Nykaa to double up on premiumization after Q1 boost
The Mumbai-based company will now double on driving up premiumisation in the coming quarters, especially at a time when urban consumption has slowed down, Anchit Nayar, executive director and head of beauty business, told analysts on Tuesday.
'We are living in very strange times, where there is very clear uncertainty and pressure on urban consumption. Despite that, Nykaa has managed to bring growth in the mid-20s,' Nayar said. 'I think with the uncertainty, a mixed bag of macro indicators and a highly elevated state of competition of the past several quarters, the growth we've put up is commendable and that goes well for the coming quarters as well.'
Nykaa believes that certain pressures in terms of competition will ease over time, according to Nayar.
In recent months, multiple players have ramped up their beauty offerings leading to a highly competitive beauty retail segment. E-commerce giants such as Flipkart and Amazon are aggressively expanding their beauty and personal care business. Their goal is to reach new customers in smaller cities and towns, and roll out new brands as the category witnesses explosive growth, driven by rising disposable incomes, Mint reported earlier. Apparel seller Myntra's beauty portfolio is said to have grown 105% year-on-year (y-o-y) in FY25, according to the company.
FSN E-Commerce's revenue from operations touched ₹ 2,154 crore in the June quarter, while its profit after tax surged nearly 80% to ₹ 24.4 crore. Nykaa's overall GMV rose 26% to ₹ 4,182 crore.
Nykaa also doubled down its rapid delivery service, Nykaa Now, across 7 cities and over 50 stores last quarter. Mint reported in May about Nykaa's plans to expand its rapid delivery service to more metropolitan cities, anticipating promising growth in the segment as consumer adoption widens.
Meanwhile, Nykaa's fashion portfolio continued to witness muted results in the June quarter with revenue rising to ₹ 170 crore from ₹ 148 crore a year ago. Its GMV, however, grew 25% YoY to ₹ 964 crore, signalling profitability prospects.
'On the fashion side, irrespective of short-term uncertainties, we believe that with some of the fundamental resets we have done to the business and strategically, just investing behind the right pillars--customer acquisition, working more closely with brand partners, and so on," said Abhijeet Dabas, executive vice-president and business head of Nykaa Fashion. "We are a much younger business on the fashion side. We will continue to outstrip market growth in the coming quarters.'
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