How do you assess the growth in beauty retail segment? Also, how would you sum-up the Nykaa’s journey so far?
The color cosmetic market in India is growing at a steady pace of 20-25% per year. Majorly, the growth in beauty retail market is led by the young consumers who follow the US trends, whatever is happening in US, they want to see the same here.
Nykaa started as the e-commerce player, based on our in-house research, we found that a lot of consumers were telling us about many trends which was happening internationally but was not available to Indian market. Such consumers were aspirational to trends, for example, Unicorn make-up is the big trend in the global market, but no one in India had done is so far, so we did that. Nykaa’s growth story revolves around filling those gaps. Likewise, we were getting a huge demand for natural products, so we launched essential oils. Now, we are getting huge demand for Korean masks imbibed with the goodness of Indian ingredients.
Same time, in retail, people were asking for convenience, either ordering online or going to next door store to buy it. So that we are trying to be present everywhere.
Nykaa was started as pure online player and then gradually moved to offline space. What was the rationale behind this transition? Is online not viable channel for beauty category?
No really, in fact, I am shocked to know the kind of sale we are doing online, for example, foundations which is most tricky category, within the first month of the launch, we sold out of foundations. Moreover, In terms of sales split, our 60% sales come from online and remaining 40% from offline.
We, at Nykaa, believe that there are different kinds of consumers; some prefer impulse buying whereas for few touch and feel is very important, so we want to explore all possible channels. I think younger audience is far more evolved and experimental. For us, it is not about one channel vs other, it is the part of our omni channel journey.
Going forward, what would be the expansion plans in online as well as offline space? Also, are you planning to expand via franchise expansion?
We would continue to expand with exclusive to online ranges. Presently, our offline footprint includes 850 sales touch points, and we are planning to extend current number up to 2000 by next year. However, we have 13 company owned stores for now and by next this count should be 17. As of now, we don’t have any plans to open franchised stores.
According to you, what are the major challenges as far as beauty retail is concerned?
Delivering the consist experience every time is one of the biggest challenge as far as beauty retail is concerned. Moreover, maintaining stores at different locations, getting trend manpower and finding good quality retail space are yet other challenges to deal with for any beauty retailer.
Is Nykaa mulling over premium category and compete with brands such as Bobbi Brown? Also what are the plans for category expansion?
We are multi brand online retailer but private label is very profitable for us. Right now our highest price point across five operational categories is Rs.699. Yes, we may launch premium range in the time to come. As far as, category expansion is concerned, we would shortly be launching men’s and mom and baby lines.