Nykaa’s quick commerce play, Nykaa Now, sees value in 30-60 minutes deliveries

Beauty and personal care company Nykaa’s quick commerce platform, Nykaa Now, is operational in 13 cities. The service over the next several quarters would be available in 25-30 cities. But Nykaa Now is not promising 10-minute deliveries. Its promise to consumers is to get their orders delivered within 30-60 minutes.

“We are lucky to be in a category where 10 minutes is not required, 30 minutes is good enough. This allows us to have fewer rapid (dark) stores, which means we can stock those stores better, have more SKUs (stock-keeping units) and more depth too,” says Anchit Nayar, CEO, beauty e-commerce, Nykaa.

The beauty company has 100 rapid (dark) stores across 13 cities and is also using its brick-and-mortar stores for hyperlocal deliveries. Nayar says the company is going to be cautious with its rapid store expansion. In fact, the decision to deliver in 30-60 minutes is also linked to its rapid store strategy. “The minute you try to go from 30 minutes to 10 minutes delivery, you will have to triple or quadruple your dark store network. And, that is a big risk. Since there are so many dark stores, inventory gets replicated across many more points. And if an inventory doesn't sell, it starts to age. Ultimately, either you have to take the hit or you have to return it to your brand partners and nobody is happy,” explains Nayar.

He claims that the average order value of Nykaa Now is similar to its ecommerce platform, but once the platform is marketed aggressively, incremental orders could go up. With upwards of 10,000 SKUs, Nayar claims that Nykaa Now offers the largest assortment of beauty and personal care products. “Most Q-comm platforms are selling everything from eggs to make-up brushes and mobile phones. Hence, their depth of beauty and personal care products is low. If somebody is looking to buy shampoo, make-up brush or a lipstick we give them as much choice as possible. The consumers don’t have to choose between three moisturiser or two sunscreen brands. Since we are vertically specialised with e-commerce player, our rapid stores are also keeping over 10,000 SKUs in beauty and personal care alone.”

But quick commerce purchases are largely impulse-driven. One would order a soap, shampoo or a shaving cream when he/she suddenly realises it is over and would hurriedly order. Would a consumer be willing to wait for 30 minutes? Nayar goes to back to the depth of the SKUs that Nykaa Now offers. He says while the rapid stores would offer 10,000-odd SKUs, Nykaa’s physical stores (which would do hyperlocal deliveries) would give consumers access to its entire 1.5 lakh inventory. “Those consumers looking at replenishing their eye-shadow or foundation may continue to shop on our e-commerce platform, but we also think that our 30-minute delivery platform, which has the widest choice of shampoos, shower gels etc would buy these along with the stuff they are already shopping on Nykaa.com. Yes, the average order values might be lower on Nykaa Now, but it will be offset by the fact that a customer who earlier used to transact say four times a year with us earlier will now transact eight times in a year.”

Nykaa Now currently delivers only beauty and personal care products. Nayar says he is not closed to the idea of selling fashion, but there aren't immediate plans.