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Multi-brand retailer of premium beauty and personal-care products, Nykaa.com, expects to achieve EBIDTA-level profitability by October.
The company, which was founded in 2012 by former MD of Kotak Mahindra Capital Company, Falguni Nayar, has so far raised ₹185 crore in three rounds of funding.
Having reported a Gross Merchandise Volume (GMV) of ₹275 crore in FY2017 with a net revenue of ₹214 crore, the company has set its sights on achieving a GMV of ₹750 crore in FY2018. Adopting an omni-channel approach to beauty retail through multiple touch points, Nykaa has opened four Nykaa Luxe stores in Mumbai and Delhi, with its fifth store inaugurated in Bengaluru on Thursday.
“Having achieved 300 per cent YoY growth in FY 2017, Nykaa is on a GMV run rate of ₹600 crore today, and is on track to being EBITDA positive by October. We are confident of achieving ₹750 crore in GMV in FY2018” Nayar, founder and CEO, FSN Ecommerce Ventures Pvt Ltd, the holding company of Nykaa, told BusinessLine . “We plan to add 12 more stores at an investment of ₹1 crore per store, by March 2017, and reach a store count of 30 by 2020,” she said.
Targeted at customers in the age profile of 22-35 years, Nykaa offers 650 brands, and has 60,000 SKUs (stock-keeping units).
Luxe stores showcase 65-80 premium brands, including Estee Lauder, Clinique, L’Occitane, Ciaté London and L.A. Girl, along with Nykaa’s in-house range of beauty products for lips, nails, eyes and face. Private labels contribute 8-10 per cent to the company’s revenue.
Pointing out that the beauty business is still at an early stage in India, where customers use 2-3 beauty products compared with customers in Korea and the US who use 20 products daily, Nayar said: “Two million customers have bought beauty products from Nykaa.com, and the site attracts 15 million visitors a month. At Nykaa Luxe stores, we educate customers on various beauty products, and also have trained beauty experts to recommend products that suit customers’ skin, hair, etc.” Asked about the impact of the GST on prices of beauty products, Nayar said it will not have much impact unless brands decided to increase prices.
The company engages with shoppers through its YouTube channel, which features demo videos. The fifth edition of Nykaa Beauty Bar, already conducted in Chandigarh, Hyderabad, Kolkata and Ahmedabad, was held in Bengaluru at the Nykaa Luxe store on Thursday, with master classes, expert makeovers and one-to-one interactions with leading brands.
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