Nykaa Business Model: How Does Nykaa Make Money
Over the past ten years, over 20 internet retailers have tried their luck in India. Still, none succeeded until Nykaa, a brand that sells fashion, wellness, and cosmetics products, joined the market. This company has advanced to the point that, in 2015, it transitioned from an online label to an omnichannel strategy, allowing Nykaa to dominate the industry.
Nykaa is an Indian online retailer offering health, fashion, and cosmetics goods via its 76 physical locations and websites and applications. Falguni Nayar, a former senior managing director at Kotak Mahindra Capital Company, created it in 2012. Nykaa sells a large variety of goods imported from all over the world and manufactured in India.
Nykaa changed from having an online-only business model to an omnichannel one in 2015, which included selling goods via its website, apps, and physical locations. Nykaa introduced two new ventures in 2020: Nykaa Fashion, an online store for fashion, and Nykaa Pro, an online marketplace for professional beauty services. Nykaa sells 200,000 goods under over 2,000 brands through its many platforms.
Nykaa’s in-house brands:
- Nykaa Cosmetics & Naturals
- Nykaa Fashion
- Nykaa Man
- Nykaa Pro
- Nykaa Network
Nykaa Company Details
|Beauty and Wellness E-commerce
|E-commerce platform for beauty and wellness products
|Makeup, skincare, haircare, fragrances, and wellness
Business Model of Nykaa
One of its main advantages is its inventory-driven business model for the BPC (Beauty plus Personal care) category.
Nykaa Business Model
Nykaa, operating in the Beauty and Personal Care (BPC) segment, has a robust inventory-driven business model. In other words, Nykaa buys goods straight from producers and keeps them in its warehouses. This enables Nykaa to maintain control over the availability and quality of its products while simultaneously providing affordable pricing.
Nykaa has a potent multichannel marketing plan as well. This indicates that Nykaa interacts with clients using various platforms, such as its website, mobile application, social media accounts, and live events. As a result, Nykaa may establish a strong brand presence and connect with a larger audience. Additionally, it is geographically present in 38 distinct cities. It wants to increase the number of its actual stores. There are actual Nykaa locations in 38 Indian cities. In the future, it intends to increase the number of its physical stores.
The actual stores have two functions:
- They let clients try things on before they purchase them.
- They support Nykaa’s efforts to strengthen its distribution network, eventually enabling hyperlocal delivery.
- In addition to offering in-person interactions with specialists, physical storefronts are crucial for personal branding for certain international premium businesses.
The following are some of the main elements that have facilitated Nykaa’s success:
- A robust inventory-based business strategy
- A potent multichannel marketing plan
- A physical presence in 38 Indian cities
- An emphasis on the clientele
- A dedication to producing high-quality goods
Other elements for its success include:
- Affiliate Program and Content-First Strategy
- Focus on Beauty and Wellness
- Unique Selection of Products
- Tech-Enabled Operations
- Online-only presence
How Does Nykaa Make Money?
Items that Nykaa gets directly from manufacturers are stored in its warehouses and are offered for both online and offline shopping. Purchasing directly from manufacturers leads to higher profit margins and more competition in the market. It acts as a unified brand for its cosmetics and health products sold online and in-store. Additionally, it promises delivery between one and four days after the order is placed.
Nykaa makes money overall from various sources, including advertising, influencer marketing, product sales, B2B sales, and promotions. Nykaa has made a name for itself in the Indian e-commerce market by providing a range of services to companies and diversifying its sources of income.
Here are some of the key elements of Nykaa’s marketing plan:
- Social Media Marketing: Nykaa is well-represented on Facebook, Twitter, Instagram, and YouTube, among other social media sites.
- Content Marketing: Nykaa’s website includes a dedicated blog section with posts about wellness, lifestyle, and beauty.
- Email marketing: Nykaa has a sizable subscriber base that gets frequent emails on specials, promotions, and the launch of new products.
- Search Engine Optimization (SEO): Nykaa invests in search engine optimization (SEO) to raise the website’s organic traffic and search engine ranking.
- Offline Marketing: Nykaa also invests in offline marketing initiatives like print ads, in-store promotions, and events.
- Personalization: Nykaa employs machine learning and artificial intelligence to tailor the online experience for each visitor.
Nykaa has become a prominent player in India’s e-commerce industry. Its unique business model focuses on providing high-quality beauty and wellness products, excellent customer service, and innovative marketing strategies. The company’s strong online and offline presence, personalized customer experience, and diverse product range have enabled it to differentiate itself from its competitors and establish itself as a leader in the Indian beauty and wellness market.