1. Elevator Pitch of the Business

Nykaa, established in 2012 by Falguni Nayar, is India's premier beauty and wellness e-commerce platform. With a vast product range and a blend of online and physical retail presence, Nykaa offers customers a seamless shopping experience. The company thrives on a robust combination of proprietary brands and global partnerships, catering to a diverse array of beauty and wellness needs. Nykaa's content-driven approach, featuring tutorials and reviews, cultivates a loyal community of beauty enthusiasts.

2. TL;DR of the Business Model

A. Core Insights the Business is Built Around

Nykaa is built on the burgeoning beauty and wellness market in India, tapping into increasing disposable incomes and a shift towards branded, quality products. The business is underpinned by a wide product range, reliable delivery, and an engaging customer experience.

B. Their Moat to Build a Business

Nykaa’s moat includes a strong brand presence, a diverse product portfolio, a loyal customer base, and an efficient supply chain. Their proprietary brands provide a competitive edge by offering higher margins and exclusive products.

C. Market View

The Indian beauty and wellness market is projected to grow at a CAGR of 9% from 2021 to 2026. Key competitors include Purplle, Amazon, and Myntra. However, Nykaa's specialized focus and strong brand identity give it a unique advantage.

D. Current Revenue in Figures 2024

Nykaa's estimated revenue for 2024 is ₹5,500 crores, with approximately 70% from B2C sales and 30% from B2B channels. The SKU mix is around 60% beauty products and 40% wellness and fashion items.

E. Size of the Market, Market Share

The Indian beauty and wellness market is valued at around $20 billion in 2024, with Nykaa holding a market share of approximately 8-10%.

3. How Do They Earn Revenue Today?

A. Detailed Breakdown of Revenue Model

  1. Product Sales: The primary revenue stream comes from selling beauty, wellness, and fashion products via their online platform and physical stores.
  2. Proprietary Brands: Nykaa’s in-house brands like Nykaa Cosmetics, Nykaa Naturals, and Kay Beauty contribute significantly to revenue.
  3. Marketplace Fees: Commission fees from third-party sellers on their platform.
  4. Advertising: Brands pay for premium placements and promotions on Nykaa’s platform.
  5. Subscription Services: Nykaa’s loyalty programs and subscription services, such as Nykaa Privé, add recurring revenue.

4. Breakdown of Their Growth Model

A. ICP (Ideal Customer Profile)

Nykaa targets urban, tech-savvy women aged 18-35 who value quality and branded products. They also cater to men’s grooming and wellness needs.

B. Acquisition Channels