Nykaa to add more muscle to its house of brands business

Online beauty, personal care and fashion retailer, Nykaa, is all set to scale its ‘House of Brands’ business. The retailer, which owns brands such as Kay Beauty, Dot & Key, Nykaa Cosmetics & Naturals, Nykd By Nykaa (an intimate and activewear label) and KICA (fitness apparel brand) has clocked an annualised GMV (gross merchandise value) of Rs 3,500 crore. The plan is to hit the Rs 7,000 crore mark in the next four years.      

“There's a need for new brands in India. There are a lot of Indian specific concerns that global brands don't necessarily address. Therefore, homegrown brands can actually emerge and establish themselves as enduring long-term brands,” says Adwaita Nayar, co-founder, Nykaa and CEO, Nykaa Fashion.

“My vision is to be a strong, formidable house of brands company in India. Our house of brands strategy is distinct from our retail business. We totally recognise that this is a fully different business that we are trying to create,” she adds. Being an ecommerce beauty retailer for over a decade has enabled Nykaa to understand needs of the Indian consumers better. For instance, pigmentation is a big concern of Indians. Even the sunscreen formulation that suits an average Indian skin is quite different. “There are a lot of India specific concerns that I think our brands can handle,” Nayar explains.

Nayar is building an entirely new team for House of Nykaa. “It's a totally different DNA. I am trying to attract a lot of talent from the best brand building companies so that we can bring that DNA into this company. I am also trying to keep this company very distinct from the rest of our businesses. Therefore, the teams that work on this are obviously fully distinct. I think we have an opportunity to build a big business here,” she explains. The strategy for building Nykaa’s House of Brands would be a combination of acquisitions and creating from scratch.

Nayar is clear that her brands would play wherever there is a gap in the market. She claims that their brand, Dot & Key pre-empted the demand for sunscreen and has emerged as a leading brand in that category. “There was a wide space, no one was doing sunscreens for the Indian skin. Similarly, if you look at Kay Beauty, there was a place for a slightly more premium makeup brand in the market, one that addressed all kinds of Indian skin tones and concerns. In cosmetics, we felt that there were a lot of international brands with great products, but no one was bringing them at the right price to the Indian market. So, we felt there was an opportunity there,” she explains.