CASE STUDY ON NYKAA

Submitted by,
Priyadarshini Venkatesalu MFM/23/427

Under the Supervision of Dr.A.Sasirekha Associate Professor

Submitted to,

Department of Fashion Management Studies (FMS)

National Institute of Fashion Technology (N.I.F.T) SH 49A, Vikram Sarabhai Instronics

Estate, Tharamani, Chennai - 600113 Ph. 044 2254 2756, Fax: 91-44 2254 2769
Web: www.nift.ac.in
1. INTRODUCTION
Nykaa is an Indian e-commerce platform that specializes in beauty and wellness products. The
company was founded in 2012 by Falguni Nayar, a former Managing Director at Kotak
Mahindra Capital Company. Over the years, Nykaa has grown to become one of the largest
online beauty and wellness platforms in India. This article will explore Nykaa’s history and
journey, business model, milestones, e-commerce platform evaluation, consumer research
results, investors, IPO, and future growth plans.

2. ABOUT THE BRAND

Nykaa as an online beauty platform started at a time when the market for beauty and personal
care products was largely unorganised. There were only a few reliable sources for consumers to
purchase from. There were only a handful of D2C brands, like Plum, that were picking up and
were known only to beauty enthusiasts. The majority of the sales happened through in-store
retail. Nykaa’s goal was to provide a curated collection of products from well-known brands as
well as its own in-house brand.

Today, Nykaa has grown to become one of the largest online beauty and wellness platforms in
India, with over 17 million monthly active users. The company operates a network of physical
stores as well as an online marketplace that offers over 1,500 brands and 1,30,000 products.
Nykaa has also expanded into the fashion and home decor space with its own in-house brands
and partnerships with well-known designers.

Nykaa provides a carefully chosen collection of products in various categories, such as makeup,
skincare, haircare, bath and body, fragrance, grooming appliances, personal care, and health and
wellness. These products come from both domestic and international brands, including luxury
and premium ones. It offers a mix of established national brands, international brands, luxury
brands, and emerging labels and designers. Nykaa has established separate business verticals and
channels for beauty and personal care brands and fashion brands, recognizing the different
customer journeys involved in purchasing these products. Nykaa also provides personalized
customer experiences and offers a diverse range of content and communities to educate
customers about their products

3. NYKAA’s 3 PILLARS
Consumers
Nykaa provides a seamless shopping experience through its user-friendly platform, offering a
vast array of products, and utilizing informative resources like blogs, articles, and tutorials to aid
in purchase decisions. The platform also features various payment and delivery options, ensuring
maximum convenience and satisfaction for customers.
Partner brands
Nykaa’s digital marketplace allows them to showcase their products to a wider audience,
increase their online presence, and leverage the platform’s extensive customer base.
Additionally, Nykaa offers brand collaborations and partnerships that provide mutually
beneficial opportunities to drive sales and increase brand awareness.
Celebrities and influencers
Nykaa offers a platform for them to showcase their expertise and collaborate with the brand
through campaigns and initiatives. This not only helps the brand promote products to a larger
audience but also provides the celebrity or influencer with an opportunity to monetize their reach
and influence.

4.How Nykaa Works: Have Deep Insight into Lead Aspects of the Brand
The eCommerce beauty brand Nykaa follows an inventory business model helping the brand to
offer the best quality products. Check how Nykaa’s inventory business model:
● The online beauty retailer purchases products directly from stores and manufacturers.
After purchasing the best quality products, it stores it in their warehouses in Bangalore, New
Delhi, and Mumbai.
● Most of Nykaa’s products are sold on its website.
● Customers can even purchase the offline product store, including Nykaa On Trend,
Nykaa Kiosks, and Nykaa Luxe.
● The inventory business model of Nykaa enables the beauty brand with tremendous profit
margins with the ability of product damages lying; businesses can ensure product
authenticity and follow the same working flow to win the market and competitive pricing
using the inventory model. Craft, an advanced beauty service platform, helps your
customers to get the best of your beauty services and products right from the platform.

5. BUSINESS MODEL
Key Partnerships
Nykaa collaborates with various beauty brands, both Indian and international, to offer a wide
range of products. They also partner with logistics and payment service providers to ensure
smooth operations.
Key Activities
Nykaa’s key activities include sourcing and curating beauty products, maintaining an e-
commerce platform, managing inventory, marketing and advertising, providing customer
support, and offering educational content on beauty trends and techniques.
Key Resources
The key resources for Nykaa include its online platform, a vast product inventory, partnerships
with brands, a strong customer base, logistics infrastructure for product delivery, a team of
experts in the beauty industry, and a well-established brand image.
Value Proposition
Nykaa provides customers with a convenient and comprehensive shopping experience for beauty
and personal care products. They offer a diverse range of products, including both affordable and
luxury options, and provide informative content and tutorials to educate and inspire customers.
Customer Segments
Nykaa targets beauty enthusiasts and consumers looking for a wide selection of beauty products.
They cater to customers of different age groups, genders, and preferences, offering something for
everyone.

Channels
Nykaa primarily operates through its e-commerce website and mobile app, where customers can
browse, select, and purchase products. They also have physical stores (Nykaa Luxe) for
customers who prefer in-person shopping experiences.
Customer Relationships
Nykaa strives to build strong customer relationships by offering personalised recommendations,
providing responsive customer support, and engaging customers through social media,
newsletters, and loyalty programs.
Revenue Streams: Nykaa generates revenue through product sales, earning a margin on each
item sold. They also offer advertising and promotional opportunities for brands on their platform.
Cost Structure
Nykaa’s main costs include product sourcing and inventory management, technology
infrastructure, marketing and advertising expenses, employee salaries, logistics and fulfilment,
and maintaining physical stores.
Revenue Streams
Nykaa generates revenue through various streams, including product sales, advertising, and
commissions from third-party sellers.
Product Sales: The primary revenue stream for Nykaa is the sale of beauty and wellness
products. Nykaa offers a wide range of products from various national and international brands,
including its own private label. The company generates revenue by selling these products at a
markup price. In addition, Nykaa offers various discounts, deals, and promotional offers to
attract customers and boost sales.
Advertising: Nykaa also generates revenue through advertising. The company has a large
customer base, which makes it an attractive platform for brands to advertise their products.
Nykaa offers various advertising options, including display ads, sponsored content, and
influencer partnerships. Brands pay Nykaa for advertising space on the website or for sponsored
content on social media platforms.
Commissions from third-party sellers: Nykaa also earns commissions from third-party sellers
who use the platform to sell their products. Nykaa charges a commission on each sale made
through the platform. This commission can vary depending on the type of product, the seller, and
the pricing strategy.
Physical Stores: Nykaa has also established a brick-and-mortar presence, with physical stores in
several cities across India. These stores offer customers the opportunity to try out products
before purchasing them and also provide a range of beauty services. Nykaa generates revenue
through sales made at these stores.

6.CUSTOMER PROFILE
Customer Jobs
● Convenience: Customers want to shop for beauty products from the comfort of their
homes, avoiding the need to visit physical stores.
● Access to Wide Range of Products: Customers expect a diverse selection of cosmetics,
skincare, haircare, fragrances, bath and body products, and wellness supplements.
Pains
● Limited Physical Interaction: Customers may have concerns about not being able to
physically examine or test products before purchasing.
● Difficulty in Decision-Making: Customers may feel overwhelmed by the extensive
product range and need assistance in making informed choices.
Gains
 ● Convenience and Time-Saving: Customer appreciate the ease and efficiency of shopping
online, avoiding the need to travel and browse physical stores.
● Access to Comprehensive Product Information: Customers value detailed descriptions,
reviews, and ratings to make well-informed purchasing decisions.

7.VALUE MAP
Products and Services
● Nykaa offers a wide array of beauty and personal care products from India and
international brands.
● Nykaa provides comprehensive information about products, including ingredients, usage
instructions, and benefits.
● Nykaa incorporates authentic customer reviews and ratings to help customers make
informed decisions.
Pain Relievers
● Nykaa could introduce virtual try-on features using augmented reality (AR) technology,
enabling customers to visualize products before buying.
● Nykaa can provide personalized recommendations based on customers’ preferences,
previous purchases, and browsing history.
● High-quality images, swatches, and videos help customers better understand the product
and reduce uncertainty.
Gain Creators
● Nykaa offers a user-friendly website and mobile app, allowing customers to easily
browse and purchase products from home.
● Nykaa provides informative content, beauty tips, tutorials, and articles to educate
customers about skincare, makeup techniques, and haircare.
● Nykaa ensures prompt and helpful customer support through multiple channels,
addressing queries and concerns.

8. INBOUND LOGISTICS
Supplier Relationships
Strong partnerships have been established by Nykaa with a variety of suppliers, including both
domestic and foreign beauty and wellness companies. These connections are essential to
ensuring that Nykaa's clients have access to a wide selection of premium products.
Procurement and Ordering
Nykaa effectively oversees the procurement process by estimating demand, keeping an eye on
inventory levels, and making orders with suppliers in accordance with those projections. This
guarantees a consistent flow of goods to satisfy consumer demand without incurring undue
expenses for inventory keeping.
Warehousing
Nykaa carefully oversees its storage facilities spread throughout India. These warehouses
function as central locations for receiving, keeping, and overseeing stock. Nykaa can accelerate
order fulfillment and lower shipping costs by carefully positioning its warehouses.
Inventory Management
Nykaa tracks stock levels, keeps an eye on product movements, and makes sure that supplies are
replenished on schedule by using sophisticated inventory management systems.This helps in
minimizing stockouts and optimizing inventory turnover rates.

9. OUTBOUND LOGISTICS
Order Processing
Using automated methods, orders placed by customers on Nykaa's platform are quickly
completed. The warehouse receives the order data and uses them for shipping, packing, and
picking.
Packaging
Nykaa takes care when it comes to packaging, making sure that goods are packaged firmly to
avoid damage during transportation. There are various solutions for environmentally friendly
packaging that complement sustainability programs.
Shipping and Delivery
For shipping and delivery, Nykaa works with reputable logistical partners. Shipping choices
available to customers include normal, express, and, in some cases, same-day delivery. Nykaa
allows users to track the progress of their orders by providing tracking information.
Returns and Refunds
Nykaa effectively handles product exchanges, refunds, and returns using reverse logistics
management. Via Nykaa's platform, customers can start return requests, and the company
facilitates the process, maintaining customer satisfaction and loyalty.
Overall, Nykaa's well-organized inbound and outbound logistics processes contribute
significantly to its operational efficiency, timely order fulfillment, and positive customer
experiences, solidifying its position as a prominent player in the beauty and wellness e-
commerce industry in India.

10. CASE STUDY ON NYKAA

Nykaa, a prominent Indian beauty and cosmetics retailer, encountered several challenges related
to its supply chain and logistics operations. These issues were particularly pronounced due to the
company's rapid growth and the complexities inherent in the beauty and cosmetics industry.
One of the primary issues Nykaa faced was the management of a diverse product range from
various brands and suppliers. This led to challenges in inventory management, as demand for
specific products fluctuated unpredictably. Additionally, ensuring timely delivery of products to
customers across India, including remote locations, posed logistical challenges.

To overcome these hurdles, Nykaa implemented several strategic initiatives. Firstly, they
invested heavily in technology, leveraging data analytics and AI-driven forecasting tools to
predict demand more accurately. This enabled them to optimize inventory levels and reduce
stockouts, improving customer satisfaction.Secondly, Nykaa revamped its logistics network by
partnering with reliable third-party logistics providers (3PLs) and investing in their own
fulfillment centers strategically located across the country. This allowed for faster order
processing and improved delivery times, especially in tier-2 and tier-3 cities.

Furthermore, Nykaa focused on enhancing collaboration with its suppliers and brands. By
fostering closer relationships and implementing vendor-managed inventory (VMI) systems, they
streamlined the procurement process and reduced lead times, ensuring a steady supply of
products.Additionally, Nykaa embraced omnichannel retailing, integrating its online platform
with brick-and-mortar stores. This provided customers with multiple shopping options and
facilitated order fulfillment through store inventory, further optimizing the supply chain.

Overall, Nykaa's proactive approach to addressing supply chain and logistics challenges through
technological innovation, strategic partnerships, and enhanced collaboration with stakeholders
has contributed significantly to its continued success and market leadership in the beauty and
cosmetics industry in India.

11. CONCLUSION
In conclusion, Nykaa's journey through supply chain and logistics challenges underscores the
importance of adaptability and innovation in the retail industry. By leveraging technology,
forging strategic partnerships, and enhancing collaboration with suppliers and brands, Nykaa
successfully overcame its hurdles and established a robust supply chain infrastructure. This not
only improved operational efficiency but also enhanced customer satisfaction through faster
delivery and a diverse product range. Nykaa's case serves as a valuable lesson for businesses
facing similar challenges, emphasizing the critical role of proactive measures and continuous
improvement in navigating complex supply chain landscapes and driving sustainable growth.