Eyeing for omnichannel expansion, Indian fashion and beauty retailer Nykaa plans to strengthen its offline presence and open 300 physical stores in 2022. The company’s omnichannel expansion plan sets it on course to make its foothold stronger than before in the Indian cosmetics and fashion domain. Besides consolidating its presence, it is set to accelerate its exceptional revenue growth following its 57 percent increase in revenues during 2019 to 2020, according to data and analytics company GlobalData.
According to GlobalData Q4 2021 Consumer Survey, online remains the most preferred option for shopping beauty and grooming products in India. However, 63 percent* of respondents still prefer shopping beauty and grooming products from physical stores. With a strong foothold in the online space, Nykaa aims to act upon consumers’ preference of offline channels that offer a trial of products to determine the quality and nature of the product.
“Nykaa displayed exceptional performance in the online cosmetics & fashion retail landscape during 2019 to 2020, which was among the most non-essential categories during the pandemic. With an established online presence, Nykaa now plans to capture market share in India’s overall cosmetics and fashion market, which is expected to be valued at INR14.1 trillion (US$ 188 billion) in India by 2025. The retailer’s strategy to expand offline will help it to cater to consumers who prefer to try on cosmetics & beauty and fashion products before purchasing,” commented Ankita Roy, retail analyst at GlobalData.
“While the overall revenue increased, the retailer witnessed a 96 percent dip in its quarterly income during Q2 2021 (September quarter) as the company invested heavily in marketing activities ahead of the IPO. However, the retailer’s long term growth strategies will cover these initial costs and help it to bounce back to growth in the subsequent quarters. Given the dynamic retail landscape, companies need to adopt an omnichannel approach to provide seamless shopping experiences to customers across all sales channels, including online, mobile, and physical stores,” he added.
In October 2021, Nykaa made its public debut after filing for an IPO, with a valuation of nearly US$14 billion. The company is among the top IPOs with the highest listing gains in 2021.
Roy concluded: “As the company went public, investors’ confidence in the retailer increased manifolds thus leading Nykaa to stick to its long-term growth strategies. The listing gains will help the retailer to fulfil its omnichannel strategies and make advancements in its primary online operations.”
*Data taken from GlobalData’s survey of 6,000 APAC consumers, aged 16 above conducted in early December 2021