Quick Commerce model is solving “very different” use cases and suited to broader product categories like groceries and items of daily use, Nykaa founder and CEO Falguni Nayar said, emphasising it is not a format that the beauty and fashion platform wants to jump into.
Nykaa is continuously focused on improving delivery timelines, being closer to customers and building out an extensive network, Nayar said. Indian consumers are on a “premiumisation” journey in every category, seeking better quality and more out of the offerings, she said, outlining the megatrends shaping the beauty and fashion space.
In an interview with PTI on the sidelines ‘Nykaaland’ — a star-studded affair showcasing brands, new styles, debuts and master classes with internationally acclaimed makeup artists — Nayar said the event, running its second edition this year, is expected to draw more visitors, footfalls and brand participation. “Like in our business itself, we’ve said the best of beauty and fashion should be available to Indian consumers, and we work very hard to bring a lot of international brands into the country.
“We are also the platform of choice for great D2C brands, which are coming up in the country…beauty is a very inclusive world, and from international brands to our local brands to best of what the beauty and fashion have to offer, are all present here,” she said about the convergence of brands, consumers, creators, and beauty communities at ‘Nykaaland 2.0’.
To a broader question on how she sees competition from quick commerce companies – that are wooing Indian consumers with super-fast turnaround and deliveries, Nayar said, “We think quick commerce is more about a wider set of SKUs, which includes groceries and everyday goods, which is not where Nykaa wants to jump in”. Nayar believes quick commerce is solving for a very different use case.
“…beauty includes what we call beauty and personal care. And personal care products all over the world have always been sold at neighbourhood stores, including pharmacies, and there are…certain types of SKUs that customers pick up in the neighbourhood stores. So, I think what quick commerce is solving for is a very different use case,” she said. That said, Nykaa is aiming for rapid and express deliveries.
“We are talking about it, and that is our promise to the customers,” she said. Nykaa’s top boss said that while the young digital-first population of Gen Z and millennials have a preference towards buying online, the most successful models will have an omnichannel approach in serving customers “where they are”. “We have to be where consumers are. Nykaa would have earlier thought that we could have one Luxe store in South Bombay, and today we… before we know…we’ll have four, five Luxe stores in South Mumbai alone.
“So, I think the scale of operation is changing as the industry is growing larger, both for beauty and fashion and you’ll see that most successful models will have an omnichannel approach to serving consumers where they are,” she said.
Nayar’s entrepreneurial leap with Nykaa saw her tapping into an underserved beauty retail market, and the platform has since then expanded its offerings to include lifestyle and B2B by introducing online platforms Nykaa Fashion, Nykaa Man, and Superstore.
“What we call a speciality beauty retailing with the convenience of e-commerce is what Nykaa started at. We chose to be a vertical player. We do believe that customer journeys where discovery is very important…consumers discover the most suitable product for them…that is the premise under which we built both our vertical apps of beauty and fashion. That’s why we went ahead with a separate app for beauty and a separate app for fashion. And I think we are big believers in that,” she said.
Nykaa has 35 million customers on the platform, and it operates in 200 stores. Nayar said Nykaa’s physical retail accounts for less than 10 per cent of its turnover. “India is a very large, geographically diverse market, and trying to cater to 10-minute delivery in certain metros is a very different use case. So far, players like us…we are helping more than 2,000 brands grow and launch in the country on the beauty side, similar numbers on the fashion side…and similarly, we cater to all the PIN codes,” she said.
Nykaa has scaled up from 15 warehouses to 44 today over the past years and is constantly focused on improving delivery timelines. “There is a whole size and scale at which we operate in the beauty industry, and if consumers are looking at faster delivery, obviously with the volumes that we have, we’ll keep solving for it. “Over the last few years itself, we have moved from 15 warehouses to 44 today, and most of our deliveries are affected by that ability to be closer to the customer within the state that they reside in, and that’s helped us improve our delivery timelines by 45 per cent, and the same journey will continue,” she said.
On the festive season uptick, Nayar said the demand momentum is expected to continue beyond Diwali. “…the festive season is doing well. But as you are aware, the festive season is early this year, and one has to look beyond festive. And I do believe that the wedding season this year was more concentrated in the second half. So, most of us remain very enthusiastic about the momentum continuing beyond the Diwali festive season,” she added.
