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  1. Nykaa hopes to turn profitable in 2018-19

Nykaa hopes to turn profitable in 2018-19

Beauty retail company Nykaa that sells cosmetic products both online and offline expects to turn profitable in FY19, Falguni Nayar, founder and CEO, told FE.

By: | New Delhi | Published: May 18, 2018 3:50 AM
Nykaa, Nykaa TVC, Nykaa’s maiden TVC, Nykaa’s campaigns, Nykaa ad campaign Falguni Nayar, Nykaa founder and CEO.

Beauty retail company Nykaa that sells cosmetic products both online and offline expects to turn profitable in FY19, Falguni Nayar, founder and CEO, told FE. “We are very close to being Ebitda-positive and have very less loss. Therefore, we believe that in FY19, the business would turn profitable,” Nayar said. Nykaa at present has a GMV (gross merchandise value) run rate of Rs 100 crore. The company claims that it posted a 166% growth in net revenue to Rs 570 crore in FY18, against Rs 214 crore for FY17.

However, it did not provide its complete financials for year. “We are structured in a manner as per which we have only had domestic investors because the aim was to become a multi-brand retailer. Also, we have been able to reduce our marketing cost, including cost of customer acquisition, which is a key reason behind less loss,” Nayar said.

The company follows an inventory-led model. Currently, more than 60% of its order falls under repeat purchases. While 40% of the sales come from mass products such as Nivea and Neutrogena, 45% sale is generated by premium products, while luxury items contribute 15%. The average ticket size ranges between Rs 1,200 and Rs 1,250. Margins earned from the sale of products is around 20-45%.

Online contributes about 95% to Nykaa’s business at present, while the remaining comes from its brick-and-mortar stores. It operates three store formats with the largest being the recently opened flagship Nykaa Luxe store of 2,500 sq ft at DLF Chanakyapuri, New Delhi. Apart from adding 38 new stores by March 2019, the company plans to increase the total number of warehouses to six from the existing four.

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