The Indian omnichannel retailer reported a stellar quarter for its beauty division, which saw 29% growth in gross merchandise value (GMV) to INR2,783crs in its second quarter ending September.
Additionally, the firm continued to expand its network of brick-and-mortar beauty stores.
“In terms of our physical retail footprint, today we have 210 stores across 70 plus cities, making us the largest beauty specialty retailer offline now as well. And this business has grown again at about 37% on a GMV basis year-on-year,” said Anchit Nayar, chief executive of Nykaa Beauty.
This is split between 91 Nykaa On Trend stores, 73 Nykaa Luxe stores, and 46 Nykaa kiosks.
Together, they account for over 200,000 square feet of retail space, a 25% growth year-on-year, said Nayar.
“And in terms of contribution to our overall omnichannel beauty GMV, that number is at 8.2% and it is up by over 70 basis points year-on-year,” he added.
Nayar emphasised the importance of growing its offline retail footprint.
“Physical retail continues to be a fast-growing business and is incredibly important to our overall strategy, which is to expand the beauty market in the country and to give consumers access to the best brands and the best products in a physical setting, which as a highly tactile category is incredibly important.”
Over 170 brand launches in Q2
The company’s expanding brick-and-mortar network has attracted over 170 brands to launch with Nykaa this quarter.
This included brands such as L’Oréal-owned luxury brands Yves Saint Laurent Beaute and Kerastase.
The later was available in India previously but made its online debut with Nykaa.
“This is the first time that they have launched on a dot com platform and we were the partners of choice for that launch,” said Nayar.
Eucerin, the dermatological brand by German beauty major Beiersdorf also launched on Nykaa exclusively.
“Again, a testament to how we are really convincing brands to enter the India market and take a look at Nykaa as the partner of choice for their India expansion plans,” said Nayar.
Additionally, the Estée Lauder Companies launched Dr Jart+, a K-beauty skin care brand exclusively with Nykaa this quarter.
We continue to bring the best global brands into India and global partners see Nykaa as the partner of choice given the sheer scale of our consumer base But I think even more importantly, the expertise, which we have developed over the past decade in helping brands to build their brand equity in the market and localize themselves for a go to market strategy,” said Nayar.
Fragrance potential
In August, CosmeticsDesign-Asia reported Nykaa’s plans to increase its focus on prestige fragrance.
Nayar said the category has become a “standout category” this quarter.
“The category grew at 65% year-over-year on nykaa.com, which is more than double the growth of the beauty vertical. And in stores, the growth was even higher at about 105% year-over-year.”
He attributed the growth to the retailer’s efforts to drive education and awareness through onsite experiences and events.
“A lot of it being driven by what we like to call the art of retailing, so creating demand, creating aspiration for this category through awareness and education.”