Nykaa Surprises Market With Expansion Into Chia Seeds, Cooker

Cosmetics-to-fashion retailer Nykaa is quietly making moves to consolidate its position in the country's heated $60 billion e-retail market. It has been expanding its product range beyond its traditional categories in a bid to emerge as a lifestyle brand that caters to all aspects of its customers' lives.The Nykaa site strategically caters to segments such as health food, wellness, home furnishing, kitchen essentials as well as accessories like jewellery and footwear. A quick search on the app shows that a wide range of items like breakfast cereals, dry fruits, chia seeds, peanut butter, cookware, Zippo pocket lighter, small kitchen appliances, handbags, lamps, whey protein, etc., are available for purchase. However, the homepage doesn't visibly reflect these adjacencies as being part of the offering..Lifestyle products have been listed on Nykaa since 2016 and the segment currently contributes to less than 2% of the platform’s gross sales, a Nykaa spokesperson told NDTV Profit in an emailed statement. The company didn't respond to specific queries on how it plans to expand the categories.Interestingly, shopaholics questioned by NDTV Profit were surprised to learn that Nykaa was selling food products, cookers and even Zippo lighters. Some of them, though, were aware of its offerings like jewellery.According to Ravi Saxena, managing director, Wonderchef, the company has been in partnership with Nykaa since 2021 for categories like coffee machines, smart appliances, nutri-blend and cookware. Other non-core products that retail on Nykaa include those from health food startup True Elements, The Whole Truth and DLF Brands' Pure Home + Living.Experts found the addition of these unconventional items on Nykaa app intriguing. They view the Mumbai-based retailer's strategy to diversify its portfolio, positioning itself as a one-stop-shop for all lifestyle-related needs, as an attempt to spruce up sales and protect its turf amid stiff competition posed by a new contender: Reliance Retail Ltd.-backed Tira. Both Nykaa and Tira are vying for supremacy in India's beauty and personal care space, that according to Redseer is projected to grow 10% annually to Rs 2.5 lakh crore by 2027 as against Rs 1.6 lakh crore in 2022. They also compete with Tata Cliq Palette, Myntra and Shoppers Stop."Given the intense competition, and high costs of customer acquisition and retention, every retailer—whether offline or online—looks at maximising the frequency, pumping up average transaction values and to push complementary higher margin products to the customer," said Devangshu Dutta, founder of retail consulting firm Third Eyesight, adding that Nykaa is seemingly "stretching bit too far" to make the most of the female traffic. "At the current scale, Nykaa doesn't seem to have any specific differential advantage over any horizontal peer, though it could build competencies and stronger consumer connect in future over the additional categories."In an investor presentation, Nykaa founder and Chief Executive Officer Falguni Nayar said that the company's dependence on its mainstay beauty and personal care business had reduced over time. In term of gross merchandise value, the share of BPC was 67% in FY24, down from 98.3% in FY19. The fashion category had 26.3% share in Nykaa’s GMV, with the remaining 6-7% contribution coming from segments like NykaaMan, eB2B platform Superstore by Nykaa and other verticals. Overall, Nykaa's revenue from operations grew 24% to Rs 6,386 crore in FY24 from Rs 5,144 crore in FY23. Consumer pullback in discretionary spending and heightened competition have caused growth to slow for both its beauty and fashion businesses. Going ahead, Nayar expects its core beauty business to grow at a compounded annual growth rate of mid-to-late 20s till FY28, while Nykaa Fashion aims to grow 2.5-3 times and achieve breakeven by fiscal 2026.Latika Chopra, analyst at JP Morgan, believes achieving this pace of growth will require higher investment amid rising competition. “The pace of new customer acquisitions will have to accelerate,” she said in a report. Analysts at HDFC Securities says Nykaa fashion remains a "work in progress" as its path to profitability remains unclear despite stated ambition..Nykaa Parent Can Deliver 37% Returns, Says Equirus On Initiating 'Long'

Nykaa Surprises Market With Expansion Into Chia Seeds, Cooker

Lifestyle products have been listed on Nykaa since 2016 and the segment currently contributes to less than 2% of the platform’s gross sales, a Nykaa spokesperson told NDTV Profit.

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Nykaa Surprises Market With Expansion Into Chia Seeds, Cooker

Lifestyle products have been listed on Nykaa since 2016 and the segment currently contributes to less than 2% of the platform’s gross sales, a Nykaa spokesperson told NDTV Profit.

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