Myntra bullish on beauty and personal care; to compete with Nykaa, others
The platform is using its decade-long apparels' experience to acquire customers for Myntra Beauty, and is entering grounds ruled by IPO-bound Nykaa, Purplle, and others.
Fashion ecommerce platform says it is bullish on beauty and personal care as it looks to expand.
The platform is using over a decade-long experience in apparel to acquire customers for Myntra Beauty. The -owned ecommerce platform plans on adding 1,000 brands by the end of this year — up from 650 brands currently selling on its platform.
“Myntra has a very captive customer base, and 55 percent are women. They like to browse clothes on the platform rather than just search and buy quickly. People also browse many cosmetic products before buying any product. So extending into beauty made clear sense,” Ayyappan Rajagopal, Chief Business Officer, Myntra told YourStory in an interaction.
Before the pandemic, Myntra was catered majorly to metros and Tier-I cities. “But during the lockdowns, Tier-II and Tier-III towns also started scaling,” says Ayyappan. And while clothing could have style and pricing issues, with preference tilting towards work-from-home and comfort wear, cosmetics and skincare products have seen a growth in demand throughout lockdowns.
Omnichannel cosmetic brand generated Rs 100 crore in revenue in FY20 due to the surge in makeup purchases through digital channels. The direct-to-consumer (D2C) industry saw major growth during the pandemic. Bored at-home consumers had no choice but to jump online for their entertainment, shopping and educational needs — brand discovery increased, accelerating new brand adoption.
Myntra is expecting 20 percent growth in their basket size in the coming months as it enters the beauty category
Despite the pandemic-led uncertainties, there were about 52 investment deals during 2020, adding up to $376.18 million. However, the current year has seen a major investor rush to back D2C startups. According to YourStory Research, over 82 funding deals have happened until September 2021, which are worth $1.26 billion in funding.
The biggest beauty and personal care seller, Nykaa, also had a tremendous fiscal. From switching to selling sanitisers and hygiene essentials during the pandemic, the beauty marketplace is the only profitable startup, which filed for an initial public offering (IPO).
, Myntra Beauty’s biggest competitor, increasing its revenue to reach Rs 2,440 crore in FY 2021 compared to Rs 1,770 crore in FY2020, according to an IIFL Securities report. The company’s FY2021 EBITDA (earnings before interest, tax, depreciation and amortisation) margins were also at 6.6 percent at Rs 161.4 crore from Rs 81.1 crore in FY2020.
Though Myntra is new in the beauty space, it is using its learnings from fashion to devise a path for itself. To push people to explore beauty products, the platform suggests cosmetic products that can match a piece of clothing.
“Our influencer network also provides videos on how to wear a colour and which skin tone suits it,” says Ayyappan.
Myntra Beauty is also trying to bridge the touch-and-feel gap by adding virtual trials and expanding its influencer network.
“Beauty and personal care has a much higher margin compared to fashion or apparel. It would be upwards of 80 percent. It is also a category where repeat purchases happen very often,” says Ankur Pahwa, Partner and Leader for Ecommerce and Consumer Internet practice, EY India.
When a consumer likes a brand or a product and knows it works for them, they seldom tend to change it unless a new category or an offer comes about. “Beauty and personal care is a discovery category and also has stickiness,” Pahwa adds.
To build trust in the new category, Myntra is also providing a 15-day return policy, even though it is not usually offered in the beauty category.
It seems like the ecommerce platform is heading to a good start and is expecting 20 percent growth in its basket size in the coming months. But the road ahead is not going to be easy.
It will be competing with IPO-bound Nykaa, the pioneer in online cosmetic selling, and the likes of Purplle, which caters to Tier-II and III customers.
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Edited by Rajiv Bhuva and Kanishk Singh