In a recent address at Inc42’s D2C summit, Adwaita Nayar, the co-founder of Nykaa and CEO of Nykaa Fashion, underscored the favourable conditions for brand development within the beauty and fashion sector. Nayar expressed optimism about the growth potential in these verticals and emphasized the significant opportunities they present, both in terms of brand creation and platform-focused businesses. In this article, we delve into her insights and strategies for tapping into this thriving market.
The Indian Market and D2C Brands
Adwaita Nayar discussed the expansive potential within the Indian market, especially concerning Direct-to-Consumer (D2C) brands. She highlighted a notable gap in the brand ecosystem, particularly in product categories like women’s fashion. According to Nayar, this gap signifies a substantial opportunity waiting to be harnessed.
Owned Brands vs. Private Labels
Nayar elaborated on Nykaa’s approach to brand creation. She emphasized the distinction between what they call “owned brands” and traditional “private labels.” Unlike private labels, which often carry the connotation of being budget-friendly, Nykaa’s owned brands focus on identifying gaps in the market and filling them with well-crafted, high-quality brands. This approach encompasses creativity, design, positioning, and addressing market voids. Currently, Nykaa boasts 20 such owned brands across beauty and fashion segments.
Cross-Platform Expansion
Nykaa’s reach extends beyond its own platforms. The company strategically sells its owned brands not only through its own channels but also on other platforms and offline channels. Some of these brands have found success beyond their primary platforms, underscoring Nykaa’s ability to penetrate diverse market segments.
Teen-Focused Fashion
Adwaita Nayar identified a significant opportunity in the realm of teen-focused fashion. While Nykaa does cater to some teenagers, Nayar believes that there’s a substantial untapped market waiting for a dedicated platform and a collection of brands tailored specifically to meet the needs and preferences of this demographic.
Financial Performance
Providing a glimpse into Nykaa’s financial performance, it was revealed that the company’s net profit surged by 8.2% YoY to INR 5.4 Crores in the first quarter of FY24. The beauty and personal care (BPC) vertical recorded impressive growth, with Gross Merchandise Value (GMV) increasing by 24% YoY to INR 1,850.8 Crores in the same quarter. Additionally, the fashion vertical’s GMV rose by 12% YoY to INR 653.7 Crores in Q1 FY24, despite a slight QoQ decline.
In conclusion, Adwaita Nayar’s insights shed light on the immense opportunities within the beauty and fashion industry, particularly in the Indian market. Nykaa’s innovative approach to brand creation and expansion, coupled with its financial success, serves as a testament to the potential for growth in this thriving sector.
