Digital adoption: India’s post-COVID-19 landscape pushing retailer Nykaa to focus on e-commerce business

23-Jun-2020 - Last updated on 23-Jun-2020 at 01:35 GMT

India’s beauty brands must learn to rely less on traditional channels and make the move to becoming ‘digital-first’ brands. ©Nykaa

India’s beauty brands must learn to rely less on traditional channels and make the move to becoming ‘digital-first’ brands as uncertainty reigns supreme in the nation’s brick-and-mortar retail space.

That is the view of Reena Chhabra, who heads the private label arm of e-commerce platform Nykaa, an Indian beauty retailer that carries over 1,300 brands and has a consumer base of over 12 million people.

Nykaa operates a successful e-commerce platform and a string of retail stores across India.

Since the novel coronavirus outbreak hit India, Nykaa, took a hit in both its online and offline channels.

“We had a dip in April but saw [online sales] bounce back in May, that’s when we had a complete V-shape recovery,” said Chhabra, who was speaking at WeCOSMOPROF, a digital event held by Cosmoprof Worldwide Bologna.

As online shopping has proven resilient amid pandemic, the omnichannel company plans to focus its efforts towards e-commerce and the adoption of more technology, which can help bridge the online and offline.

“The transition to e-commerce is here to stay. We have more digital adoption. There are already companies working on AR and VR technology working towards giving consumers a real-life experience on e-commerce,” said Chhabra.

Chhabra believes beauty brands should consider a digital-focused approached in the Indian market.

“For brands, there are opportunities to become a digital-first brand. There’s going to be opportunities for new brands also. It has become quite critical for them to explore [partnerships] with larger online platforms or build platforms of their own.”

Brick and mortar ambiguity

On the other hand, the company’s retail outlets have yet to see the same quick bounce back.

Currently, 23 out of 50 Nykaa stores are operational. However, the company cannot be sure when its offline retail stores be back to form.

“It’s hard to say what the numbers will be when it all comes back. In the next two to three months, we think it will be disrupted at best. At this moment, we want to see how in comes out. We may face a slowdown,” said Chhabra.

Right now, Nykaa has observed that consumers that do walk into its stores have intent to purchase and the average basket purchase size is higher.

She foresees that consumers may now no longer be comfortable with shopping in-store.

“We have stopped testers and we feel customers are no longer comfortable with that, hence we all have to work towards AR and VR. Social distancing in stores and cashless payments… I think all will become norms to come.”

Overall, the firm continues to be confident in the beauty category.

“In the long-run, beauty will see a resurgance as a way of expression, because there is an inherent need, but just in different perspectives when you look at product category,” said Chhabra.

She concluded: “It’s not survival of the fittest anymore. To survive you have to become even more agile, adaptive and responsive. We have to manage the supply chains of products and quickly adapt to the changing needs of the environment.”