Ex-Kotak Mahindra MD bids to capture the billion dollar beauty and wellness market with Nykaa
“…Keep Ithaka always in your mind.
Arriving there is what you are destined for.
But do not hurry the journey at all…”
Ithaka is one of Constantine P. Cavafy’s most famous poems which, among several other things, defines an entrepreneur’s journey quite well. One fine day in 2012, it also shaped and defined Falguni Nayar’s journey when her daughter shared the poem with her.
“The poem emphasizes how one must cherish the journey rather than being overly focused on the end result,” says Falguni.
A graduate of IIM, Ahmedabad, Falguni Nayar spent 19 years as an investment banker and broker with the Kotak Mahindra Group. After an eight year stint with the group’s international operations in the US and UK, Falguni headed the group’s Institutional Equities division. In 2005, she took over as Managing Director of the investment banking business where she successfully spearheaded the firm to be India’s leading IPO banker and was instrumental in closing a number of successful M&As.
It was during this point that Falguni’s past interactions with a number of successful entrepreneurs motivated her to pursue an entrepreneurial journey.
Nayika to Nykaa
Nykaa.com is an e-commerce store that is focused on beauty and wellness products. The Mumbai-based venture has an expansive catalog for customers to select from a wide range of products to suit each and every concern.
A consumer wants advice while selecting beauty products. She wants to know what’s right for her skin. Multi-brand retailers like CVS & pharmacies do not provide that, while individual brand stores give advice but it is often biased.
“I saw the need for a multi-brand retail format that gives unbiased advice to consumers, being able to guide them on the right products for their beauty and health concerns,” says Falguni.
“Nykaa is derived from the Hindi word Nayika – an actress – a person of beauty. Our symbol signifies the transformation of the pupa to the butterfly. A young girl too goes through similar transformation. The butterfly represents freedom, movement, energy and grace,” explains Falguni, the reason behind choosing the name.
With the e-commerce store, Nykaa makes available a wide catalogue of beauty products at the doorsteps of millions of Indians. The store has been created with a lot of advice and concern-based selection for products.
“We offer consumer demand-led products in a wide assortment addressing various needs of the modern woman. Our vision is to build brand loyalty and win customer trust and be India’s premier beauty and wellness destination.”
Nykaa has other properties like the BeautyBook, Virtual Makeover and Experts.
Target audience and USP
The target audience for Nykaa is the beauty conscious Indian woman. The website services 9000 zip codes across India. The customers fall in the main age groups of 18-24 and 24-34. The ratio is 75:25 -- Female: Male.
The USP of Nykaa is providing content that guides customers to make the right selection for their beauty and wellness needs. “Customers need advice in the beauty segment, for example right foundations for the Indian skin tone etc. This is why we have a dedicated section called the ‘BeautyBook’ which features product reviews, tips and tricks on applying the right makeup and guidance on choosing the right products for concerns,” explains Falguni.
Unlike bigger e-commerce players who prefer the marketplace model, Nykaa stores 85% of its inventory. “If you see it on the site, we have it in our warehouse. These leads to a much more superior users experience with extra fast delivery,” Falguni explains.
Evolution and challenges
Falguni elaborates on the different phases of evolution of the venture. “Each phase is different and poses its unique challenges.”
In the first phase, we were focused on site development, hiring the core team and creating a unique brand experience for our customers.
The next phase was focused on operations, technology and getting the products to the customer as seamlessly as we could.
The marketing phase came in the end and we were really excited about making the brand popular. In a constantly evolving space like the internet, our marketing mix sometimes almost changes daily! There were some interesting and exciting challenges as we learnt from the expanse of the digital space.
Predominant emphasis for Nykaa is on being a retailer. There are some barriers to smoother payment options but consumers have accepted them. The team works very closely with brands like HUL, P&G, L’Oreal, J & J (Neutrogena), Nivea and Luxury brands like L’Occitane, Davidoff and Calvin Klein.
The Nykaa team and culture
Nykaa has an experienced and well-balanced team from different backgrounds. The CTO is an ex-IITian. The Chief Business Officer hails from an entrepreneurial background with e-commerce experience. A Vice President of Operations backed with operational experience in leading e-commerce websites makes sure customers receive their products on time.
Nykaa is strongly driven by its content and has a creative writer in the core team. The Chief Marketing Officer hails from Yale and is off to Harvard next year to pursue her master’s degree.
The team has been growing rapidly and maintaining the right quality in new hires has been the top priority for Falguni. “Each person is interviewed by a team of 3-5 people and only when all agree about the candidate, that he or she is hired. We obviously look at past experiences and aptitude for the job but we put a lot of emphasis on the softer qualities like confidence, humility, curiosity and the ability to be a self-starter and follow initiatives.”
Falguni excitedly talks about the culture at Nykaa.
“The culture has naturally evolved into something very special – everyone is friends inside and outside the office. We have become an office of foodies! We play dumb charades on Fridays.”
“Because we are religiously very diverse – we make it a point to celebrate all holidays. We recently started ‘Nykaa Inside’ a program where employees take candid photos and share with our social media fans. All our employees really love beauty at Nykaa. We have an in-house nail artist and she is always creating funky nail art for the employees,” she adds.
Beauty space in India
The beauty and wellness space in India stands at a staggering INR 50,000 crore and is poised for 15-17% growth YoY. Retailer Future group does an annual turnover of INR 1000 crore just in its beauty segment.
But there are not very many beauty focused multi-brand retail format e-commerce stores. There are established players in the US like Sephora and Ulta, and Jumei in China. Technology is evolving at a rapid pace and with it the frequency and volume of new products entering the Indian beauty market is crazy and interesting at the same time. Consumers have become very aware of international trends and are always demanding new products.
Timeline
Year of starting up -- April 2012
Soft launch of the beta site -- Nov 2012
Commercial marketing -- April 2013
Nykaa in the coming months
A mobile app is expected to be launched in the coming months. Nykaa’s very first brick and mortar store will come up at Delhi’s International Airport. The team also intends to add a whole host of new and exciting brands on the store. Tech driven omni channel stores is also the next focus.
“I am excited at the potential for customer engagement with digital tools and the new capabilities it offers. The thought of creating an incredibly engaged and loyal customer excites me and has given me huge insights into the Indian consumers,” Falguni signs off.
YourStory’s take on Nykaa
Highly experienced and diverse team – comes with relevant expertise and network of connections
Organising a highly fragmented big-money business space – Beauty and wellness
Retail model -- brand partnership driven -- exclusive tieups – barrier to entry for others high
Focused towards adding emotional value to the end consumer – ensures brand retention and recall
Related stories:
Buy health and green with Shweta Foulger and Rashi Goel: The Green Ok Please story