Nykaa forms alliance with Apparel Group for Gulf foray

As part of the alliance, the two partners will form a new entity that will sell these products in six countries comprising the Gulf Cooperation Council (GCC) region in a bid to tap the market opportunity and growth potential in the area.

The new company will be owned 55% by Nykaa unit FSN International Pvt. Ltd with Apparel Group holding the remainder, Nykaa said in a regulatory filing. Financial details of the partnership were not disclosed. Nykaa hopes that it will be able to create a multi-brand beauty retailing business in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).

“Poised for accelerated growth, especially in the beauty and personal care category, the GCC presents a large opportunity for Nykaa to extend its highly focused value offering and drive the region’s offline and online retail growth story with the Apparel Group," according to the statement.

This would mark Nykaa’s debut in the international market, a step that would likely help the Falguni Nayar-led company partly insulate its operations from its home market of India. The company currently sells some of its products in the UAE through Noon.com.

Founded by Sima Ved in 1996, Apparel Group sells more than 75 brands, including Charles & Keith, Skechers, Aldo, Nine West, Aeropostale, Jamie’s Italian, Tim Hortons, Cold Stone Creamery, Inglot and Rituals across 14 countries through a network of more than 2,000 retail stores.

The alliance “will help Nykaa in leveraging the Apparel Group’s robust offline retail network and deep market relationships to build distinctive GCC-focused beauty offerings" Nykaa said. The new digital platform is expected to go live in the next six months, Nykaa chief executive Falguni Nayar said in a press conference.

“This alliance is going to be a new chapter in our expansion journey as we look forward to leveraging each other’s strengths and offer unique value proposition to our consumers in the GCC region," said Ved, founder and chairperson, Apparel Group, in the statement.

Nykaa cited a Red Seer report as saying that Saudi Arabia and the UAE, two of the region’s biggest beauty and personal care markets, were sized at $17.1 billion and $6.6bn billion respectively in 2021, and are forecast to expand at a compound annual growth rate of 7% and 9% respectively in the next 3 years.

Nykaa has been bringing global brands to Indian consumers through its Global Store. It partnered with Canadian skincare brand The Ordinary earlier this year. The company also offers brands such as Canada’s Murad, UK’s Charlotte Tilbury, and Priyanka Chopra Jonas’ Anomaly. Set up in 2012 by investment banker-turned-entrepreneur Nayar, its online marketplace sells products for both women and men in categories including skincare, haircare, fragrances, bath and body, and luxury products. Nykaa also has in-house brands such as Nykaa Naturals, Nykaa Cosmetics and Kay Beauty. Nykaa, run by FSN E-Commerce Ventures Ltd, is an omnichannel retailer with over 4,500 brands, and a network of 112 retail stores.