Management expressed optimism regarding the industry outlook and highlighted Nykaa’s strong competitive advantage across its various business verticals. The growing trend of premiumisation works in Nykaa’s favour due to its strategic positioning as a platform. It also expects positive profitability, driven by factors such as improved customer retention and the success of its own labels. Unlike its competitors, Nykaa aims to make a significant positive contribution in the fashion segment as well. The company’s success is underpinned by a robust technological infrastructure, and investments are being made to further enhance its tech capabilities.
Currently, the per-capita consumption of beauty, personal care products in India stands at a level of $15, in contrast to China and the US. However, it is anticipated to rise to $50 by 2030, representing a CAGR of 16%, as the GDP per capita doubles. Similarly, fashion consumption in India is relatively lower at US$54 per capita compared to China and the US. By 2030, it is projected to reach US$160, with a CAGR of 15%.
Rising e-commerce penetration, higher income levels and demographic shifts should drive a strong growth in online BPC & Fashion. E-comm penetration (ex-grocery) for low-income customer groups is low at <2% cf. 37% for high-income groups, which highlights scope for increasing e-comm share as income grows. Among categories, BPC & Fashion are relatively lower on e-comm penetration at 10% and 14% respectively, as compared to mature categories like electronics (27%), and hence have significant growth headroom.