Nature of Demand for Nykaa:

A) Buyers: Retail consumers (Individuals)

B) Purchase Drivers:

● Product: Quality, variety, effectiveness, value for money, ingredient

consciousness (natural/clean beauty).
● Brand: Trustworthiness, reputation, authenticity, innovation, influencer
association.
● Experience: Convenience, accessibility (omni-channel presence), personalized
recommendations, loyalty programs, offers/discounts.

C) Degree of Information Seeking:

Varies based on product category and buyer experience:

● New users/products: High information seeking through ratings and reviews,

influencer tutorials, recommendations.
● Regular users/products: Moderate information seeking, brand loyalty
influences decision.
● Luxury/Premium products: High information seeking due to higher investment.
Information through influencer tutorial and recommendations, as well as
recommendations from the brand itself.

D) Brand Awareness/Loyalty:

● High brand awareness due to extensive marketing, influencer network and

omnichannel presence.
● Growing brand loyalty, but competition exists in the beauty & personal care
market.
● Loyalty exists due to Prive 2.0 – Loyalty programme Nykaa Privé, our esteemed
loyalty programme, has been revamped to provide an enhanced experience to
our valued customers. From the moment they join, Privé 2.0 benefits in unlocking
value and reward points with every purchase and spending milestone. With multi-
tiered membership, customers can easily progress to Gold and Platinum levels
by reaching specific spending milestones. Nykaa Privé offers exclusive perks,
presents, and points such as birthday gifts, reward points multipliers, exclusive
sales, surprise coupons, premium customer care, and free delivery, granting an
all-access pass to the all encompassing world of beauty. As of March 31, 2023,
there were 4.5 Mn Nykaa Prive members.

E) Location of Brand Decision:

● Primarily at home or on mobile app or visiting stores.

● In-store browsing and staff recommendations may influence.
F) Purchase Decision Maker:

● Typically the individual buyer.

● Influencer marketing, In-store browsing and staff recommendations may
indirectly influence.

G) Individual or Group Decision:

● Primarily individual purchase decisions.

● May involve seeking advice from friends/family, but final decision rests with the
buyer.

H) Duration of Decision Process:

Usually quick for a repeat purchase but time consuming for a new product, especially
for beauty/cosmetics. Depends on various factors like -

● Product complexity: High involvement decisions for premium/luxury products.

● Familiarity with brand/product: Faster decisions for repeat purchases.
● Urgency of need: Quick decisions for immediate needs.
● Promotional offers: Limited-time sales can accelerate decisions.

Reasons for success -

● One of the first online retail platforms in India to drive product and influencer-led
education through creative content across video and written formats. It has simplified
purchase decisions for our customers.
● Betting on voice and vernacular - Introduced support in regional language based on
user’s geographic location & Launched pilot project to power our platforms with voice
search
● Increased influencer & affiliate centricity - Launched Nykaa’s Watch & Buy Live
Shopping Platform via which influencers can go live within the Nykaa app to engage
customers •Creators can now publish content to Nykaa’s content feed and build their
profiles and followership
● Creating intellectual properties - Our brand affinity is driven by our sizeable volume of
content, spread across content touchpoints. These IPs have enabled the following for
the business: • Gaining organic traffic • Retaining customers • Driving transactions •
Motivating more brands, sellers and influencers to leverage our platform to get closer to
customers
● Nykaa TV This is our YouTube based platform, which creates educational content with
immersive storytelling across beauty and personal care to engage enthusiasts even
 before they become our customers. As per a RedSeer Report, Nykaa TV is India’s

leading channel exclusively focused on beauty.

● Nykaa Affiliate Programme The programme has been leveraging influencers at a large
scale, enabling external content creators to take to different digital platforms and publish
content under our brand name. This is a community of Gen-Z trend setters, mom
bloggers, beauty, fashion and lifestyle advisors who receive commission for the sales
they drive on our platform. It has contributed to making us the largest influencer network
in the online beauty and personal care sector in India [RedSeer Report, as of March 31,
2021].
● Nykaa Network This is our peer-to-peer social community, which is a one-of-a-kind,
interactive beauty forum to reach millions of members on the network. The network
allows members to chat, participate in ask and answer beauty-related questions, give
and seek advice, discover trends and join beauty-centric conversations.
● Explore The platform provides a ‘watch and buy’ feature where consumers watch
content generated by influencers from our social media channels and shop for featured
products they like simultaneously. We have made its discovery algorithms responsive to
consumer preference based on their search and engagement activities on our platform,
strengthened by tutorials, reviews and product trials.
● Nykaa Beauty Book and Style Files This is our repository of beauty and fashion blogs
with 1,101 articles and blogs published to date.
● Insights and analytics are helping us identify and action customers’ requirements even
before its importance is realised, keeping us one step ahead of the industry
● Seamless experience across channels - Together with online content, engagement in
offline stores elevates the consumer experience to the next level. We are aggressively
expanding our retail store network to provide the touch and feel experience, test and try
elements, and provide the customers the ability to try out newer brands and categories,
which also helps us drive premiumisation. Our ability to engage with the customers in
person and have an interaction based personalised advisory which helps increase
customer experience. It helps increase repeat traffic supported by operational flexibility,
hyperlocal delivery and endless aisle.
● Towns becoming demand hubs Indian retail stories is being driven from beyond the
boundaries of metros. The tier-2 and tier-3 towns are seeing increasing spending power,
access to information and an aspiration to shift from unbranded products to value-
branded products all of which is aiding growth across the digital use-case funnel. 60.4%
of our GMV in Beauty and 64.1% GMV in Fashion vertical comes from tier-2 and tier-3
cities, serving over 27,800 pin codes across the country. We are also working on
increasing our warehouse and retail footprint to further improve distribution with a “closer
to customer” strategy, correspondingly increasing marketing spends to increase
customer conversion and spend in these markets.
● Premiumisation for an aspirational society - With the changing demographics factor,
increasing disposable income among young people, exposure to high-end brands and
limited opportunities to shop abroad has augmented demand for domestic luxury. The
key to being able to buy premium products on an online platform is the authenticity
guarantee. Over the last decade we have established a reputation among our customers
and brand partners for this. We have the largest assortment of luxury products, with
leading global high-end brands, with exclusive agreement to sell in India with many of
them
● Demand for homegrown brands Another trend that has recently caught up, is that of
customers increasingly supporting homegrown brands. . As a house of brands, we are
not only collaborating with large multi-national brands, but are also striving to provide
homegrown brands a platform and access to a large customer base.
● Diverse portfolio of owned brands We have a portfolio of 15 owned brands, which leaves
us room for white space innovation in the Indian lifestyle industry to address gaps in
products, pricing and quality.
● Technology for enhanced experience Our platform is designed to drive discovery among
customers. Leveraging information on multiple parameters and consumer activities on
our platforms, as well as with detailed attributes against each product in the inventory,
we showcase personalised content and products throughout every customer’s shopping
journey. They can also try on certain products virtually through a virtual-tryon feature on
our mobile application.
● Omnichannel shopping experience Some products often require a ‘touch and feel’
experience to arrive at a purchase decision, especially certain higher value and/or
complex categories, such as fragrances and make-up. Yet consumers also love the
option to experience the same product from the comfort and leisure of their homes. We
launched our first physical store in 2014. Our well trained beauty advisors are experts in
advising customers on products that are best suitable to them. As of now they have 154
 physical stores in the country.

● Assisted buying Assisted buying has been our key to driving awareness and making
sales. We offer on-demand, one-to-one chat services with our beauty, fashion and
grooming experts to help increase engagement with customers while resolving concerns
or technical questions that they may have. At our stores, the BPC advisors replicate the
experience, they use our mobile application to complete an ‘endless aisle’ online
purchase for the consumer, whether or not the product is available at the store.
● Integrated marketing Our integrated marketing approach is also our key differentiator,
evident through Nykaa Pro, Nykaa TV, the Nykaa Affiliate Programme, and the Nykaa
Network. By seamlessly integrating content, community, and commerce, Nykaa delivers
a comprehensive, personalised beauty experience. • Nykaa PRO offers exclusive beauty
products, deals, and masterclasses for professionals. • Nykaa TV’s immersive content
engages enthusiasts’ pre-purchase. • The Nykaa Affiliate Programme leverages
influencers to create a community of trusted advisors. • The Nykaa Network fosters
interactive beauty conversations. • The acquisition of LBB further enhances brand
discovery and content delivery, offering a curated product selection and unique shopping
journey, reinforcing Nykaa’s industry-leading position
● House of brands expansion - BPC We launch our owned brands across multiple
categories by understanding the gap in the Indian BPC market and also to provide a
curated assortment across all skin types and colours in India. Our BPC in-house brands
witnessed significant growth. We are also growing the distribution network to reach more
customers
● Category expansion

● International Market expansion