Nayar observed the online market and its growth in India. She observed that beauty was an untapped market in the country and the number of Indians shopping online was about to explode. The idea of starting an online beauty business came to her after she had visited multi-brand beauty stores like Sephora Holdings S.A. where she was guided on the right way to use beauty products and told which products were the right ones for her. She realized that the experience had left her feeling confident and empowered. ..

Leadership and Entrepreneurship Case Studies | Case Study in Management, Operations, Strategies, Business Environment, Case Studies

PayPal (9 USD)

BUILDING A BEAUTY EMPIRE

Nayar created Nykaa with the vision of providing a carefully curated range of products for every beauty solution. Derived from the Sanskrit word ‘Nayaka’, meaning actress or one in the spotlight, the business was based on three ideals – curation, content, and convenience. The first phase of her business started with the development of the site, employing the core team, and creating a user experience for the customers. Naykaa offered a product assortment that suited every Indian woman’s budget...

RESULTS

Within four years of its inception, i.e. by 2016, Nykaa had about 1.5 million customers. Analysts were of the opinion that the fashion and beauty market was volatile where broad margins were controlled by the brands, but Nayar proved them wrong by reaching the operational break-even within just five years of establishing the company. Nykaa was EBIDTA-positive for the fiscal year ending 2017. In 2018, ..

SECRET OF SUCCESS

Nykaa entered the market at a time when many in the industry were on the verge of writing off the online beauty business. Many entities such as GoodLife and Amber Wellness shut shop between 2012 and 2015 due to little interest or support from customers and investors. Beauty as a category was growing more slowly than other categories due to limited selections, supply chain hurdles, and problems such as the risk of fake products. ..

CHALLENGES

While Nayar met supply challenges by maintaining an inventory of fast-moving products in the company’s warehouses, other issues persisted. Balancing inventory, presenting the products well, and avoiding dead stock by keeping track of expiry were a few of the challenges the beauty retailer faced. Another challenge was to deliver authentic and non-duplicate products through the right distribution channels. ..

THE ROAD AHEAD

With the COVID-19 outbreak in India, Nykaa, took a hit in both its online and offline businesses. Quick to adapt to the requirement of the pandemic, Nykaa launched new personal care products with a new ‘essentials only’ interface. Nayar expected online sales to recover faster compared to its physical stores amid the COVID-19 crisis. According to her, Nykaa’s online business would bounce back fully by July 2020, but progress would be slower on the offline side. ..

EXHIBITS

Exhibit I: Investor Funding at Nykaa (2014-2020)
Exhibit II: Nykaa: Key Data (as of June 2020)
Exhibit III: Nykaa Content Marketing Initiatives
Exhibit IV: Nykaa Revenues (2016-2019)
Exhibit V: Awards Won by Falguni Nayar
Exhibit VI: Key Competitors of Nykaa
Exhibit VII: Online Beauty Market in India