Nykaa: How India’s First Woman-led Unicorn Transformed The Beauty Industry
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The Indian beauty industry has come a long way from one or two brands dominating the market to multiple well-known international brands becoming household names throughout the country. This blog post is dedicated to India’s most popular online beauty destination, Nykaa, which made it possible for Indians to experience the international world of beauty. Read along!
The Beginning: Nykaa’s Journey To The Top
Today, shopping online for makeup and skincare products has become synonymous with Nykaa. But, this wasn’t the case when the brand was first established. Ten years ago, in 2012, the Indian beauty market was not at par with the ones around the globe. While the demand for quality products was increasing, the players in the market couldn’t meet up to the public’s expectations. People often resorted to waiting for their relatives from abroad to come so they could get their hands on international beauty brands. And the ones who couldn’t use the few brands available in the country. Additionally, shopping online was still looked upon with suspicion as hundreds of cases of online fraud would get reported daily.
However, that did not stop Falguni Nayar, who made it the first Indian unicorn startup headed by a woman. An investment banker with a 20-year illustrious career in Kotak Mahindra Bank, Nayar decided to quit the monotonous corporate job at the age of 50 and start from scratch. She noticed there was a growing gap between what the beauty industry in India provided and the public, who always wanted more. The idea struck her when she visited a Sephora store on a trip abroad. She decided to kickstart an all-inclusive beauty brand online that would cater to the Indian shopper’s beauty needs. The rest is history. In a recent interview, she said, “I always believed in the online business, and was convinced that the new generation will rely more on reviews and peer recommendation rather than going to stores.”
Nykaa’s Business Model
Nykaa is a D2C eCommerce beauty brand that follows an inventory-based business model. The brand procures its products directly from the manufacturers and keeps them in its storage units across the country. These products are then sold either on the website of Nykaa or through its offline stores: Nykaa Luxe, Nykaa On Trend, and Nykaa Kiosks. The brand also has its own products that have been a hit among the public. The brand’s valuation crossed the $13 billion mark in its much-anticipated launch on the Indian stock exchanges.
Though Nykaa started off as an online store, it gradually grew to have an omnichannel presence. As of today, Nykaa has over 2 lakh products on its online platform and 80+ offline stores.
5 lessons D2C brands can learn from Nykaa
There is no denying that Nykaa changed the beauty landscape in India. Their journey to success is unbeatable, which got us curious about how they could achieve massive growth within just 10 years. Intrigued with their business model, we dug deep and identified key lessons that any D2C brand can learn and apply to grow their business. Here is what we think helped them conquer the highly competitive beauty industry.
Lesson 1: Leverage Influencer Marketing
Influencer marketing, in simple terms, refers to the technique where brands collaborate with social media influencers or celebrities to promote their products. The below video post is a perfect example of influencer marketing done by Nykaa.
Here’s what sets Nykaa’s Influencer Marketing apart from the other brands:
- Nykaa employs influencers from across the country to promote its brand. They don’t shy away from using regional languages to their advantage during promotions. This shows their thorough understanding of the demographics
- They share content that is educational in nature. They don’t just post salesy content; rather, they post content from which the viewers can benefit. These include various how-to’s, top tips, and more
- They involve the influencers in all their campaigns, be it their ‘Pink Friday sale’ or the newest product launch. The influencers help create hype around the campaign, which in turn leads to tons of engagement on the various platforms
As you plan your influencer marketing campaign here is what you can expect the influencer to do as part of the deal:
- Create eye-catchy, high-quality content, either in the form of images or videos, that can be posted on their social media platforms
- Draft info-rich content that goes in the caption. They can write about the benefits of the products, what they like about it, or even push their audience to go buy the product
- Tagging all the relevant accounts is a must. They can tag your brand’s page along with accounts of fellow influencers to keep the engagement high
Bonus: Here’s our list of top Instagram influencers for D2C businesses in 2022.
Here’s an example of their Influencer marketing program that created a lot of buzz.
As a part of their marketing strategy for their Clay it Cool mask, they collaborated with influencers with a following of less than half a million and garnered a reach of more than three million in days. This goes on to show the power of influencer marketing in today’s social media-first world.
It doesn’t end there. Nykaa also opened its affiliate program for the general public. It allowed people to promote the brand, and make money while at it. Here’s where people can register to be an affiliate marketer at Nykaa.
Investing in influencer marketing consistently also helped Nykaa build trust and loyalty throughout the years. Instead of seeing the technique as a way to achieve short-term goals, the brand went on to really strategize and build its credibility through influencers.
Bonus: Nykaa also expanded its reach through collaborations with celebrities. Be it Jahnvi Kapoor or Katrina Kaif, the brand knows how to attract its target audience effortlessly. Below is an example of how they collaborated with a Bollywood movie that promoted their products throughout the movie.
Here’s what we loved about the post:
- Tagging all relevant accounts
- Listing out the products that have been used
- Using hashtags to increase the reach
- Working with the lead actress to create content
Lesson 2: Create Engaging Content
One thing we love about Nykaa is its content strategy. Be it their social media pages, website, or blogs, they have always managed to pique the audience’s interest with unique content.
For starters, they have multiple social media accounts that handle the different divisions they have. There’s a parent page, @mynykaa, which has posts that are about all the products they offer. The other pages are @nykaafashion, @nykaabeauty, @nykaawellness @nykaaman @nykdbynykaa, and @nykaapro among others. What we loved about these pages is how easy it is to follow just the niche the user wants. For example, if a man wants to follow Nykaa, but doesn’t want to be bombarded with content meant for women, he can choose to follow @nykaaman, which has exclusive content created only for men.
ProTip: One thing you can learn from the above image is how the brand has used different variations of the logo for each division. Logos are a great way to create brand identity and awareness among your audience on social media.
Nykaa doesn’t just focus on these social channels. The brand also creates educational content that helps its customer base tremendously. Let us walk you through Nykaa’s YouTube page to understand this better.
When you land on Nykaa’s YouTube page, you will notice their banner is always updated to feature the latest offers and launches. They are constantly updated so that no one would miss the updates. You can then see their featured video which is also educational in nature
They have also leveraged the “Shorts” feature that allows users to post short and crisp videos, similar to Instagram Reels. See how all their Shorts are educational in nature, helping the viewers with a multitude of problems they face. They also have different playlists for different divisions, like skincare, makeup, haircare, and more. We also like how they have managed to build an engaged community even on YouTube using these constant posts.
Interested to know what we absolutely LOVE about their YouTube strategy? This:
They cater to the entire country even on YouTube. This understanding of the demographics and creating vernacular language content is what we believe led to Nykaa’s grand success.
Their blog is always brimming with amazing content the public loves to devour. Similar to their social channels, their website also hosts blogs dedicated to different divisions.
Notice how their blog posts are always in trend? We also love the topics they write on. They write stuff that matters to their audience – Beauty tips, new products, makeup looks, celebrity looks, listicles, and so much more! They also engage in cross-channel promotions – Their videos from YouTube are also embedded on their website and blogs so the content has a wider reach.
Overall, we LOVE their content strategy, and think it’s definitely bound to inspire you!
Lesson 3: Top-Notch User Experience
It wouldn’t be wrong to say that Nykaa introduced the Indian public to the A-class beauty shopping experience. We are huge fans of the user experience that Nykaa provides.
First things first, their online application is easily navigable. You can see a glimpse of the interface below.
One of the most important aspects of any eComm mobile app is the ability to search for products. Nykaa’s search feature not only remembers your recent searches but also suggests popular categories and brands for you to choose from. The next uber-cool thing is the little widgets right below the search bar. When you click on the widget you like, be it skincare, or the latest trends, it takes you to a page that has all the relevant products. The mobile app also ensures you don’t miss out on the latest offers.
When it comes to the physical outlets, Nykaa is the pioneer in having beauty advisors in all its stores to help the customers. In a conversation with iDiva, Adwaita Nayar, COO at Nykaa said, “I think people don’t know that we have beauty advisors who sit in our office who are available for you to sit and talk to. We have chat functions so you can give us a photo of yours for skin color, and we can help you match your foundation. If you want to talk to a dermatologist, we can hook you up with that.” This makes it clear that Nykaa is highly focused on creating experiences for their shoppers as opposed to just focusing on selling their products.
Nykaa also has other features that set it apart from its competitors like trying on the different products online using AI capabilities, an AI-led routine creator that automatically suggests products for routines that the customers can customize, and exploring various video content posted by a plethora of influencers on the platform, and more.
What we know for sure is that for Nykaa, customer experience is a top priority!
Lesson 4: Offers, Discounts, And Sales
Who doesn’t love offers? Nykaa collaborates with other brands to bring to its customer base offers they cannot refuse.
While they hold clearance sales like any other brand, they also engage in conducting monthly sales depending on any occasion. For example, they conduct sales during religious, national, and international holidays like Diwali, Independence Day, and even Women’s day. One thing they do great during these sales is marketing. They collaborate with influencers and promote the upcoming sale on social media. They also create tons of posts on their social media channel in addition so none of their followers miss out on the offers.
We love how they post these offers on their Instagram Stories and add them to highlights. Notice how they have added a link so the audience can shop from the stories? That is an amazing way to ensure you lead your customers to your webpage. We have more tips up our sleeves on creating Instagram stories that you shouldn’t miss.
Lesson 5: Run Unique Campaigns
We aren’t talking about ad campaigns here. However, if you’d like to learn how to create winning ad campaigns, you can read our blog posts on Instagram Ads and Amazon ads.
Now, we are talking about running campaigns around social causes. Nykaa has run multiple successful campaigns that focused on various social issues. Be it the #BreaktheHashtag featuring the famous actress Taapse Pannu, or the #WhatMakesYouBeautiful featuring acid attack survivor Laxmi Agarwal. What must be noted is that these campaigns weren’t run just for the sake of doing something different. They were run to make a difference in the lives of millions of women. These campaigns focused heavily on establishing the fact that beauty is subjective, and that everyone is beautiful.
That’s all for this edition! We hope Nykaa’s story inspired you as much as it did us.
The objective of our series is to show everyone who dreams of having their own business that anything is possible if you put your mind to it. Is there any other brand that you want us to explore as a part of this series? Let us know in the comments section below.
If you need funds to start your marketing campaigns, your search ends here. We, at Velocity, are India’s largest revenue-based financier and offer growth capital of up to Rs 3 crore to D2C and e-commerce brands. Businesses with healthy revenue streams can get instant funds and can make the repayments as their revenue grows. To get instant funds for your business, you can apply here!
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