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Beauty e-commerce firm Nykaa ventured into private label products with the launch of its nail paints in November 2015.
Beauty e-commerce firm Nykaa ventured into private label products with the launch of its nail paints in November 2015.

Nykaa expects private label revenue contribution to double in 2017-18

Beauty e-commerce firm Nykaa is expecting a Rs750 crore turnover, 20% of that coming from its private label

New Delhi: Mumbai-based beauty e-commerce firm Nykaa expects its private label revenue contribution to double in financial year 2017-18, said a top executive of the company on Thursday.

“We are on track to register Rs250 crore revenue for this year (FY2016-17), 10% (of which) will be from private label... In next year (FY2017-18) we are looking at Rs750 crore turnover, 20% of that should be from private label," said Nykaa’s founder Falguni Nayar in an interview.

The company ventured into private label products with the launch of its nail paints in November 2015. The private label brands earn margins of 40-60%, which is 10-20% more than what the company earns by selling branded products on the platform.

Since last year, Nykaa has also launched its own line of kohl, lipsticks and is looking to introduce more products in at least 10 beauty categories, such as eye makeup, essential oils, among others.

Founded in 2012, Nykaa started as an online retailer of beauty products. It currently lists products from 450 brands across categories such as make up, skin, hair, among others.

With horizontal marketplaces such as Amazon and Flipkart also offering beauty products, Nykaa does not consider them as competition. “Even though they may be offering beauty products, that cannot match the range of high-end brands that Nykaa offers." said Nayar.

Mint reported in August, that Nykaa was going beyond cosmetics to offer other beauty-related categories. The company had forayed into the apparel segment with the launch of lingerie on its platform in July, which contributed 5% of the revenues. The company is building on this segment by on-boarding more brands so that the category grows to contribute 10% of the revenues, said Nayar.

Nykaa, (FSN E-Commerce Ventures Private) is backed by investors, including the family offices of Marico Ltd chairman Harsh Mariwala and Hexaware Technologies Ltd chairman Atul Nishar. It raised $9.5 million in October last year.

On 8 December Max I Ltd (a wholly-owned subsidiary of Max Ventures and Industries Ltd) bought 1.99% stake in Nykaa for an undisclosed amount. Nayar attributes this as a follow up funding to Rs82 crore it raised in September in a round led by Sunil Munjal and the Mariwala family.

The company plans to use the funds for increasing its warehouse capacity and add four more offline stores to its existing four across Delhi, Mumbai and Calcutta. These offline stores only sell private label beauty products which currently contribute less than 5% to the revenue.

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