick up in-store options enhance flexibility
• Click-and-mortar model adopting the strengths of both channels

Omnichannel presence improves loyalty and retention.

Promotions Strategy

Nykaa deploys online and offline promotions strategically:

• Influencer marketing with targeted affiliate programs
• SEM and SEO to optimize for beauty-related searches
• Retargeting through emails and ads to re-engage users
• Loyalty programs including member pricing and free samples
• Mall activations and university outreach for trials and promotions

Promotions help attract both new and existing consumers.

Marketing Communications

Nykaa focuses its messaging on education, exploration and empowerment:

• Inspirational branding content with KOLs and celebs
• Beauty tutorials, product reviews and guides on Nykaa TV
• User-generated content to foster community and trust
• Shoppable video and live streaming make content transactional
• SMS and app notifications keep consumers informed in real-time

This content-driven approach nurtures the path to purchase.

Digital Marketing Strategies

Nykaa has used digital and mobile marketing to its advantage:

Social Media Marketing

• YouTube tutorials and brand stories inspire and educate
• Instagram for trendy short-form content and IGTV beauty advice
• Influencer collaborations and takeovers to produce engaging content
• Building online beauty community across social channels

Search and Display Ads

• Google Ads target searches for beauty items and brands
• Retargeting with banners reminds users about cart abandons
• Optimization for SEO terms like ‘buy cosmetics online’

Customer Relationship Management

• Email for cart abandonment, personalized content, and sales
• App notifications on new launches, offers, and order updates
• CRM driven cross-sell and next purchase recommendations

Referral Marketing

• Member referral program with exclusive deals for referrers
• Contests during festivals and events to promote sharing

Brand Partnerships

Strategic brand partnerships bolster Nykaa’s authority:

• Exclusive product launches with hero brands like MAC
• Influencer collaborations co-created with brand partners
• Sponsoring beauty awards and industry events
• Shopping festivals featuring limited editions and GWPs
• Hosting experiential stores for marquee cosmetics brands

Partnerships with prestigious brands boost Nykaa’s credibility and draw consumers seeking new, exclusive products.

Key Takeaways from Nykaa’s Marketing

Nykaa’s success highlights several lessons for D2C brands:

• Curating assortment lends legitimacy; private labels drive margins
• Hybrid pricing maintains prestige while attracting deal-seekers
• Omnichannel model balances experience, convenience, and flexibility
• Content should inform, advise, and foster community connections
• Digital enhances reach, engagement and conversions
• Strategic brand alliances provide credibility and early access

By replicating Nykaa’s data-driven marketing playbook, emerging D2C retailers can effectively compete in crowded consumer product categories.

Nykaa has captured India’s growing cosmetics appetite by emulating the success formulas of international disruptors. Its marketing strategy should serve both as a blueprint and a wake-up call for incumbent personal care brands. Savvy use of digital, content, community and brand partnerships has allowed Nykaa to outmaneuver established players. The company provides inspirational lessons for the next generation of D2C challenger brands hoping to find beauty industry success.

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CASE STUDY: How Nykaa gained 50,000 visitors in a month leveraging Digital Marketing?

Table of Contents

What you will find in this case study?

1) About Nykaa 2) How Nykaa Started 3) Marketing Strategy of Nykaa

Content Marketing

YouTube Channel

Discount coupons and offers

Use of Social Media

• Nykaa Experts
• Nykaa Retail Shop

4) Results Achieved

About Nykaa

Nykaa is a growing e-commerce platform for beauty and cosmetics products in a wide range of category including skincare, makeup, luxury products, fragrances and hair care products for both men and women.

The online portal has a wide collection of more than 35,000 products from more than 400 brands. Inventory-based model has helped the brand to gain its name in the fashion and cosmetics industry. With the growing e-commerce reach in the remote areas, Nykaa has established its presence in more than 1,000 cities to more than 10,000 zip codes.

How Nykaa Started

The brand Nykaa came in to existence in 2012 when Falguni Nayar was looking for business opportunity in India and she noticed a huge gap in the beauty products markets in India as India was lagging far behind other countries like Japan, France and European countries. However the data collected by her shows that the demand was on the top but there was very few places to get the genuine beauty products. So the ex-MD of Kotak Mahindra turned into an entrepreneur and launched Nykaa with her banker husband Sanjay Nayar.

Marketing Strategies adopted by Nykaa

Nykaa uses a high end content to showcase the global trends that has proved a winning formula for the brand name. People consume content and this is the reason Nykaa has established a good team for its content strategy. Keeping the users engaged through interesting contents on its blog and social media has driven many customers on their web portal.

Nykaa runs a YouTube channel “Nykaa TV” to provide the people best video guidance for using cosmetics and fashion products and remain up to date in the society. They have many “how-to videos” to help their users and customers.

Nykaa offers many coupons and offers to its customers so that they keep on purchasing items from the portal. During the festive time, the brand promotes themselves on various platforms and using various tools. They make use of coupons and discount deals to attract more and more customers.

Nykaa uses various social media platforms for lead generation and then gives offers and discounts to convert it into sales.

• Nykaa shares offers and deal posts on its Facebook page that has helped the brand get a massive 1.4 million fan following. They have integrated “Shop now” option on their Facebook page that redirects users directly to their website to purchase the beauty products.
• Twitter witness more than 11.1K followers. The content and social media marketing team posts attractive and lucrative contents over the platform that helps Nykaa increase their Twitter followers.
• YouTube Channel of Nykaa has around 50K subscribers.
• Instagram has grown large for the brand with more than 133K followers.

Nykaa experts

Along with contents and videos over the company’s product page and social media platform, they also have more than 25 Nykaa experts who give solutions for all your fashion queries online.

Nykaa’s retail shop

An offline retail store has been launched at IGI Airport, Terminal-3, New Delhi.

Results Achieved

Nykaa has generated INR 220 crores as its revenue for the year 2015-16 with more than 95% repeated customers. Since its inception in 2012, within 4 years, the company has grown vastly. Soon after its launch, the company acquired its niche over the social media platforms and till now Facebook has 1.4 million fans while Twitter has 11.1K followers with more than 133K followers on Instagram.

With the continuous promotion and offers over the social media platforms, the company now gets more than 50,000 unique visitors each month and on an average 80% of them being women. Its online presence has encouraged them to launch their first offline retail store at IGI airport terminal 3 and it is now expected to grow these numbers.

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Nykaa -Top Beauty Retail Platform of India

Anik Banerjee , Manisha Mishra

The demand for beauty goods, especially from teens and young people, is driving the cosmetics industry's extraordinary rise. The industry's fast digitalization has accelerated its growth even more.

Nykaa becomes a major force in this thriving market, providing physical and virtual customers with a wide selection of beauty, fashion, and wellness products . In addition to its current standing, Nykaa's deliberate foray into the women's and men's innerwear markets with Nykd and GLOOT signifies its goal to leave a lasting impression in the personal care industry.

Nykaa is positioned for even greater success in the rapidly changing cosmetics industry because of the intersection of consumer trends and digital innovation.

Read all about Nykaa Founders and Team, Funding and Investors, Marketing Strategy, Business Model, Revenue Model, Growth, Acquisitions, Future Plans, and more.

Nykaa - Company Highlights

Nykaa - About Nykaa - Industry Nykaa - Founder and Team Nykaa - Startup Story Nykaa - Mission And Vision Nykaa - Name, Tagline and Logo Nykaa - Business Model Nykaa - Revenue Model Nykaa - Challenges Faced Nykaa - Funding and Investors Nykaa - Investments Nykaa - Acquisitions Nykaa - IPO Nykaa - Growth Nykaa - Marketing Strategy Nykaa - Advertisements and Social Media Campaigns Nykaa - Awards and Achievements Nykaa - Competitors Nykaa - Future Plans

Nykaa - About

Nykaa is a beauty retail company that sells cosmetic commodities and fashion products, including men's innerwear, both online and offline. The company also offers comprehensive content that includes product reviews, beauty how-to videos, expert-written articles, and even an e-beauty magazine.

The Nykaa helpline is designed to help its customers choose products and services that are tailored to their needs. The products that beauty and wellness brand boasts of are sourced directly from the manufacturing brands and are therefore authentic, and are also available for delivery!

Nykaa - Industry

Based on an estimate by Statista, the Beauty & Personal Care market in India is expected to generate US $31.51 billion in revenue by 2024, indicating significant growth ahead. With a projected compound annual growth rate (CAGR) of 3.00% from 2024 to 2028, the market exhibits a positive trend.

The Personal Care area is the largest in this dynamic landscape, with an expected market volume of US $14.31 billion in 2024. This data highlights the strong potential and changing dynamics of the Beauty & Personal Care market in India and comes from Statista's extensive study analysis.

Nykaa - Founder and Team

Nykaa was founded by Falguni Nayar (Co-Founder and CEO).

Falguni Nayar

Falguni Nayar, the Co-Founder and CEO of Nykaa , is a very successful women with an excellent background in both education and work. At Sydenham College, she pursued a Bachelor of Commerce (B.Com.) degree with an emphasis on accounting and business/management. After that, she continued her education at the esteemed Indian Institute of Management Ahmedabad, where she graduated with a Master of Business Administration (M.B.A.) and a General Finance concentration.

As a Manager at A F Ferguson & Co., Falguni began her professional career by sharing her knowledge. She held important positions at Kotak Securities as the Head of International Business and, subsequently, as the Director and Head of Institutional Equities Business. Her wealth of skills combined with her spirit of entrepreneurship resulted in the establishment of Nykaa in 2012.

Falguni Nayar is a notable example of someone who has achieved amazing success. She is regarded as the richest self-made woman in India, in 2022 at that her wealth grows by 345% and ranked fifth among the Top 10 Biggest Gainers List. Her remarkable rise in fortune is a testament to her outstanding business sense and market leadership in the cosmetic and beauty sectors.

Nykaa Growth Story

Nykaa has about 1,001-5,000 employees as per LinkedIn.

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Nykaa - Startup Story

Nykaa was established in 2012 by Falguni Nayar in reaction to the disparities she saw in the Indian market for cosmetics. Falguni Nayar found the gaps in product availability across the country, motivated by the huge demand for beauty and cosmetic products in India and inspired by the flourishing marketplaces in nations like France and Japan. These differences served as the impetus for the creation of Nykaa, which aims to fulfill unmet customer needs.

With just three workers, Falguni Nayar started Nykaa with little experience in the retail, beauty, or IT sectors. The business completed about 60 orders in its first few days of operation because it was steadfast in its belief that quality should come before quantity. Falguni Nayar said something that summed up her thinking perfectly: "We’d rather sell the proper shade of lipstick at full price than the wrong shade at half price."

Nykaa was first created as an online platform and then switched to an omnichannel approach. With its headquarters located in Mumbai, Nykaa has gained recognition for offering a wide variety of fashion, intimate apparel, and beauty and cosmetic products. Enhancing women's extraordinary in all facets of their lives is Nykaa's objective, which it pursues through its physical stores, app, and online platform.

Nykaa - Mission And Vision

The mission on the company's website states, "To create a world where our consumers have access to a finely curated, authentic assortment of products and services that delight and elevate the human spirit."

The vision on the company's website states, "Bring inspiration and joy to people, everywhere, everyday."

Nykaa - Name, Tagline and Logo

The brand name 'Nykaa' is derived from the word 'nayaka', which means ' one in the spotlight ' in Sanskrit. The Nykaa parent company name is Fsn E-Commerce Ventures Ltd.

Nykaa - Business Model

Nykaa is a D2C consumer products eCommerce brand , that relies on an inventory-based business model. The company purchases its products directly from the manufacturers and keeps them in its designated warehouses located in New Delhi, Mumbai, and Bangalore. These products are sold either on the website of Nykaa or through its 3 offline store formats: Nykaa Luxe, Nykaa On Trend, and Nykaa Kiosks.

The inventory-led model of business of the company helps the company witness high-profit margins and has resulted in a profitable business . Besides, the company also ensures the authenticity of products and follows competitive pricing.

Nykaa experienced a major growth in 2015, moving from an online-only business model to an omnichannel strategy . This change allowed the business to sell things through physical stores as well as its website and apps . Enhancing consumer reach and engagement has been made possible by the implementation of the omnichannel approach.

Nykaa - Revenue Model

Nykaa earns its revenues through the below-mentioned means.

Sale of products

The brand sells its own products and the products of its partnered brands, which is the primary source of revenue for the brand.

Banner advertisements

The banner advertisements of the company also help it bring in a lot of traffic, many of which turn into sales.

Discount income, income from commissions, and miscellaneous income are some other sources of revenue for the brand.

Nykaa - Challenges Faced

Being a relatively young player in the cosmetics industry, Nykaa has faced several difficulties in this fiercely competitive field. Prominent entities like Ajio and Myntra pose intense competition, contributing to the intricacy of Nykaa's market dynamics. It becomes essential to create a unique USP in the fashion industry in order to successfully navigate this fiercely competitive climate.

Nykaa experienced technical difficulties in its early stages, with its website routinely crashing as order volume increased. Overcoming these difficulties particularly the early system outages at 100 orders showcased Nykaa's tenacity and dedication to improving its platform for a flawless client experience.

Nykaa has become a dominant force in the Indian beauty e-commerce market, but it is important to recognize that competition is always changing. Rivals like as Ajio and Myntra are constantly launching new products, offering tempting promotions, and improving the general consumer experience. Nykaa faces a variety of obstacles as a result of its competitors' constant evolution, necessitating constant innovation and tactical adjustment.

Every rival, including Nykaa, has established a distinct market niche for itself in the cosmetics industry by catering to a range of client demands and preferences. Although this diversity makes Nykaa's problems more complex, it also fosters healthy competition that benefits customers. The competition creates a market with lots of options, affordable prices, and better services, which eventually improves the Indian consumer's entire experience shopping for beauty products.

Nykaa - Funding and Investors

Nykaa has raised a total of $215.4 million in 15 rounds of funding.

Here are the funding details:

Nykaa - Investments

Nykaa has made an investment in Earth Rhytm on April 22, 2022.

Nykaa - Acquisitions

Nykaa has acquired six companies to date.

Here are the details:

Nykaa - IPO

Nykaa opened its IPO on October 28, 2021, and it was not just an IPO but a real test for an Indian eCommerce player. It attracted 82X subscriptions in 3 days. The bids that Nykaa shares attracted were worth around $32.53 billion.

Nykaa shares are listed at a premium of nearly 80%. On the BSE, the shares of Nykaa were listed at Rs 2,001, at a premium of 77.87% over its issue price of Rs 1,125. On the other hand, the scrip was listed at Rs 2,018 on the NSE at a premium of 79.38%. The Nykaa shares were open for subscription from October 28 to November 1, 2021.

Nykaa - Growth

Some of the growth milestones of Nykaa are:

• It has 1900+ brands with 1.2 lakh+ products as of January 2024.
• Nykaa has occupied more than 5 million square feet of warehouse space as of January 2024.
• Nykaa claims to have $21 million users as of November 2023.
• It has a total of 141 store counts as of 2022.
• It has 40 fulfillment centers in 18 cities as of 2022.
• It has 105 stores across India as of 2022.
• It has 23 warehouses across 11 Indian cities.

Nykaa total expenses rise from Rs 3,753 crore in FY22 to Rs 5,135 crore in FY23.

Nykaa - Marketing Strategy

Nykaa has stood as one of the most competent players in the beauty and fashion space due to its robust marketing strategy, which is carved with digital marketing at its core. The brand not only focuses on marketing in the Tier 1 cities but also pitches all the potential customers from the Tier 2, 3, and 4 cities.

Social Media Marketing

Nykaa has 4 social media accounts for the marketing of its in-house brand My Nykaa, Nykaa beauty for the promotion of its e-commerce platform, Nykaa fashion to promote its e-commerce apparel store, and Nykaa beauty book, which helps the audience with numerous beauty and makeup tips.

The company has its accounts on diverse social media platforms to extensively promote the brand on social media. The brand is also engaged in posting the content created by its influencers via its social media handles. Therefore, influencer marketing plays an important part in the promotion of Nykaa.

YouTube Marketing

Nykaa has a full-fledged YouTube marketing strategy . The brand refrains from focusing on selling its products via its YouTube channel but concentrates more on offering consumable content, including beauty, personal care tips, makeup hacks, and much more, to its target audiences.

Furthermore, the brand also runs YouTube ads from time to time to target its customers. Thus, the YouTube marketing of Nykaa is fueled with quality content that keeps the audience engaged and relevant ads.

Content Marketing

Nykaa relies majorly on its content marketing. The D2C beauty and fashion marketplace offer a variety of consumable content to the audience, which helps them convert into its customers.

Nykaa has its own blog, “Nykaa beauty book,” which the brand uses to publish blogs on beauty, makeup, and personal care. Furthermore, the brand is also engaged in creating video content like makeup tutorials, DIYs, and more.

Event Marketing

Event marketing is another important marketing strategy that Nykaa leverages to pitch the target customers at the right time and right place.

Nykaa has successfully sponsored the popular Femina Miss India event, one of the largest beauty events in India on a number of occasions, and is still tied to the same event.

Besides, Nykaa also sponsors numerous college fests and events like the Red Brick Summit, 2019 IIM Ahmedabad, and the Mumbai college fest, Mood Indigo .

Nykaa - Advertisements and Social Media Campaigns

Nykaa Campaign

Nykaa's campaign, which consists of four powerful films, skillfully evokes strong feelings in viewers. Scripted by creative powerhouse The Script Room and directed by acclaimed ad filmmaker Prasoon Pandey, the campaign opens with " Kya Khoob Lagte Ho ."

This ad skillfully weaves a tapestry of sincere emotions to depict the essence of relationships and daily living. The movies have a deep message: genuine praises have a special ability to soften hearts and for feelings to bloom. The campaign, which has its roots in authenticity, embraces the notion that, especially in the eyes of those closest to oneself, one's true, unguarded self is frequently the most beautiful one.

Nykaa - Awards and Achievements

Nykaa won several awards and achievements. Some of the prominents one are listed below:

Isidoro Alvarez Lifetime Achievement Medal (Spain, 2023): Falguni Nayar, the creator of Nykaa, was honored with the esteemed Isidoro Alvarez Lifetime Achievement Medal in Spain for her noteworthy contributions to the field.

Falguni Nayar was honored in the FMCG category of the 2023 DNA Women Achievers Awards , which is a testament to her extraordinary accomplishments as the creator of Nykaa Cosmetics.

Asia's Best Integrated Report Category (Bronze Award) at the 2023 Asia Integrated Reporting Awards (AIRA): At the 8th Asia Integrated Reporting Awards (AIRA), Nykaa was recognized for its proficiency in integrated reporting with a bronze award in the Asia's Best Integrated Report category.

Nykaa - Competitors

The top Nykaa competitors are:

Nykaa - Future Plans

Nykaa, a prominent participant in the e-commerce industry, is proactively molding its future through the expansion of its multichannel reach , with the objective of flawlessly merging customers' online and offline purchasing experiences. As part of its plan for the future, Nykaa is dedicated to improving its physical footprint even with the expenses that come with opening new locations.

Nykaa's commitment to fostering stronger client relationships and offering a variety of channels for customers to access its vast array of health, fashion, and beauty items is exemplified by this progressive approach. Setting lofty objectives, such as the intended opening of 180 stores throughout India by 2024 a substantial advancement in its brick-and-mortar expansion strategy the company hopes to build a strong future.

Who is the founder of Nykaa?

Falguni Nayar is the founder of Nykaa.

Why is Nykaa so famous?

Nykaa is India's biggest lifestyle and fashion portal with a collection of cosmetics, skincare, haircare, fragrances, bath and body, personal care, and wellness products for both women and men.

Who are the competitors of Nykaa?

Some of the prominent competitors of Nykaa are:

Is Nykaa an Indian brand?

Yes, Nykaa is an Indian lifestyle retail brand of beauty, wellness, and fashion products with headquarters in Mumbai, Maharashtra, India.

How to sell on Nykaa?

Selling on Nykaa is easy. You just have to go to www.nykaa.com/sellonnykaa and then you need to go to fill up a form where you need to enter the Name of your company, Company Website, Pincode, Address, Product Categories, Brand Name, and other details, and then you would be ready to sell on Nykaa.

Who is Nykaa CEO?

Falguni Nayar is the Founder and CEO of Nykaa.

Where is the Nykaa headquarters?

Nykaa headquarters is in Mumbai, Maharashtra .

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Nykaa Case Study: History, Valuation, Product, Services & Growth

Nykaa is a premier online beauty and wellness destination. Nykaa.Com offers a comprehensive selection of makeup, skincare, haircare, fragrances, bath and body, and luxury products for women and men at the best prices. All products are 100% authentic, sourced directly from the brands, or authorized distributors. With more than 350 brands and over 30,000 products to choose from, Nykaa.Com is the one-stop online destination for you to sit back, relax and shop at your convenience with free beauty advice and assistance over the phone, advice from beauty experts, latest beauty trends, product reviews, tutorials, and celebrity looks on the Beauty Book Blog, and fun Virtual Makeover tool.

HISTORY Falguni Nayar, a former managing director at Kotak Mahindra Capital Company, founded Nykaa in 2012. It was launched as an eCommerce portal curating a range of beauty and wellness products. The brand name Nykaa is derived from the Sanskrit word nayaka, meaning ‘one in the spotlight’. In 2015, the company expanded from online-only to an omnichannel model and began selling fashion products.

VALUATION The valuation of the beauty and lifestyle retailer now pegged at $1.2 billion Omnichannel beauty and lifestyle retailer, Nykaa, has raised ₹100 crores from existing investor Steadview Capital, as a primary investment. With this fundraise, Nykaa’s valuation is pegged at around $1.2 billion.

The Mumbai-based start-up has raised Rs 100 crore from private equity firm TPG Growth at a valuation of $724 million, company filings sourced from business intelligence platform Paper showed.

PRODUCT & SERVICES

Nykaa follows an inventory-based model with warehouses in Mumbai, New Delhi and Bangalore. In addition to its primary e-commerce business, it has an offline presence via 68 brick-and-mortar stores across the country. It claims to have over 3 lakh products across 1,500 brands.

It has two offline store formats called Nykaa Luxe and Nykaa On Trend. The Luxe format features Indian and international luxury beauty brands along with Nykaa Beauty, the in-house collection of beauty products. The latter format has products curated by category basis their popularity. In 2015, Nykaa launched its collection of in-house beauty products. In March 2016, it introduced private labeled products in the bath and body care category.

GROWTH Nykaa has quickly become the first and foremost choice when people tend to buy something cosmetic online.

This is because it is a one-stop solution to everything basic e=required by a woman. From feminine hygiene to luxury makeup it has everything.

The key to the right business is the ability of a brand to actually build up trust among its customers. With the introduction of new customers every day it is also important for a business to flourish when its customers come back. This trust by Nykaa has been developed by delivering 100 percent authentic products delivered to the customer on time. In order to achieve this kind of speed and authenticity, Nykaa has adopted an inventory model where they collect all the items at one place in an inventory and process the order according to the products available in the stock. This ensures that all the bulk orders are received at once instead of one item at a time, which is the case with Flipkart or Amazon. This is a fresh approach that served many benefits with it came to earning the trust of its reiterating customers.

As mentioned by me earlier, Nykaa is the Pandora of products ranging from budget-friendly category to high luxury brands. Nykaa has recently started collaborating and introducing Non-Indian brands like HUDA Beauty, Kiko Milano, Wet and Wild, etc which is an achievement in itself. This has made Nykaa the hoarding spot for all the makeup enthusiasts who can now get their hands on the products which were not available in India earlier.

With the amalgamation of all these techniques and business strategies, Nykaa created a huge customer base for itself. This served as an advantage when it introduced its own makeup and skincare line in the market. With the A-Class quality products, it won the hearts of many makeup users who now had the option of a budget-friendly makeup line with the exact quality of some of the renowned luxury brands in the world.

With all these achievements in its cap, Nykaa also promoted the careers of many YouTube beauty gurus thereby portraying their talent and promoting the career path to the fullest.

The discounts available on Nykaa have saved a lot of pence many times. If we compare the retail price to the price at which it is available on the website, It usually has a significant difference, hence increasing its customer base again.

In other words, Nykaa has proven to be one of the best startups. With its poised and slow and steady approach, it is about to become one of the best beauty and wellness giants in the market, in the coming years. It is the epitome of trust, wellness, and care for all its customers.

INTERNATIONAL OPERATIONS Nykaa’s fashion e-commerce store has launched international shipping to 13 countries as the multi-brand business works to expand its distribution network. Nykaa now ships to 13 countries with three shipping-cost tiers, the business announced on January 11 on Facebook. The retailer’s entire multi-brand selection of Indian fashion brands and its own private labels are now available to international customers. This also serves to greatly widen the distribution network of the brands Nykaa carries including Zariin, The Jodi Life, The Pink Elephant, Global Desi, and FKSN By Narendra Kumar among many others.

Nykaa Fashion has also greatly expanded its private-label offerings recently. New private label brands including accessories label Mondano, occasion wear label Rsvp, and silver jewelry label Likha launched their first collections online at the end of 2019. The business also held a number of pop-up shopping events at the end of 2019 to engage customers offline.

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Please note you do not have access to teaching notes, nykaa: retailing decisions in an emerging market.

Publication date: 24 July 2023

Teaching notes

Learning outcomes.

By working through the case and assignment questions, students will be able to conduct a marketing environmental analysis to aid strategic decisions; analyse the first-mover advantages of a retail firm and how these can be sustained; comprehend online retail business models and the challenges therein; understand the trade-offs of online/offline retail experiences specific to an emerging market’s beauty and personal care sector; conceptualize and formulate actionable growth strategies that balance the individual and collective requirements of brick and mortar and retail e-commerce environments.

Case overview/synopsis

The case is set in 2022, right after Nykaa – the pioneer of beauty and wellness e-commerce platforms in India makes a blockbuster stock market debut in 2021. Starting in 2012 with a disruptive online model for selling beauty and wellness products online in India, Nykaa had come a long way with expansions in physical retail and other segments such as fashion. The firm, which initially aimed to be a virtual store, is now thinking of aggressively expanding in the brick-and-mortar retail space as it opens its 85th retail outlet.

Falguni S. Nayar, founder and CEO of Nykaa, wanted to roll out 300 physical stores targeting 100 cities in India in the next couple of years. She aspired to establish Nykaa as a category leader as the “Indian Sephora” in the beauty and personal care market. Nykaa’s first-mover advantage in the online beauty and personal care marketplace worked well to establish it as a brand with positive endorsements by digital shoppers that enhanced the investment potential with potential financiers. However, the pandemic had brought every physical retailer to the online platform. Most e-commerce platforms dealing in grocery to lifestyle had added personal care products to their existing merchandise.

Additionally, several start-ups had ventured into the online marketplace. Online was a cluttered marketplace with little to no differentiation. In this bloodbath, would the first-mover advantage for Nykaa in the online space still count as a competitive advantage? Nayar was all set to expand Nykaa’s physical presence aggressively. The concern was that the beauty and personal care segment had also moved online as a function of long stay-at-home periods. In the post-pandemic times, would the customer indeed revert to brick and mortar once again? Nykaa was also into product formulations, but so was every big and small player in the space. What was the differentiated winning formula for the consumer’s heart and mind?

Complexity academic level

The case can be effectively used in foundation courses in marketing and a wide range of specialized courses on marketing management (core/foundation course), retail marketing and e-commerce/digital marketing and e-commerce for B-school learners. The complex decision points faced by an innovative e-commerce start-up firm on its road to market expansion make the case suitable for niche courses such as Marketing for Start-ups. Moreover, learners in executive MBA programs with considerable experience can benefit from the case analysis that balances a growing retail company’s long- and short-run objectives.

Supplementary materials

Teaching notes are available for educators only.

Subject code

CSS 8: Marketing.

• Omnichannel retailing
• Emerging markets
• Innovative Tech-Start-Up
• Online shopping
• Marketing strategy

Acknowledgements

Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision-making. The authors may have disguised names; financial and other recognizable information to protect confidentiality.

Basu, R. and Sondhi, N. (2023), "Nykaa: retailing decisions in an emerging market", , Vol. 13 No. 2. https://doi.org/10.1108/EEMCS-12-2022-0449

Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

You do not currently have access to these teaching notes. Teaching notes are available for teaching faculty at subscribing institutions. Teaching notes accompany case studies with suggested learning objectives, classroom methods and potential assignment questions. They support dynamic classroom discussion to help develop student's analytical skills.

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Nykaa: Redefining Beauty Retail in India with Digital Innovation 🌸

Nykaa's case study presents an insightful journey of a brand that revolutionized the beauty and wellness retail sector in India through digital innovation and a customer-centric approach. Founded by Falguni Nayar in 2012, Nykaa started as an online platform for beauty products and quickly expanded to become a leading beauty retailer in India.

Background of Nykaa’s Business Model: Nykaa was launched at a time when the Indian beauty market was predominantly offline, with limited access to international brands. Nykaa's online platform offered a wide range of products, including luxury and indie brands, catering to a diverse customer base.

E-Commerce Strategy and Expansion

📱 Strong Online Presence: Nykaa invested heavily in its e-commerce platform, offering an extensive range of beauty and wellness products. Its user-friendly interface and reliable delivery services enhanced the online shopping experience.

🏬 Omnichannel Retail Approach: Expanding beyond e-commerce, Nykaa ventured into offline retail, opening physical stores across India. This omnichannel strategy helped in brand visibility and catered to customers preferring in-store shopping experiences.

Product Range and Customer Engagement

💄 Diverse Product Portfolio: Nykaa offered products across various price points, from affordable to premium, including its own private label. This wide range ensured a broad appeal to different customer segments.

👩‍💻 Engagement and Education: The brand focused on customer engagement through tutorials, reviews, and beauty advice, positioning itself as a trusted advisor in beauty and wellness.

Marketing and Brand Positioning

🌟 Influencer Collaborations and Digital Marketing: Nykaa’s marketing strategy included collaborations with beauty influencers and a strong social media presence, making it a popular brand among the younger demographic.

📈 Empowerment and Inclusivity: The brand positioned itself as empowering and inclusive, resonating with a growing base of conscious consumers who value authenticity and representation.

Activity Challenge

🔍 Your Task: Consider a sector you're familiar with that's ripe for digital transformation. How could a business in this sector apply Nykaa's strategies of digital innovation, omnichannel presence, and customer engagement to succeed? Reflect on adapting these strategies to different industries.

Nykaa's case study provides valuable insights into leveraging digital platforms for retail, understanding consumer needs, and the importance of an integrated omnichannel approach in building a successful and innovative brand.

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