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Myntra readies to take on Nykaa in BPC market
With $250 million revenue in FY20, Nykaa accounts for over 30% of the online beauty and personal care, or BPC market
Walmart-backed online fashion store Myntra has ramped up its beauty and personal care portfolio with a clutch of premium brands as it takes on bigger rival e-tailer Nykaa for a larger share of the fashion and beauty market.
Pricey products from Benefit, Bath & Body Works, Smashbox and Minimalist are on offer, as Myntra sets out to double its beauty and personal care offerings by the end of this fiscal year.
The category could be among the top five of two dozen retailed by the marketplace by the end of the year. For the year 2019-20, the company reported a 58% jump in revenue at ₹1,719 crore, according to business intelligence platform Tofler.
But Nykaa leads in market share by a distance. With sales of $250 million in FY20, Nykaa accounts for over 30% of the online beauty and personal care (BPC) market, Jefferies said in its note.
In the last 12 months, Myntra, which is largely known for selling branded apparel, has added over 100 brands to its BPC collection to offer 500 brands. It has built a better catalogue and technology since early 2021 to support the category.
It recently added high-end American cosmetics brand Benefit and listed Smashbox’s pricey makeup products.
The move signifies how e-commerce verticals, which typically sell particular categories, are now broadening their offerings as the pandemic drives more shoppers online.
For consumers, BPC products are a natural extension of their fashion shopping basket, said a senior executive at the marketplace.
Makeup, skincare and fragrance have helped drive growth for the category in the last six months, said Ayyappan R., chief business officer, Myntra. Grooming appliances and hair care have seen consistent growth over the last year.
“We have been building the capabilities that are required for us to sell beauty and personal care because the requirements right from the tech and the supply chain, the way we do the packaging, the way the cataloguing is done, all of these are very different for BPC (when compared to fashion) as a business. We had to build all these capabilities across every single touchpoint,” he said.
Beauty has not been Myntra’s biggest focus up until earlier this year. As it increased offerings, consumer interest has grown.
The retailer reported a 114% and a 104% year-on-year jump in orders in the category in April and May. This was driven by personal care products and fragrances in tier II and III cities. It also posted a 70% jump in basket size.
India’s beauty and personal care category is estimated at $14-15 billion. It is expected to report an average annual growth of 8% in the next five years, according to market researcher Euromonitor. E-commerce accounts for an estimated 5-6% of the BPC category or $800 million in revenue, a note by brokerage Jefferies on Nykaa said.
Nykaa, which is eyeing a stock-market listing later this year, also has over 80 offline stores driving its omnichannel presence.
Analysts at Jefferies reckon Nykaa, which retails over 1,200 brands with content around beauty trends, is a “one-stop-shop” for all beauty needs. As a result, Myntra faces stiff competition scaling its beauty category. But the marketplace will also drive more influencer engagement going forward, said Ayyappan.
Myntra’s wide consumer base gives it an edge to drive frequency of purchases in the beauty category, an analyst said on condition of anonymity.
“This can potentially help them up-sell and cross-sell products, while also increasing the share of spends per consumer,” he added.
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First Published:24 Jun 2021, 12:03 AM IST
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