Nykaa

Nykaa is an Indian e-commerce company that sells beauty, wellness and fashion
products across websites, mobile apps and 76 offline stores. It is a kind of unicorn
startup, founded in the year 2012 by Falguni Nayar a former managing director at
Kotak Mahindra Capital Company.

Nykaa sells products that are manufactured in India as well as internationally. In

2015, the company expanded itself from online-only to an omnichannel model and
began selling products apart from beauty.

In 2020, Nykaa launched Nykaa Pro and in December 2020 Nykaa Fashion
launched its first store in Delhi, intending to make its fashion business
omnichannel. It also started retailing over 2,000 brands and 200,000 products
across its platforms. This startup is an inspiration for many women who want to
start their e-commerce businesses

SWOT Analysis of Nykaa

Talking about the Nykaa business, let’s understand how this corporation can cater
to different individuals using SWOT Analysis. SWOT Analysis of Nykaa helps us
to understand companies through the lens of internal and external factors. Internal
factors refer to strengths and weaknesses, which can be controlled by the
corporation
To better understand the SWOT analysis of Nykaa, refer to the infographic below:

Strengths of Nykaa

As strength is an essential component of SWOT. Nykaa has several strengths that

make them one of the largest e-commerce companies in the beauty and wellness
sector in India.

 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 in showcasing 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: Since 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 is a factor
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.

Weaknesses of Nykaa

Everyone business has its positive and negative sides, so Nykaa’s. Though Nykaa
is one of the current market leaders in beauty product e-commerce companies in
India, many weaknesses can become a nightmare for Nykaa’s growth.

 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

Opportunities for Nykaa

The environment within which our organization operates offers opportunities. An

organization can identify such opportunities and enjoy benefits arising from them
by planning and executing required strategies.

 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.
Threats to Nykaa

Every coin has two sides, so does Nykaa have.

 E-commerce Regulations: The altering legal framework and the

introduction of new, stricter regulations pose a major threat to Nykaa.
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, 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
poses 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