Gen Z Buyers
Nykaa has grown rapidly in India as it had the first-mover advantage in the online beauty retail space. This segment has been boosted by rising purchasing power and a speedy social media adoption by Gen Z and millennial buyers.
The local beauty and personal care market is expected to grow to $34 billion by 2028 from $21 billion in 2023, according to a September report by Redseer Strategy Consultants and Nykaa.
FSN aims to to nearly triple its gross merchandise value — a measure of sales excluding expenses — for its in-house cosmetics brands by the year ending March 2030 to 60 billion rupees ($685 million), Nayar said.
Its in-house portfolio, which includes brands like Dot & Key and Nykaa Cosmetics besides Kay, racked up about 21 billion rupees of gross merchandise value in the financial year ended March 31.
Shares of the company are up almost 40% this year, outperforming India’s benchmark Nifty 50 Index’s near 4% gain.
“We’d like to strive for profitability margins that some of the world’s best have” of around mid-teens to early-twenties, she said, without sharing details of the current profit margins for in-house brands.
The retailer expects newer launches to drive sales over India’s upcoming festival season, which kicks off in September, Nayar said. It’s also building out its fashion vertical and is keen on expanding a line of in-house lingerie, she added.
