A STUDY ON MARKETING STRATEGIES OF NYKAA

MAJOR PROJECT

Submitted in partial fulfilment of the requirements for BBA

programme of Guru Gobind Singh Indraprastha University, Delhi.

Submitted by
KRITI THAKUR
04219201721
Submitted to
Mrs. Sugandha

Lingaya’s Lalita Devi Institute of Management & Sciences

Mandi Road, Chhatarpur
Delhi-110047

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 DECLARATION

I hereby declare that the project report, entitled ‘MAJOR PROJECT’, submitted
to Guru Gobind Singh Indraprastha University, New Delhi, is a record of an
original work done by me under the guidance of Mrs Sugandha Ma’am,
Lingaya’s Lalita Devi Institute Of Management And Sciences, Mandi Road,
New Delhi-110047 and this project work has not performed the basis for the
award of any degree to our best knowledge.

Place: New Delhi Candidate’s Signature

Name: KRITI THAKUR
Roll No.: 04219201721

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 CERTIFICATE

This is to certify that KRITI THAKUR, BBA VI semester, Enrolment No.

04219201721 has successfully completed the Major project. This project has
been done in fulfilment for Bachelor of Business Administration course. The
student has also made her project to my entire satisfaction and as per the
requirement of the course.
The work has not been anywhere else for the award of degree. All source of
information has been duly mentioned.

SIGNATURE
Mrs Sugandha Ma’am

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 ACKNOWLEDGEMENT

It is my pleasure to be indebted to various people, who directly or indirectly

contributed in the development of this work and who influenced my thinking,
behaviour and acts during the course of study. I express my sincere gratitude to
Dr. Pranav Mishra, the worthy Director of Lingaya’s Lalita Devi Institute of
Management & Sciences, for providing me an opportunity of doing this project
under his leadership.
I also extend my sincere indebtedness to Mrs Sugandha Ma’am who provided
her valuable suggestion and precious time in accomplishing my project. I also
take the opportunity to express my sincere gratitude to each and every person,
who directly or indirectly helped me throughout the project and without anyone
of them this project would not have been possible.

The immense learning from this project would be indelible forever.

(Sign & Name of the student)

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 TABLE OF CONTENTS

S.NO TOPIC PAGE NO.

1. Declaration 2
2. Certificate 3
3. Acknowledgement 4
4. List of figures 5
CHAPTER 1
5. Introduction
6. Literature Review
7. Research Methodology
8. Objectives of the Project
CHPATER 2
9. Company Profile - Nykaa
10. Vision/ Mission
11. Products/ Services
12. Marketing Mix
13. SWOT Analysis
14. Marketing Strategies Undertaken
CHAPTER 3
15. Data Analysis and Interpretation
CHAPTER 4
16. Conclusion and Recommendations
17. Bibliography
18. Questionnaire

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 CHAPTER 1
INTRODUCTION

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1.1 INTRODUCTION TO MARKETING

Marketing is a fundamental concept in the world of business, encompassing a range of

activities aimed at creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners, and society at large. At its core, marketing
revolves around understanding the needs and desires of target markets and then crafting
strategies to fulfil those needs profitably. It involves a deep understanding of consumer
behaviour, market trends, competitive landscapes, and the dynamics of various
distribution channels.

Marketing is not just about selling products or services; it's about building relationships
with customers and stakeholders. It involves conducting market research to identify
consumer preferences, developing products or services that meet those preferences,
pricing them appropriately, and promoting them effectively to the target audience.
Moreover, marketing extends beyond the initial transaction, focusing on customer
satisfaction, retention, and loyalty through ongoing communication and support.

In today's digital age, marketing has evolved significantly, with an increasing emphasis
on online platforms, social media, and data-driven decision-making. Businesses leverage
digital marketing techniques such as search engine optimization (SEO), content
marketing, social media marketing, email marketing, and analytics to reach and engage
with their target audience more effectively.

Overall, marketing is a dynamic and multifaceted discipline that plays a crucial role in
driving business success by creating value for both customers and organizations.

 IMPORTANCE OF MARKETING

Marketing is crucial for businesses because it serves as the bridge between a company
and its target audience, facilitating communication, engagement, and value creation. At
its core, marketing is about understanding the needs and desires of customers and then
delivering products or services that fulfil those needs in a way that is profitable for the
business. One of the primary reasons marketing is essential is its role in building brand
awareness and visibility. Effective marketing activities, such as advertising, public
relations, and digital marketing, help businesses reach their target audience and make
them aware of their offerings, distinguishing them from competitors in the marketplace.

Moreover, marketing plays a pivotal role in driving sales and revenue generation. By
identifying and understanding consumer preferences and behaviours, businesses can
develop targeted marketing strategies to attract potential customers, convert leads into
sales, and ultimately drive revenue growth. Through techniques such as market
segmentation, targeting, and positioning, businesses can tailor their marketing efforts to

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specific customer segments, maximizing the effectiveness of their campaigns and
optimizing return on investment.

Furthermore, marketing fosters customer relationships and loyalty. Through ongoing

communication, engagement, and customer support, businesses can build strong
relationships with their customers, earning their trust and loyalty over time. Effective
marketing strategies not only attract new customers but also retain existing ones, leading
to repeat business, referrals, and positive word-of-mouth recommendations, which are
invaluable assets in today's competitive marketplace.

Additionally, marketing is essential for businesses to adapt to changing market dynamics

and stay competitive. By monitoring market trends, analysing consumer behaviour, and
gathering feedback, businesses can continuously refine their marketing strategies and
offerings to meet evolving customer needs and preferences. Marketing also enables
businesses to differentiate themselves from competitors by highlighting their unique
value propositions and positioning themselves effectively in the minds of consumers.

In conclusion, marketing is vital for businesses because it drives brand awareness, sales,
customer relationships, and adaptation to market changes. By investing in effective
marketing strategies, businesses can achieve their objectives, sustain growth, and remain
competitive in today's dynamic business environment.

 DIFFERENT TYPES OF MARKETING

There are various types of marketing strategies and approaches that businesses employ to
achieve their objectives. Some of the key types include:

1. Digital Marketing: This encompasses marketing efforts conducted through digital

channels such as websites, social media, search engines, email, and mobile apps.
Digital marketing strategies include search engine optimization (SEO), content
marketing, social media marketing, email marketing, pay-per-click (PPC)
advertising, and more.

2. Content Marketing: Content marketing involves creating and distributing valuable,

relevant, and consistent content to attract and engage a target audience. This can
include blog posts, articles, videos, infographics, e-books, podcasts, and other forms
of content designed to educate, entertain, or inspire potential customers.

3. Social Media Marketing: Social media marketing focuses on leveraging social

media platforms such as Facebook, Instagram, Twitter, LinkedIn, to promote
products or services, engage with customers, and build brand awareness. It involves
creating compelling content, interacting with followers, running targeted ads, and
analyzing performance metrics.

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 4. Influencer Marketing: Influencer marketing involves partnering with individuals or
entities with a significant online following (influencers) to promote products or
services to their audience. Influencers can include celebrities, industry experts,
bloggers, and social media personalities who can help businesses reach a larger and
more engaged audience.

5. Email Marketing: Email marketing involves sending targeted, personalized

messages to a list of subscribers to promote products, announce special offers,
provide updates, or nurture customer relationships. Effective email marketing
campaigns are designed to deliver relevant content at the right time to encourage
engagement and conversions.

6. Search Engine Marketing (SEM): SEM involves promoting websites by increasing

their visibility in search engine results pages (SERPs) through paid advertising (PPC)
and organic strategies (SEO). Businesses bid on keywords related to their products or
services to display ads at the top of search engine results, driving targeted traffic to
their websites.

7. Traditional Marketing: While digital marketing has become increasingly prevalent,

traditional marketing methods such as print advertising, television commercials, radio
ads, direct mail, outdoor billboards, and event sponsorships still play a role in
reaching certain audiences and achieving specific marketing objectives.

These are just a few examples of the diverse types of marketing available to businesses. The
most effective approach depends on factors such as the target audience, industry, budget,
goals, and market conditions. Many businesses use a combination of different marketing
tactics to create a comprehensive and integrated marketing strategy.

1.2 LITRATURE REVIEW:

1. Shankar (2011): “Social media has advanced from simply providing a platform
for individuals to stay in touch with their family and friends. Now it is a place
where consumers can learn more about their favourite companies and the products
they sell. Marketers and retailers are utilizing these sites as another way to reach
consumers and provide a new way to shop. “Technology related developments
such as the rise of powerful search engines, advanced mobile devices and
interfaces, peer-to-peer communication vehicles, and online social networks have
extended marketers’ ability to reach shoppers through new touch points”

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2. Chu (2011): also found that users who are Facebook group members maintain a
more favourable attitude toward social media and advertising. Users who have
more positive attitudes toward advertising are more likely to join a brand or a
retailer’s Facebook group to receive promotional messages. Based on this result,
Chu (2011) suggests that a link exists between consumers’ use of and engagement
in group applications on a social media sites. The relationship between
consumers’ use of and engagement with group applications influences the rate and
effectiveness of advertising on social media, particularly Facebook. Generally, as
Chu (2011) notes, Facebook’s college-aged users have the most favourable
attitudes toward social media advertising and are the largest growing
demographic, which suggests that social media sites are a potentially rich platform
for online advertising campaigns, especially for companies with a younger target
market.

3. Cox (2010): also investigated the correlation between age and attitude and found
that social network user attitude toward online advertising formats (i.e. blogs,
video, and brand channel or page) differed to some extent across age groups. She
explains that users who fall in the 18-28 age brackets had strong positive attitudes
towards blogs, video, and brand channel ad formats. This was because users’
found these ad formats to be eye catching, informative, and amusing. The 35-54
age groups preferred ad formats on video and brand channels because they found
them to be more eye catching, informative, and had better placement within the
online 11 page layout. Overall, online advertising formats with positive attributes
are welcomed by users; however, ads that are intrusive or interfere with online
social networking activities, such as pop up, expandable, or floating formatted ads
were disliked by network users.

4. Zinnbauer and Honer (2011): User generated content produces social currency
for marketers because it helps define a brand. User generated content describes
“the sum of all ways in which people make use of social media, usually applied to
describe the various forms of media content that are publicly available and created
by end users. Therefore, social currency is when individuals share a brand or
information about a brand (Zinnbauer and Honer 2011). Social currency greatly
affects brand performance and is a concept that can be linked to Bourdieu’s
(1977) and Coleman’s (1988) idea of social capital. Social capital is shaped on a
personal level and occurs in the relationships among individuals.

5. Taylor, Strutton, and Thompson (2012): found however, that social media
users’ message sharing behaviours are also attributed to the need for self-
enhancement. When consumers perceive an online advertisement to be consistent
with their identity, they are more likely to share the message with others because
it is representative of who they are and what they like. Thus, “advertisers should

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 consider the symbolic and self-expression properties of their online ads and match
them to targeted consumers’ self-concepts”.
1.3 RESEARCH METHODOLOGY:
To conduct this research, the target population was children, middle age men and women.
Targeted geographic area of Delhi/NCR, sample size of 50 people was taken. 50 people were
given the questionnaire, and the questionnaire was the combination of both open ended and
closed ended questions. Some people were also interviewed to know there prospective finally
the collected data was analysed and complied to arrive the conclusion and suggestions.

TYPES OF RESEARCH METHODOLOGY -

In this study, quantitative type of research methodology is used. Researchers usually use a
quantitative methodology when the objective of the research is to confirm something. It
focuses on collecting, testing and measuring numerical data, usually from a large sample of
participants. They then analyse the data using statistical analysis and comparisons.

The quantitative method used for this research is Questionnaire.

DETERMINATION OF SOURCES FOR DATA -

There are two main sources of data:

1. Primary Data: It consists of original information’s collected for specific purpose.

Primary data for this research; data are collected through a direct source like survey to
obtain the first-hand information is others resources are written below. Example-
questionnaire and one to one discussion.
2. Secondary Data: It consists of information that already exists somewhere and has
been collected for some specific purpose in the study. Example- Internet, Book, past
research.

This report depends on both primary and secondary data where sources have been utilized to
gather data about ‘Nykaa’ brand. Articles, research reports, and questionnaire were explored
to get the knowledge of the past intercessions. Web references have additionally been
accomplished for the reasons and goals of the review.

QUESTIONNAIRE -
A questionnaire is a research instrument that consists of a set of questions for the purpose of
gathering information from respondents through survey or statistical study. A research
questionnaire is typically a mix of close-ended questions and open-ended questions. A
questionnaire is a list of questions or items used to gather data from respondents about their
attitudes, experiences, or opinionsA survey is a research method used for collecting data from
a pre-defined group of respondents to gain information and insights on various topics of
interest. The purpose of a questionnaire is to gather data from a target audience. It will
include open ended questions, closed ended questions, or a combination of both. As

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participants fill out a questionnaire, they're giving valuable titbits of data. The data collected
can be quantitative or qualitative.

SAMPLE SIZE -
Sample size refers to the number of participants or observations included in a study. This
number is usually represented by n. The sample size is a term used in market research
for defining the number of subjects included in a sample size. By sample size, we understand
a group of subjects that are selected from the general population and is considered a
representative of the real population for that specific study.
For this study the sample size was taken as 70 people.

LIMITATIONS OF STUDY -
However, I shall try my best in collecting the relevant information for my research report, yet
there are always some problems faced by the researcher. The prime difficulties which I face
in collection of information are discussed below: -
1. Short time period: The time period for carrying out the research was short as a result of
which many facts have been left unexplored.
2. Lack of resources: Lack of time and other resources as it was not possible to conduct
survey at large level.
3. Respondents are concerned about their privacy and are afraid to share their personal details
which hinges the actual analysis of the project.

1.4 OBJECTIVES OF THE STUDY:

 To study the marketing strategies of Nykaa.
 To acknowledge the market share of Nykaa.
 To analyse and interpret the findings.

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 CHAPTER 2
COMPANY PROFILE

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 2.1 COMPANY PROFILE:
Nykaa is an Indian e-commerce platform specializing in beauty, wellness, and personal
care products.
Company Name: Nykaa
Founded: 2012
Headquarters: Mumbai, Maharashtra, India
Founders: Falguni Nayar (a former investment banker, as an e-commerce platform for
beauty and wellness products)
Industry: E-commerce, Beauty, Wellness, Retail
Our Mission: To create a world where our consumers have access to a finely curated,
authentic assortment of products and services that delight and elevate the human spirit.
Our Vision: Bring inspiration and joy to people, everywhere, every day.
Our Values:
1. Be bold and be good
2. Be better everyday
3. Be the customer’s champion
4. A culture of belonging
5. Sustainability in every action
6. One Nykaa

HISTORY OF NYKAA:
Nykaa is an Indian e-commerce company headquartered in Mumbai. It sells beauty, wellness
and fashion products through its website, mobile app, and over 100 physical stores. In 2020,
it became the first Indian unicorn start-up headed by a woman.
Nykaa sells products which are manufactured in India as well as internationally. In 2015, the
company expanded from online-only to an omni channel model and began selling products
apart from beauty. As of 2020, it retails over 2,000 brands and 200,000 products across its
platforms.
In April 2012, Falguni Nayar, a former managing director at Kotak Mahindra Capital
Company, founded Nykaa as an ecommerce portal curating a range of beauty and wellness
products. The brand name Nykaa is derived from the Sanskrit word nayaka, meaning actress
or "one in the spotlight". The website was first launched around Diwali 2012, and was
available commercially in 2013.
In 2015, the company expanded from online-only to an omni channel model and began
selling fashion products.

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In 2018, Nykaa launched Nykaa PRO. It is a premium membership program that provides
users special access to professional beauty products and offers on the Nykaa app. In 2018, the
company also launched an online beauty forum called Nykaa Network.
In March 2020, Nykaa raised ₹100 crores (US$13 million) from SteadView Capital at a
valuation of US$1.2 billion, making it a unicorn start-up. This was followed by another
tranche of ₹67 crores (US$8.4 million) funding by SteadView in May 2020.
In October 2020, the company launched Nykaa Man, India's first multi-brand ecommerce
store for men's grooming. The company expanded into fashion by launching Nykaa Design
Studio, which was renamed to Nykaa Fashion.
In November 2020, global asset management firm Fidelity invested in the company through a
secondary sale of shares from an existing equity investor.
In December 2020, Nykaa Fashion launched its first store in Delhi, making the fashion
business omnichannel.
Nykaa opened its initial public offering (IPO) on 28 October 2021. The IPO raised ₹5,352
crores (US$670 million) at a valuation of US$7.4 billion. Nykaa was publicly listed on the
NSE and BSE on 10 November 2021, and its price rose by 89.2% on opening day, valuing
the company at nearly US$13 billion. Founder Falguni Nayar, who owned a 53.5% stake in
the company, became India's wealthiest self-made female billionaire on the listing day.

BUSINESS MODEL:
Nykaa is a D2C consumer products e-commerce brand, that relies on an inventory-based
business model. The company purchases its products directly from the manufacturers and
keeps them in its designated warehouses located in New Delhi, Mumbai, and Bangalore.
These products are sold either on the website of Nykaa or through its 3 offline store formats:
Nykaa Luxe, Nykaa On Trend, and Nykaa Kiosks.
The inventory-led model of business of the company helps the company witness high-profit
margins and has resulted in a profitable business. Besides, the company also ensures the
authenticity of products and follows competitive pricing.
Nykaa experienced a major growth in 2015, moving from an online-only business model to
an omni channel strategy. This change allowed the business to sell things through physical
stores as well as its website and apps. Enhancing consumer reach and engagement has been
made possible by the implementation of the omni channel approach.
Nykaa stores the stock of goods directly from the manufactures; the products are stored in
Nykaa’s warehouse from where the brand directly sold the products to customers who want
it. Nykaa’s business and operational model helps the company to bring huge capital to its
table. The beauty brand also has more than 35 offline stores.

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2.2 PRODUCTS/ SERVICES PROVIDED BY NYKAA:
Nykaa deals in 5 major categories namely;
1. Personal Care Products –
 Makeup
 Skincare
 Haircare
 Appliances
 Bath&Body
 Natural
 Mom and Baby
 Health and Wellness
 Fragrance
 Lingerie and Accessories
2. Brands –
 Maybelline New York
 Lakme
 Nykaa Cosmetics
 M.A.C
 Loreal Pais
 Huda Beauty
 Biotique
 Faces Canada
 Lotus
 Nivea
 Olay
 Kay Beauty
3. Luxe –
 Makeup
 Skincare
 Fragrance
 Haircare
 Bath&Body
 Gifts
4. Nykaa Fashion –
 Women
 Men
 Kids
 Home
 Houses of Nykaa

5. Beauty Advice

2.3 MARKETING MIX OF NYKAA:

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  Product
One of the most important aspects of Nykaa's marketing strategy is their focus on product
quality. They invest heavily in research and brand development to ensure that their products
are sourced at the best they can be. This commitment to quality has helped them build a
strong reputation amongst consumers and industry experts. This focus on product quality and
multi-channel promotion has helped Nykaa become one of India's leading beauty retailers.
Their products are now available in over 1000 stores across the country, and they plan to
expand internationally soon.

 Pricing
Cost Based Pricing
With a cost-based pricing strategy, Nykaa beauty can determine the cost of producing the
product and mark up accordingly.
Value Based Pricing
Since its inception in 2014, Nykaa has offered competitive prices on all its products. This has
allowed the company to grow significantly, as customers always look for a great deal. In
addition, Nykaa offers free shipping on orders over Rs. 500, which furthers entices customer
development. Nykaa relies on Hillsbrad Darnassian Trade Goods and other cost-effective
methods to keep prices low. This ensures that customers can purchase their desired products
without spending too much money.
Offers and discounts
Nykaa has a number of seasonal discounts and offers available to users of its ecommerce
platform. The Pink Friday sale is Nykaa's biggest event, offering huge discounts on a variety
of brands to entice customers. The special pink Friday sales offer numerous discounts on
nykaa's products.

 Place
Nykaa uses onmi channels, i.e. website as well as physical stores to carry out its business.

 Promotion
Nykaa has focused heavily on various social media platforms and television as part of its
marketing strategy in recent years. This has resulted in high levels of engagement from
Nykaa's audience. The company's content marketing strategy is also very practical, which
includes creating high-quality video content and blogs that resonates with its target audience.
In order to creatively utilize the power of content, the brand has assembled a team of
enthusiastic young professionals to create a unique content strategy. The brand creates video
content and blogs on multiple digital platforms and social media pages thus forming a huge
customer base.

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2.4 SWOT Analysis of Nykaa:

 Strengths

 Innovation: Nykaa is constantly adding innovations to its product range and offerings
to capture the attention of customers and meet the dynamic business environment by
shifting from online-only to omnichannel.
 Strong Social Media Interaction: Nykaa has been able to attract many social media
users as potential customers with regular online campaigns, contests such as Nykaa
Beauty Femina Awards, brand endorsement, magazines, and web series etc.

 Wide Range of Products: Nykaa has very well managed to showcase a wide range of
products in both online and offline stores to prevent customers from migrating away from
the brand due to lack of stock.
 Geographical Presence: Geographic presence in different regions is considered to be one
of the company’s greatest strengths. It helps to determine the reach of the company in the
target market and ensures easy accessibility.
 Affordability: As the ability to pay and willingness to buy a factors determining demand.
Nykaa also has considered this factor and has priced its product keeping in mind the needs
of different classes.
 Less Charging Suppliers: Access to suppliers that offer raw materials at a lower cost can
improve the overall efficiency of the business.
 Property Rights: A company may own various intellectual property rights that can make
the product offering unique and exclusive, making it difficult for competitors to imitate.
 Successful Market Track Record: Nykaa has a successful track record of launching new
products in the domestic market.

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 WEAKNESS

 Poor Waste Management: Nykaa has been criticized by environmentalists for its poor
waste management and inability to integrate sustainability into its business operations.
 R&D: Low spending on research and development activities may weaken the company’s
performance due to a lack of local/international market knowledge.
 Delivery Charges: It offers free delivery for orders above Rs. 700, which excludes some
of the prospective buyers.
 Customer Care: Nykaa has not been able to resolve customer complaints so effectively.
 Decision-making Process: Decision-making at Nykaa takes too much time, leading to
costly delays in bringing new products to market.
 Replicable Business Model: Nykaa’s business model can be easily replicated despite of
patents and copyrights the firm possesses.

 OPPORTUNITIES
 Expanding Reach to Population: The exponential growth of the population and
especially the existing or potential customer segments is a great growth opportunity for the
company.
 E-commerce & Networking: The emergence of e-commerce and social media
networking as a trend can be a great opportunity for Nykaa. It can ensure a strong online
presence on various social networks.
 Government Subsidies: Government-provided subsidies and other measures that make
the business environment friendlier are a positive external environmental factor for Nykaa.
 Matching Lifestyle of Customers: Improving customers’ lifestyles and standards means
more consumption of consumer goods and services and more opportunities to encourage
purchases.
 Business Model: Nykaa’s business model is climbing a new ladder to increase its
international reach and boost profits.
 New Technologies: The development of new technologies to support the production and
delivery process of products can be used to integrate innovation into business operations.
Advanced Technology integration can reduce costs, improve efficiency, and lead to the
rapid adoption of innovative products.
 Following Trends: The changing needs, tastes, and preferences of customers can be an
opportunity if the company has good market knowledge.

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  Threats
 E-commerce Regulations: The altering legal framework and the introduction of new,
stricter regulations pose a major threat to Nykaa. The inability to comply with the
changing regulations increases the risk of costly litigation.
 The Rise in Competitors: The increasing number of direct competitors such as purplle,
and indirect competitors such as small businesses selling organic and cruelty-free products
affects the company’s ability to maintain and expand its customer base.
 Health Concern: The growing trends of organic and cruelty-free products pose a great
danger if the products offered are not environmentally friendly. Nykaa should now focus
more on expanding its reach to natural and organic products.
 Economic Conditions: During the pandemic, the purchasing power declined to an extent
and the business got affected in the first phase of lockdown as the economic conditions of
people deteriorated.

2.4 TOP 5 MAJOR COMPETITORS OF NYKAA:

 Amazon India: Amazon’s e-commerce platform in India offers a wide range of
beauty and personal care products. With its vast customer base and extensive product
offerings, it posed significant competition to Nykaa.
 MyGlamm: MyGlamm is an online makeup brand headquartered in Mumbai,
Maharashtra. Founded in October 2017, MyGlamm is part of the Good Glamm Group
— South Asia’s largest content-to-commerce beauty and personal care conglomerate.
 Plum: Plum is a science-driven beauty and grooming company that offers vegan and
cruelty-free products.
 Purplle: Purplle is an Indian beauty and cosmetics e-commerce platform that
competes directly with Nykaa. It focused on providing a range of beauty products and
services to customers.
 Sephora India: Sephora, an international cosmetics and beauty retailer, has a
presence in India. While it targeted a more premium market segment, Sephora still
competed with Nykaa in the beauty and skincare space.

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2.5 BUSINESS LIFE CYCLE OF NYKAA:
 Founding and Early Growth (2012-2015):
 Nykaa was founded in 2012 by Falguni Nayar, a former investment banker, with the
vision of creating a one-stop online destination for beauty and wellness products in
India.
 Initially starting as an e-commerce platform offering a curated selection of cosmetics
and skincare products, Nykaa quickly gained traction among Indian consumers
seeking convenient access to premium beauty brands.
 During this phase, Nykaa focused on building its brand reputation, expanding its
product catalog, and establishing itself as a trusted online retailer in the beauty
industry.
 Diversification and Market Expansion (2016-2018):
 Buoyed by its early success, Nykaa embarked on a phase of diversification and
expansion between 2016 and 2018.
 The company diversified its product offerings to include a wider range of beauty and
wellness categories such as haircare, fragrances, personal care, and men's grooming
products.
 Nykaa also expanded its presence beyond the online realm by opening brick-and-
mortar stores in select cities across India, enhancing its omnichannel retail strategy
and providing customers with an immersive shopping experience.
 This period marked Nykaa's transition from being solely an e-commerce player to a
comprehensive beauty and lifestyle brand with a multi-channel presence.
 Strategic Partnerships and Funding Rounds (2019-2021):
 In the late 2010s, Nykaa continued to scale its operations and attract strategic
partnerships and investments to fuel its growth trajectory.
 The company secured funding from prominent investors and venture capital firms,
enabling it to further expand its product assortment, enhance its technology
infrastructure, and strengthen its supply chain capabilities.
 Nykaa leveraged strategic collaborations with beauty brands and influencers to drive
brand awareness, customer engagement, and product innovation, solidifying its
position as a market leader in the Indian beauty and wellness industry.
 Maturation and Consolidation (2022):
 By 2022, Nykaa had already established itself as a prominent player in the Indian
beauty and wellness industry.
 The company focused on consolidating its market position by strengthening its core
offerings and expanding its customer base.
 Nykaa leveraged its e-commerce platform to offer a wide range of beauty and
wellness products, including skincare, haircare, makeup, and personal care items.
 It continued to invest in marketing and branding efforts to maintain its competitive
edge and increase brand visibility both online and offline.

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  Diversification and Vertical Integration (2022-2023):
 During this period, Nykaa pursued diversification strategies to expand its product
portfolio and tap into new market segments.
 It ventured into adjacent categories such as fashion, accessories, and lifestyle products
to cater to evolving consumer preferences and capture a larger share of the retail
market.
 Nykaa also explored vertical integration by launching its private label brands across
various product categories, offering customers exclusive and high-quality options at
competitive prices.
 This phase marked Nykaa's transition from being solely a beauty e-commerce
platform to a comprehensive lifestyle destination.
 Omnichannel Expansion and Offline Presence (2023):
 Recognizing the importance of omnichannel retailing, Nykaa accelerated its offline
expansion efforts in 2023.
 The company opened more brick-and-mortar stores across key cities in India,
providing customers with a seamless shopping experience across online and offline
channels.
 Nykaa's offline stores served as experiential hubs where customers could explore
products, receive personalized recommendations, and engage with beauty experts.
 This omnichannel approach helped Nykaa strengthen its brand presence and drive
sales through multiple touchpoints, catering to diverse consumer preferences and
shopping behaviors.
 International Expansion and Global Outreach (2024):
 Building on its success in the domestic market, Nykaa ventured into international
markets to capitalize on global opportunities.
 The company strategically expanded its presence in select international regions,
leveraging its strong brand equity and product offerings tailored to local preferences.
 Nykaa adopted a phased approach to international expansion, focusing on markets
with high growth potential and favorable regulatory environments.
 This phase marked Nykaa's evolution into a global beauty and lifestyle brand,
solidifying its position as a market leader in the beauty industry beyond the borders of
India.

2.6 PRODUCT LIFE CYCLE OF NYKAA

 Introduction Phase (2012-2015):
 In the early years of Nykaa's operation, the company introduced a variety of beauty
and wellness products into the Indian market.
 These products included cosmetics, skincare, haircare, fragrances, and personal care
items from both local and international brands.

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  Nykaa focused on building brand awareness, establishing its online platform, and
gaining the trust of consumers who were exploring the convenience of purchasing
beauty products online.
 During this phase, Nykaa's product offerings were relatively limited compared to later
years, but they laid the foundation for its growth and expansion.
 Growth and Expansion Phase (2016-2019):
 As Nykaa gained momentum and consumer acceptance, its product range expanded
significantly to cater to a broader audience.
 The company introduced new product categories, private label brands, and exclusive
collaborations, capitalizing on emerging beauty trends and consumer demands.
 Nykaa's growth during this phase was fueled by its omnichannel strategy, with the
launch of physical retail stores complementing its online presence.
 The product portfolio grew to include not only beauty and skincare products but also
fashion, accessories, and wellness items, reflecting Nykaa's evolution into a
comprehensive lifestyle destination.
 Maturity and Diversification (2020-2022):
 By the early 2020s, Nykaa had established itself as a leading player in the Indian
beauty and lifestyle industry, with a diverse and extensive product offering.
 The maturity phase saw Nykaa focusing on consolidating its market position,
optimizing its product mix, and enhancing customer engagement.
 Nykaa continued to innovate and introduce new products, leveraging data analytics,
customer feedback, and industry insights to identify emerging trends and preferences.
 The company also expanded its reach into tier II and tier III cities, further broadening
its customer base and solidifying its presence across urban and rural India.
 Adaptation and Global Expansion (2023-2024):
 In the most recent years, Nykaa has been adapting to changing consumer behaviors,
market dynamics, and technological advancements.
 The company may have intensified efforts in digital innovation, personalized
shopping experiences, and sustainability initiatives to stay ahead in the competitive
landscape.
 Nykaa might have explored opportunities for international expansion, introducing its
products to new markets beyond India and leveraging its brand recognition to appeal
to a global audience.
 Additionally, Nykaa may have continued to diversify its product offerings, exploring
new categories, and partnerships to remain relevant and meet the evolving needs of
consumers.

2.7 DETERMINATS OF MARKET POSITION OF NYKAA:

Nykaa is a market leader in the online beauty and personal care market (BPC) operated by
FSN E-Commerce Ventures. Online Beauty and Personal Care Markets in India have posted
a CAGR of 48% over the last three years, grabbing a market share of about 15% of the
India BPC Market as of 2022. However, online penetration of the BPC market in India is
much lower than that of developed economies like China and the United States.

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Nykaa is engaged in the business of selling beauty, personal care and fashion products
through its omnipresent channel. It is the largest player in the online BPC market with a
37% market share. The company sells products online through its mobile application,
website, and physical stores. Nykaa’s portfolio includes domestic and international brands
and its brands. Company also serves the unorganised BPC space through their Superstore app
delivering to 1.1 lakhs transacting retailers in 700 cities as of March 31, 2023. Nykaa’s
revenue has grown at an unbelievable CAGR of 70% since 2017.

 SOURCES OF REVENUE:

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1. Nykaa – Sale of Beauty and personal care
 Nykaa started its business in 2012 by selling a vast range of BPC products online.
 They currently provide delivery services to approximately 98% of the available
pin codes across India. Along with this Nykaa also has 145 physical stores as of
31st March, 2023 in 60 cities. Management has indicated these stores turn
EBITDA profitable in less than a year of launch.
 This segment is managed by an inventory-led model within which the company
buys products directly from brands or their authorized distributors and sells them
on its platforms. This ensures the authenticity of products sold and ensures timely
delivery and availability of the product.
 BPC products, especially cosmetics, have one of the highest average retail
markups in the retail consumer product space. According to Crowe, the
average retail markup on cosmetics in the USA is about 50 to 60%. This ensures
room for margin expansion for Nykaa.
2. Nykaa Fashion: Sale of Apparel and Accessories
 In 2018, Nykaa created a marketplace to sell apparel and accessories.
 Within this segment, Nykaa is trying to establish a niche position by focusing
on curation. The company offers the latest season designs at a total price.
 Nearly 88% of this segment follows the marketplace model. Under this
model, the brands or their authorized distributors sell directly on Nykaa’s
platform, and Nykaa receives a commission on products sold. The marketplace
model leads to capital efficiency as trends in the fashion business change
quickly and frequently compared to the BPC segment.
 Nykaa’s take rate is 8% which is reasonably lower than other players like
Amazon and Flipkart, who have a take rate of 10-15%. Take rate is the
commission charged by the marketplace to the seller for facilitating the
transaction on its platform.
3. Nykaa: Other Segments
 Others includes new businesses like NykaaMan, eB2B platform ‘Superstore
by Nykaa’, International, LBB and Nudge.
 During FY21 to FY23, the Others category experienced substantial growth at
45% CAGR, mainly as a result of Nykaa’s entry into unorganized offline retail
BPC segment through Superstore, the eB2B business.
 SuperStore: Nykaa’s eB2B distribution platform, launched in Q2 FY2022
offers access and expertise in Beauty and Personal Care to underserved
markets such as beauty stores, pharmacies, hair salons, and Kirana stores.

 WHAT MAKES NYKAA UNIQUE:

1. Content Driven Customer Engagement
 Nykaa has created a moat in both BPC and fashion segments through content-
driven customer engagement. Firstly, Nykaa uses a variety of ways to generate
content and then personalizes this content for its users to drive sales of
relevant products.

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  Earlier, due to the limited availability of beauty and make-up products, the
majority of Indian women were unaware of make-up regimes. Nykaa helped
fill this gap by providing a wide assortment of beauty products. The company
raised consumer awareness and educated consumers on the use and benefits of
each beauty product.
 The strong content engine increases the number of transacting customers and
order value and improves Nykaa’s profit margin.

2. Expanding own brands

 Nykaa also sells its own brands which are manufactured through contract
agreements on its channels. Private label brands fetch a higher margin for the
company.
 Nykaa has total 27 owned brands including 13 brands under BPC segment and 14
brands under Fashion segment. Owned bands are available on online channels,
physical stores and third party multi brand outlets and other online marketplaces.
 The Gross Merchandise Value (GMV) of Nykaa’s 5 owned brands exceeded Rs
1,000 million (Annualized run rate based on Q3FY24 GMV).
 The GMV of owned brands in BPC segment has increased by 40% CAGR
between FY20 and FY23, while that in fashion segment has increased by 142%.
3. Operating parameters
i. Visits- Number of visits to the websites and mobile applications
ii. Annual Unique Transacting Customers (AUTC) – It is the number of customers who
have placed at least one order on its websites, mobile applications, or physical stores
during the last 12 months. Nykaa’s AUTC in BPC has grown at a 30% CAGR over
FY19-23, this number is 4X in case of the fashion segment. Further company’s omni-
channel strategy could increase this number significantly.
iii. Order per customer – It represents the frequency of orders placed by customers. This
has remained steady for the BPC segment over the last 3 years at 3 orders per
customer. Orders per customer increased marginally to 3.5 in FY23. The company is
trying to increase this by using content-driven marketing.
iv. Average Order Value (AOV) – AOV had seen a sharp jump in FY21 when Nykaa
increased the minimum order value for availing of free delivery. AOV has remained
constant since then. The AOV of the fashion business is higher than that of the BPC.

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 v. Gross Merchandise Value (GMV) is the monetary value of orders inclusive of taxes
and gross discounts, if any, across websites, mobile applications, and physical stores
before product returns or order cancellations and including sales to and through third-
party channels. GMV is a function of all the above operating parameters. Between
FY19 and FY23, Nykaa’s GMV increased by a staggering 56% CAGR. GMV
contribution from BPC continues to decline, while fashion and other segments are
increasing.
vi. NSV to GMV – Net Sales Value (NSV) is defined as GMV minus discounts, returns,
and cancellations. A lower NSV to GMV indicates a high level of return &
cancellation or higher discounts. The NSV to GMV ratio for BPC is stable at 60%,
indicating that returns and discounts account for 40% of GMV. The NSV to GMV
ratio of the Fashion business has been steadily decreasing, and this is concerning.
vii. Revenue to NSV – A higher Revenue to NSV is seen in the BPC segment due to
advertising revenue. The fashion business’s NSV differs from its revenue due to the
marketplace model, which only accounts for commission revenue.

2.8 EXPENDITURE V/S REVENUE ANALYSIS:

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Expenditure of last three financial years-

Financial Year Expense Incurred (Amount in Crores)

FY21 2386
FY22 3753
FY23 5135
Revenue for last three years-

Financial Year Revenue Generated (Amount in Crores)

FY21 1,582
FY22 3,774
FY23 4,300

EXPENDITURE V/S REVENUE ANALYSIS-

Financial Year Expenditure Revenue Cost-Benefit in %
FY21 2386 1,582 - 50.8%
FY22 3753 3,774 + 0.56%
FY23 5135 4,300 - 19.4%
2.9 NYKAA’S MARKETING STRATEGY:

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1. Marketing through the website
Abiding by the extensive Nykaa marketing strategy, the brand has gone to great
lengths to advertise, whether on its website or through its mobile application. Nykaa
places great importance on brand positioning through the website, which means that
new and updated material is constantly available to the target audience. The business
uses blogs, tutorials, and targeted ads on its main platform to increase online sales.
The website aims to make a difference in the beauty and fashion industries. Also, it
has been focusing on bringing quality items and services to people at massively
discounted prices. The platform appears to have a lot of potential for future growth
and dominance.
2. YouTube marketing
The Nykaa marketing strategy comprises a comprehensive YouTube marketing plan.
Nykaa has a YouTube channel called “Nykaa TV” that provides individuals with
video assistance for utilizing cosmetics and fashion products, and staying current in
society. The firm does not sell its items on its YouTube channel; instead, it focuses on
providing its target audiences with consumable content such as beauty, personal care
tips, makeup hacks, and much more. Nykaa’s YouTube playlist has a wide range of
content, including beauty horoscopes, bridal makeup techniques, celebrity beauty
secrets, and so on. They assist users and consumers in selecting the right products and
utilizing them correctly by providing a variety of how-to videos. In addition, the firm
uses YouTube ads to reach out to its customers.
3. SEO
Nykaa uses search engine optimization (SEO) services to improve organic traffic and
create brand visibility. Keeping up with industry developments has also helped it stay
ahead of the competition. Nykaa has implemented SEO to improve its content with
possible keywords that rank high in search results. The beauty brand has also
optimized its blogs and articles to be quickly indexed and searched by Google.
4. Email marketing
Nykaa has cleverly used email marketing to its full potential. As part of its
promotional efforts, the company sends out emails to highly engaged buyers,
including trending content that provides a glance at current industry trends. These
emails also present an early look at any upcoming sales, urging consumers to visit the
online store. Their email marketing plan has performed exceptionally well, with high
open rates, engagement rates, and conversion rates. It has clearly been achieving the
overall Nykaa marketing strategy goals.
5. Influencer marketing and building a network
When compared to more traditional platforms, influencer marketing remains one of
the most effective and cost-efficient ways to communicate with customers, and is,
hence, an essential element of the Nykaa marketing strategy. Nykaa relies heavily on
influencers and content creators to promote new brand launches and sales, despite
having actor Janhvi Kapoor as its brand ambassador. Influencers are an essential part
of the company’s content marketing strategy since they help educate and assist
customers in making the best decisions for themselves. Nykaa believes in cultivating
long-term connections with influencers to enhance consumer trust and engagement. It

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 has created a community of people who share ideas and suggestions, get inspired,
learn, and watch new videos, through this strategy. The company has developed the
finest plan for retaining customers and attracting new ones by implementing this
strategy. It caters to both the upper and middle classes. At the same time, it got global
recognition with its highly publicized collaboration with Indian actress Katrina Kaif.
Nykaa Network is an interactive beauty website where users may speak with other
beauty enthusiasts. They can also get beauty advice from experts. The brand also
provides gifts with special orders to make customers feel delighted with their
purchases. It is an excellent method to increase customer retention.
6. Social media marketing
The company maintains accounts on many social media platforms. It has six official
accounts, dedicated to the main brand, Nykaa Fashion, Nykaa Fashion, Nykaa Beauty,
Nykaa Man, and Naykd by Nykaa (a lingerie brand). The team ensures that the Nykaa
marketing strategy is followed to roll out on-point, informative, and engaging content.
They create a massive buzz before their special Pink Friday sales through influencers
and live sessions with experts. With bite-sized content that is easy to consume, Nykaa
is ruling the social space with its stellar content.

Nykaa's top Digital Marketing Campaigns

 Nykaa Femina Awards
Nykaa Femina Awards is an annual event that recognizes and celebrates the achievement of
women in India. The awards are given in various categories like beauty, business,
entertainment, and more. The Nykaa Femina Awards were first held in 2013 and have since
become one of the most prestigious events for women in India. The award ceremony is
usually held in Mumbai and plays host to some of the biggest names in India, from celebrities
to businesswomen. The awards are given to recognize excellence in various fields and inspire
others to strive for success. The awards are judged by a panel of esteemed judges, including
experts in their respective fields, who review nominations submitted by the public. Several
categories are divided between awards in beauty, lifestyle, entertainment, business, and
leadership categories. Several international brands also partner with this widely popular event
Femina yearly to showcase their products.

 #AllThatYouLove with Nykaa!

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Nykaa Beauty launched one of its largest beauty events, featuring Janhvi Kapoor. The ad is
called "All That You Love," It celebrates its customers' unabashed relationships with its
beauty products. Nykaa has become a source of joy for women across the country to find and
access all they love by offering fast, convenient, and worry-free shopping experiences.

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 CHAPTER 3
DATA INTERPRETATION AND
ANALYSIS

1. Gender

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 Out of all respondents; 60 were female and 40 were male.

2. Age Group

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 Out of all respondents; 43% were in the 15-20 age group, 44% were in the 21-30 age
group, 9% were in the 31-40 age group and 1% were in the above 40 group.

3. How did you become aware of Nykaa ?

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 Out of all respondents; 55% became aware from social media ads, 28% became aware
from the television ads and 16% became aware from recommendations.

4. How long have you been a customer of Nykaa ?

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 Out of all respondents; 47% were using Nykaa from only past 6 months, 26% from
the past one year till three years, 21% from 6 months till one year and only 4% were
using Nykaa from past 3 years.

5. What are your usual purchases?

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 Out of all the respondents; 41% use Nykaa to purchase makeup, 29% use it to
purchase skin care, 17% use it to buy bath and body products and only 11% use it to
purchase hair care.

6. How often do you purchase ?

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 Out of all respondents; 25% buy from it frequently; 39% buy from it sometimes, 26%
buy rarely from nykaa and only 8% were not consistent buyers.

7. How do you purchase ?

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 Out of all respondents; 64% purchase from Nykaa app, 28% buy from official website
of nykaa and only 6% buy from nykaa physical stores.

8. Is it easy navigating through Nykaa's website/ app ?

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 Out of all respondents; 77& feel that navigating through nykaa app was easy, 9%
disagree and 12% are not sure.

9. Why do you choose Nykaa ?

41
 Out of all respondents; 42% choose it because of the quality of products, 31% because
of variety of products, 13% for the pricing and only 12% for the discounts and offers
provided by nykaa.

10. Why do you think others choose Nykaa ?

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Out of all respondents; 46% feel others choose because of availability of products,
26% for fast delivery, 15% for easy payment options and only 11% for after sale
services.

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11. What issues do you face while purchasing from Nykaa ?

Out of all respondents; majoroity of people have never faced any issue while
purchasing from Nykaa.

44
12. Do you purchase from Nykaa Fashion ?

Out of all respondents; 53% also purchase from nykaa fashion and rest 46% do not.

45
13. What factor do you keep in mind while purchasing from Nykaa ?

Out of all respondents; 35% keep reviews in mind while purchasing, 28% quality,
24% pricing and only 12% keep advertising in mind.

46
14. What other apps do you purchase from ?

Out of all respondents; 30% use mamaearth, 23% use ajio, 27% use purplle, 10% use
tatacliq and others from various other sources.

47
 15. Do you think Nykaa is affordable for majority of people ?

Out of all respondents; 50% think that nykaa is affordable, 37% think otherwise whereas rest
12% are unsure.

48
16. Which marketing channel influences your purchase decisions on Nykaa the
most ?

Out of all respondents; 48% are influenced by social media ads, 26% are influenced
by influencers, 12% use online reviews and tv commercials.

49
17. Would you recommend Nykaa to others ?

Out of all respondents; 73% would recommend to others, 19% are unsure and rest 6%
would not recommend it to others.

50
18. How would you rate your shopping experience from Nykaa ?

Out of all respondents; 66% were satisfied, 30% were neutral and 3% were
dissatisfied.

51
19. How satisfied are you with Nykaa's services ?

Out of all respondents; 66% were satisfied, 30% were neutral and 3% were
dissatisfied.

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 CHAPTER 4
CONCLUSION

53
4.1 CONCLUSIONS:
1. Nykaa has built a strong relationship with its consumers by understanding their needs and
preferences. The company offers personalized recommendations and provides useful content
on its website and social media platforms. This helps build trust and loyalty among
customers.
2. Given that most of Nykaa's customers are online, the company has invested heavily in
digital marketing. It uses various channels such as search engine optimization, social media
advertising, and email marketing to reach its target audience.
3. Nykaa uses data analytics to understand consumer behavior and trends associated with the
beauty industry. This helps them build a strong marketing strategy around product
assortment, pricing, promotions, and other aspects of their business process. As a result, they
are able to offer products and services that are relevant to their target market.
4. Nykaa has blended creativity with data-driven decision-making to craft a strong marketing
strategy that has proven to be a significant factor behind their success.

4.2 RECOMMENDATIONS

1. Build a strong direct-to-consumer relationship

2. Invest in digital marketing
3. Use data to drive decision-making

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