Indian beauty and personal care (BPC), a $20 billion market, is expected to touch $35 billion by 2028. With a growth rate of 11-12%, India may be the fastest growing beauty market in the world, but the reality is that the per capita consumption of beauty is just $15, lower than other emerging countries such as the Philippines or Indonesia which are already at $40-$50. In contrast, the per capita beauty of a country like Korea is in the region of $400-500. Beauty and personal care retailer and marketer, Nykaa, considers the country’s upward beauty trajectory to be a great opportunity to scale up its EB2B distribution business, Nykaa Superstore.

“In India it is not an affordability issue, it's more to do with lack of awareness. We are the largest online retailer as well as largest offline specialty retailer. We have 25 million online customers and 200 stores across 70 cities. Therefore, the responsibility lies on us to grow and invest in growing the market,” says Anchit Nayar, executive director and CEO, Nykaa Beauty, the distribution arm of the Rs 6,386 crore beauty company, has been distributing 170 brands across one lakh general trade doors. It also has the license to exclusively import, retail and distribute 44 premium international brands (like Charlotte Tilbury, Murad, Dior, Bath&BodyWorks and Pixi).

“Since we are both retailer and distributor, brands find a lot of value in partnering with us directly. We also serve as a marketer for them, help them localise their go-to market strategies, work with them on their content, advise them on how they should position their brand to maintain their global equity as well as become more locally relevant,” explains Nayar. He claims that even legacy FMCG companies are using Nykaa’s distribution network to enable a wider presence for their new-age direct-to-consumer (DTC) brands. “The legacy companies have their own distribution, but the value they see in our distribution is our expertise in selling premium products. Their traditional distributors are used to selling soaps, hair oil and shampoo brands meant for the masses. Selling premium assortments needs a different kind of expertise.” Nykaa’s advantage according to Nayar is its data driven analysis which predicts which premium brand would do well in which store.

In fact, physical distribution is a stumbling block for most DTC beauty brands wanting to scale up. Building a physical distribution network is expensive and they can’t afford it. Bulk of the 170 brands which Nykaa distributes are DTC. “We have technology, so we can be efficient and on top of that we are not distributing just one-two brands, we have 170 brands. The fixed costs are spread across a larger revenue play, which has allowed us to build a business where we see a path to profitability,” says Nayar.

Nykaa’s distribution business currently contributes less than 10% to its overall revenue, but Nayar expects it to grow to a sizable amount in the next few years. “We have the largest ecommerce play, largest specialty retail play and now we have become formidable distributors and we have our own consumer brands as well. We are doing retail, distribution, imports and consumer brands. We have created a full stack model to address the entire beauty ecosystem. The vision is to be the category creator for beauty consumption.”

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