Falguni Nayar Forecasts India's Rise as the Third Largest Consumer Market

FSN E-Commerce Ventures Limited, referred to as “Nykaa”, India’s leading omnichannel consumer-tech company, today held its 11th Annual General Meeting (AGM). Falguni Nayar, Chairperson, MD & CEO of Nykaa reiterated the faith the company has in the tremendous growth potential of the Indian consumption story that is set to play out over the coming years. Having made strategic investments over the years in technology, operational excellence, partnerships and people, Nykaa has earned its place in its consumers’ minds as India’s most preferred beauty and lifestyle omnichannel destination.

Key statements from Falguni Nayar’s speech to the shareholders: 

“India has quickly become the most preferred destination for many global brands to meet their growth ambitions. Through unwavering focus on best practices combined with the art of retailing, we have established ourselves as the Indian partner of choice for brands across the world. By taking an unconventional technology first approach, we were able to disrupt and democratize both demand and supply for the industry while reaching over 98% of the market.”

“We have an unwavering commitment to our customers – we strive to be authentic, inclusive and transparent with them. Our customers have appreciated this, and allowed us into their homes and hearts, for which we are grateful. We have received much brand love, with Nykaa becoming synonymous with Beauty for many around the country.”

“We are proud of our ability to execute and deliver on the plans we set out to achieve. Almost one-third of our GMV contribution in FY23 has come from our newer businesses, with all of them being built from scratch over the last 4 to 5 years. Our success here comes from diligently finding product-market fit, executing well with speed, and driving only sustainable growth.”

The highlights of FSN E-commerce 11th AGM presented virtually on 18th September 2023

• Nykaa witnessed a consolidated GMV of over Rs. 9,743 crores and a Net Revenue of Rs. 5,143 Crores. This represents a revenue growth of 36% over FY22 and a revenue growth of 191% over the pre-covid year of FY20.
• Nykaa achieved a Gross Profit of over Rs. 2,278 Crores and EBITDA of Rs. 256 Crores, with a healthy and improving EBITDA margin of 5%.
• Nykaa’s business spans across multiple digital platforms retailing over 6,200 brands to a customer base of 24 million and the company services customers in 98% of the country’s pin codes.
• As an omnichannel retailer, Nykaa has 150+ multi brand retail stores along with many EBOs and Store-in-store across 3rd party outlets.
• Currently, Nykaa has 25 unique and well positioned brands across Beauty, Personal Care and Fashion, spanning across categories. Notable amongst these are Kay Beauty, Nykaa Cosmetics, Dot & Key, Nykd & 20 Dresses.

Industry Outlook

• Presently, India's per capita Beauty & Personal Care (BPC) consumption is at $15 and is likely to grow to $50 by 2030. This presents a significant opportunity for Nykaa which already enjoys an annual consumption value of $80 per capita, which is already more than 5 times the national average.
• For Fashion, India’s per capita consumption stands at $54 and is expected to reach $160 by 2030, based on the trajectory of developed markets. The Nykaa customer today spends $130 on Fashion.

Nykaa’s Beauty and Personal Care Business

• The BPC GMV stood at Rs. 6,649 Crores for FY23, growing 33% over the last year, and when compared to pre-COVID, it stood at a strong 2.6 times of the FY20 GMV.
• Today Nykaa is the largest beauty specialty retailer in the country, online and offline with an unconventional technology first approach.
• Currently, Nykaa retail over 3,400 brands, from the biggest global brands such as L’Oreal, MAC & The Ordinary, to international cult favorites like Charlotte Tilbury to niche Korean Brands from Amore Pacific to homegrown beauty brands like Lakme, Mamaearth and Minimalist.
• Nykaa has always believed in the power of omnichannel, and opened its first store, very early in its journey in 2014. As of FY23, Nykaa has expanded to 145 beauty specialty stores across different formats, including Luxe stores, On-trend stores and Kiosks across 60+ cities.

Nykaa’s Fashion Business

• The Fashion GMV stood at Rs. 2,569 Crores for FY23 and now constitutes over 26% of Nykaa’s overall consolidated GMV.
• In FY23, over 2.5 million customers trusted Nykaa Fashion to help them stay stylish.
• Global Store contributes almost 25% of the western wear sales, as of Q4 FY23.
• This year, the number of brands available on the platform doubled from 1,500 brands to 2,850+ brands – across curation levers – National brands, Global Store, Hidden Gems, First in Fashion and the Responsible Collection.

Nykaa’s Owned Brands

• The BPC owned brands now contribute to 11.9% of the overall BPC GMV and Fashion owned brands contribute 12.9% to the overall Fashion GMV.

• In less than 3 years from launch, Nykd, Nykaa Fashion’s lingerie brand has built a national presence and is distributed through 4 EBOs, 900+ Point of Sales in GT/MT.
• Kay Beauty, Nykaa’s award-winning premium beauty brand launched in partnership with Katrina Kaif is present in 300+ offline stores and has witnessed impressive year on year GMV growth, with a 2-Year CAGR of 86% and exceeding a GMV of Rs 127 Crores in FY23.
• Nykd (lingerie brand), and 20 Dresses (western wear brand) have now become sizable, crossing Rs 85 Crs and Rs 150 Crs in GMV sales for FY23 respectively.

Nykaa B2B offerings

• Superstore by Nykaa, launched in 2021 has successfully onboarded 150,00 retailers in FY23.
• Along with a growth in the number of retailers, Superstore witnessed an order growth of over 15 times in FY22.
• For FY23, over 84% of the sales came from Tier 2+ India. 

Strategic Alliance with Apparel Group in GCC

• The GCC offers a large BPC market size of over $30 Billion and as a region is in its early-stage journey of ecommerce adoption.
• Nykaa, in a joint venture with GCC’s retail conglomerate Apparel Group, will open its first international store before the end of 2023.

Nykaa’s CSR and ESG efforts

• Nykaa Foundation within the first year of launch has taken up multiple initiatives spanning education, training, children’s health and empowerment.
• As part of 10x10, a Nykaa initiative that started in July 2020, to reduce the amount of plastic used (both by volume and value) by 10% every year for the next 5 years has invested in building a ‘regional fulfillment’ strategy with a twofold objective -  reducing the last mile carbon footprint by getting closer to the customer and reducing the number of shipments required per order. Through investments in technology in warehouses, Nykaa has adopted paperless picking, resulting in elimination of almost 90% paper consumption across all our warehouses.

Workforce at Nykaa

• Nykaa has been able to build a diverse and inclusive workforce. Women constitute 45% of the employee base – with representation at all levels. Amongst the 188-person strong managerial leadership, 33% are women.
• Nykaa’s business supports various segments and generates indirect employment across its logistics partners, brand partners, thousands of suppliers as well as hundreds of MSME vendors.

Falguni Nayar concluded her address by citing one of Nykaa’s core values, which is “To be Bold and To be Good”, reiterating Nykaa's commitment to being ambitious and entrepreneurial yet bold and ethical, striving for long-term profitability and value creation for all stakeholders.