The Beauty and Cosmetic industry has always played an essential role in enhancing the beauty of Indian women. But, not all the makeup and wellness products were available in one place. So, a revolutionary idea of merging all the products in one place was brought in, in the form of 'Nykaa'.
Nykaa started off as a retail multi-brand marketplace to sell beauty, and fashion products across websites and mobile apps. Of late, it has extended its services to 84 offline stores across India. The brand name 'Nykaa' is derived from the Sanskrit word 'nayaka', which means 'one in the spotlight'. In the April of 2012, Nykaa was born, founded by Falguni Nayar in Mumbai. In 2020, it became the first Indian unicorn startup headed by a woman.
The company has succeeded in transforming the way India shops for beauty products but that hasn’t been easy. One strategy that has made Nykaa unique and preferable is that it was and is dedicated to beauty and wellness only, which also makes it authentic and trustworthy in the eyes of the consumers.
How did the idea of starting Nykaa come up?
"Entrepreneurship is an adventure that needs courage. Age and experience are not liabilities". ~Falguni Nayar
Nayar believes that age is not a liability when it comes to entrepreneurship. It is so because she took a huge step of quitting her well-established career of 20 long years at Kotak Mahindra Bank, as an investment banker at the age of fifty to start her entrepreneurial journey.
It so happened when one fine day Falguni Nayar visited a Sephora store in the USA. The sales associate recommended her the best products and the best ways of using them. She was so impressed by the service that she spent hundreds of dollars on buying their products even after not being a regular customer of beauty products herself.
Initial Struggle and the Journey
Her amazing experience at Sephora made her decide to bring this concept to India, and have all beauty brands in a single store. When the startup came up, initially they were receiving only 10 orders per day. But, they decided not to give up, despite the refusal of more than fifty investors for investing in their idea of an online beauty brand.
Back in 2012, e-commerce was in the same position as Cryptocurrency is today. People did not trust these much because of the scams and pitfalls there were for consumers to get caught in. There weren’t many regulations in place, and online payments were clunky and unreliable.
At the time when companies like Flipkart and Snapdeal weren’t even funded and were just struggling to build trust, getting into e-commerce was not easy for Falguni. People told her that beauty was not the market to be in. But, she followed her intuition and stuck to her original plan of educating young women about beauty, in the hopes of tapping into a hidden demand that other people in e-commerce didn’t know existed.
Challenges that helped Falguni Nayar shape Nykaa's guiding principles
One of the first challenges faced by her was that she was not a tech expert and thus, in the first 3 months itself, Nykaa had 3 CTOs( Chief Technical Officers). They kept quitting their jobs, and Nayar had to keep looking for new people.
The next challenge awaiting them was a delay in reaching the customers. Needless to say, things were stressful at Nykaa, and the startup’s team of 7 quickly became a team of 2, only Falguni and her daughter who would stay up until 3 AM some nights, packing boxes in between customer support calls.
She used these challenging experiences to shape the guiding principles of the startup the three Cs of Nykaa: Curation, Content, and Convenience.
As per the first C (Curation), Falguni approached as many brands as she could, offering to sell their products in India, and this is how Nykaa became a one-stop-shop for cosmetics.
Next, coming to Content, which is the education aspect of Nykaa’s business. The company created countless tutorials, blogs, and pieces of social media content to educate prospective Indian customers on beauty. These help the customers to make informed decisions on what products to buy based on their preferences and skin types.
The final C, which is Convenience is important as Falguni did everything she could to ensure that Nykaa’s customer experience was top-notch. She started by exploring the platform and choosing items to buy, checking out the delivery process, and visiting the stores to check the condition of the products at intervals.
These three Cs have enabled Nykaa to grow its revenues by 80 times in the last six years. The company tries to stay true to its tagline which is "Your Beauty, our passion".
Growth in the past few years
Some steps that contributed to the success
- The idea of bringing in the best of international brands to India in 2018, alongside top Indian brands.
- Nykaa stamps each product with an authenticity stamp and displays the expiry date on the website and the app.
- The concept of Nykaa minis which provided small-sized trial packs of larger and more expensive beauty products became an instant hit.
- Nykaa’s blog content and detailed reviews section allow women to discover more about products.
- With the launch of Nykaa Luxe (premium brands), Nykaa Fashion (apparel and accessories), and Nykaa Man(2020), they are on their way to becoming the 'Amazon of the beauty industry.'
6. Choosing a Bollywood actress like Janhvi Kapoor as their Brand Ambassador in 2018 also was helpful in making their products seem more valuable and authentic to use.
7. The use of innovative ads and offers on various media channels, also helped them in attracting more customers. The links to a few ads are attached here- Nykaa Hot pink sale, the Pink Friday sale, and #NykaaLand.
So, it is needless to say that team Nykaa has walked a long way and still has great potential. The journey so far has been full of ups and downs and maybe they can keep building on their strengths for future ventures.