Nykaa seeks to explore beyond cosmetics
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Beauty e-commerce firm Nykaa is looking to go beyond cosmetics. The start-up has forayed into the apparel segment with the launch of lingerie on its platform last month.
The products are already being sold under the section called Glam Fit and Pop Up, which is an experiment to attract customers beyond the domain of beauty, according to a top executive of the company.
The company is already getting close to 5% of its turnover from this segment and targeting almost 10% by December, said Falguni Nayar, chief executive officer, Nykaa.
Currently, a consumer buys five to six times in a year, and the aim is to increase that, Nayar said, declining to share a specific target.
While so far the company has only focused on beauty, the aim is to offer other beauty-related categories through the launch of these Pop Up pages. For instance, the start-up experimented with the fashion jewellery segment in May. It, however, shut it down in a month’s time, citing lack of range in the products it could offer. After, lingerie, it plans to launch eye-wear section under the pop-up category, which will consist of sunglasses, by the end of the year.
“So, we have been looking at other adjacencies that Nykaa could explore. However, we are not diluting beauty (segment). Pop-up is an extension to what we offer as a separate page on the website,” said Nayar, adding pop-ups are experiments that will be continued depending on the consumer response.
The products are currently sourced from online lingerie vendors such as Clovia and PrettySecrets.
Nykaa was looking to raise Rs.100 crore and end this year with sales of Rs.80-100 crore (https://www.livemint.com/Companies/LM5XPiYTUKunXMlskVrjML/Nykaa-looks-to-raise-Rs-100-crore-expand-private-label-offe.html), Mint reported in March.
Expansion into new categories could likely help the company in achieving the sales target.
The company claims to be getting five million monthly visitors on its website and 100,000 orders with an average basket of Rs.1,400, as of March.
Nykaa, which launched its private label products in beauty in 2015, also operates through four offline, brick-and-mortar stores across Delhi and Mumbai. However, these pop-ups will remain a feature of the online market, while the offline will purely focus on beauty products, Nayar said.
Founded in 2012, Nykaa is backed by investors, including the family of Marico Ltd chairman Harsh Mariwala and Hexaware Technologies Ltd chairman Atul Nishar. It raised $9.5 million in October last year, and is also looking to raise Rs.90-100 crore in the next six-10 months to support its private label business and expand into offline stores, Nayar said.
The women’s innerwear market, worth Rs.9,540 crore, is one of the fastest growing categories within women’s apparel. This category is growing at a compounded annual growth rate of 14%, and is expected to reach Rs.18,380 crore by 2017, according to a Technopak report.
“Companies that have built a brand and a loyal set of online customers are today trying to exploit the same by exploring what else they can sell to customers using the same medium without confusing them. There are many companies that were known as verticals in the e-commerce and are adding a lot of adjacency to the overall umbrella and most of them play in the lifestyle space. The only question is how will they consistently differentiate and get the supply chain right,” said Sreedhar Prasad, partner, e-commerce and start-ups at KPMG.