Leading beauty and fashion e-commerce platform Nykaa is strategically focusing on the body care and fragrances segments, anticipating them to be significant growth drivers in the near future.
This strategic pivot aligns with the company’s observation of increasing consumer interest in these categories within the Indian market. Simultaneously, Nykaa’s offline retail strategy is gaining considerable momentum, contributing a substantial portion to the turnover of the company’s owned brands.
According to Adwaita Nayar, CEO and Head of Owned Brands at Nykaa, Indian consumers are showing a heightened interest in body care and fragrances. Recognizing this burgeoning demand, Nykaa is making significant bets on these segments to fuel its future growth.
Nayar highlighted the burgeoning fragrance movement in India, noting that Nykaa’s existing fragrance brand, Wanderlust, is already nearing the impressive milestone of ₹100 crore in sales. Further underscoring its commitment to this category, Nykaa is set to launch a new premium fragrance line called ‘Nykaa Perfumery’ soon, indicating a strong push into the fragrance market.
In parallel to its online dominance, Nykaa’s offline expansion strategy is showing promising results. Nayar revealed that approximately 20-25% of the turnover for the company’s owned brands now originates from their physical stores. This significant contribution highlights the effectiveness of Nykaa’s omnichannel approach, catering to consumers who prefer the in-store experience.
To further solidify its offline presence, Nykaa opened an impressive 19 new stores in the fourth quarter of the fiscal year 2025, demonstrating a clear commitment to expanding its retail footprint across India. This expansion allows Nykaa to reach a wider customer base and offer a touch-and-feel experience for its products, particularly in the beauty and personal care segment.
Nykaa’s core beauty vertical continues to be a robust growth engine for the company. In the fourth quarter of FY25, the beauty segment is expected to significantly outperform the broader industry in terms of Gross Merchandise Value (GMV) growth. This strong performance is attributed to strategic investments in customer acquisition over the past several quarters, resulting in consistent order volume growth.
Furthermore, the solid performance of Nykaa’s physical retail outlets, supported by strong same-store sales growth and the accelerated expansion of its store network, has contributed significantly to this growth. The success of both Nykaa’s homegrown brands and its acquired brands under the ‘House of Nykaa’ umbrella has also played a crucial role in driving the beauty segment’s impressive performance.
While the beauty segment continues its strong trajectory, Nykaa’s fashion segment is showing signs of recovery, although its growth has not kept pace with the beauty division. The GMV growth for the fashion segment is projected to be in the high teens, with a sequential improvement observed in the core platform business.
However, the net revenue growth in the fashion segment is expected to be lower due to a muted performance from Nykaa’s owned fashion brands and reduced content-related activities in Q4 FY25, which typically peak in the preceding third quarter. Despite this, Nykaa remains focused on strengthening its fashion offerings and leveraging its omnichannel presence to drive growth in this segment as well.
FSN E-Commerce Ventures Limited, Nykaa’s parent company, anticipates its consolidated net revenue growth for the full fiscal year 2025 to be in the low to mid-20% range, reflecting consistent performance across all quarters. The company’s strategic focus on high-growth categories like body care and fragrances, coupled with the increasing momentum in its offline sales channels, positions Nykaa well for continued expansion and market leadership in the dynamic beauty and fashion landscape of India.
Summary:
- Nykaa is strategically focusing on the body care and fragrances segments as key future growth drivers, with the ‘Nykaa Perfumery’ line set to launch soon.
- The company’s offline retail strategy is gaining traction, contributing 20-25% to the turnover of owned brands, with 19 new stores opened in Q4 FY25.
- Nykaa’s beauty vertical continues to be the primary growth engine, expecting strong GMV growth in Q4 FY25 driven by customer acquisition and robust retail performance.
- The fashion segment is showing sequential improvement but experiencing slower growth in owned brands.
- Nykaa anticipates overall revenue growth in the low to mid-20% range for FY25, driven by its omnichannel strategy and focus on key growth categories.