The E-Commerce sector in India is booming and Nykaa has become the most demanded brand in the world of beauty and e-commerce products etc. It has become one of the biggest e-commerce platforms for all beauty requirements. This made us realize how Nykaa has gained huge success in this industry. So let us drive into the SWOT analysis of Nykaa and understand its products, strategies, financials, and much more in detail.
About Nykaa
Nykaa is the leading e-commerce organization that offers fashion, beauty, and wellness products through its websites, mobile applications, and offline stores. It is a unicorn startup that was incepted in 2012. Falguni Nayar established this brand who was the former MD at Kotak Mahindra company.
After 3 years, Nykaa expanded its presence from online platforms to omnichannel models and started selling products besides the beauty section.
Then in 2020, Nykaa launched its another product Nykaa Fashion and Nykaa Pro in Delhi. The company then started retailing more than 3000 brands and 3 lakh products throughout its different platforms. Nykaa is definitely an inspiration for a number of women wishing to start their eCommerce businesses.
Nykaa at a Glance
| Key Persons | Falguni Nayar (CEO)
Anchit Nayar (CEO – E-commerce & Beauty) Adwaita Nayar (CEO – Fashion) |
| Year of Establishment | April 2012 |
| Annual Revenue (as of FY24) | US$770 million |
| Net Profit (as of FY24) | US$4.8 million |
| Origin | Mumbai, Maharashtra, India |
| Type of Company | Public |
| Total no. of employees | 2,000+ |
SWOT Analysis of Nykaa
Now see how the company serves various individuals with its outstanding products and services.
Strengths of Nykaa
Strength is one of the most essential elements of SWOT analysis. These strengths have made the company one of the biggest e-commerce companies in the wellness and beauty sectors in the country.
Constant innovation
Nyka has been adding different innovations to its product range. It attracts a number of customers and is specifically crafted to meet the constantly changing customer needs as well as the business environment by transferring to an omnichannel platform.
Strong social media presence
Nayika has attracted a number of social media users with its regular online campaigns. The company also conducts different contests like brand endorsement, web series, Nykaa Beauty Femina Awards, etc. to retain its customers and engage them to a greater extent.
Different product ranges
The company has very well managed to display a number of products in offline and online stores. It is specifically made to prevent customers from getting diverted from the brand due to stock shortages.
Geographical presence
Nykaa is present in various regions in the country which assists in determining the company’s reach in market share and also shows us easy accessibility at a stop.
Cost-effectiveness
Nykaa is also known for factors determining demand and has always kept prices reasonable keeping in mind the different requirements of the customers.
Weaknesses of Nykaa
Like other companies, Nykaa also has some good and bad sides. Below-mentioned are the weaknesses of Nykaa.
Low waste management
The company has been criticized by environmental experts for its very poor waste management and its inability to bring sustainability to its business functions.
Poor customer care
Nyka has been incapable of resolving customer complaints on time and effectively which leads to a reduced customer base.
Low research and development
The company spends very little on research and development activities which may result in the weak performance of the company.
High delivery charges
The company offers free delivery on and above shopping of Rs.700. This category excludes most of the potential buyers.
Transferable business model
The business model of Nykaa can be easily copied by its rivals irrespective of the copyrights as well as patents the company holds.
Opportunities for Nykaa
Opportunities are that sector that needs to be focused on for further company expansion and growth.
Below are the opportunities for makeup for company enhancement.
E-Commerce and networking
The huge spike in social media networking and e-commerce can be witnessed today which can be the best trend for Nykaa. This ensures that the brand is socially present on different networks.
Latest technologies
New technology developments support the delivery and production process of products. It can be easily integrated into the core business operations of the company. It reduces cost and improves efficiency leading to the quick adoption of unique products.
Customer lifestyle
Enhanced customer lifestyles and standards mean greater consumption of consumer services and goods. This brings a whole lot of opportunities for the company to encourage product purchases.
Government subsidies
Subsidies as well as other measures provided by the government make the business environment of the company more accessible and affordable.
Expanded customer reach
The unprecedented population growth as well as huge customer segments are a great opportunity for Nykaa. Also, the changing preferences and needs of customers can also prove a boon to the company with great market knowledge.
Threats to Nykaa
Below are the threats to Nykaa –
Intense competition
The number of direct competitors to Nykaa has been increased. Also, a number of indirect competitors can also be seen that are selling organic products. This may hit the company’s ability to expand and maintain its customer base.
Changing economic condition
During the pandemic situation, the buying power of customers had a sure fall and the business was badly impacted in the lockdown period. Such economic conditions can hamper the growth of the company.
Organic products
The increasing trend of organic products poses a great danger to the products. Today people are increasingly in client towards eco-friendly products. Hence, Nykaa should be more focused on expanding its product base to natural as well as organic products.
E-Commerce rules and regulations
The constantly changing legal scenario as well as the introduction of stringent regulations poses a major threat to Nykaa. If the company fails to comply with the regulations of the industry then it may result in cost litigation and fines.
Top Competitors of Nykaa
Below are the top 5 competitors of Nykaa:-
- Plum: This is a beauty and grooming company driven by science and offers vegan products. It competes directly with Nykaa in the beauty and fashion segment.
- Amazon India: It is also one of the biggest E-Commerce platforms offering different beauty and personal care products. Amazon India also has a huge product offering which is a competition Nykaa.
- Purplle: It is also a renowned beauty and cosmetics brand in India competing directly with Nykaa and having a sharp focus on offering various beauty products as well as services.
- MyGlamm: It is a makeup brand in Mumbai. This company is a part of the Good Glam Group.
- Sephora India: This is another cosmetics and beauty retailer in India that has a global presence. The company competes directly with Nykaa in the skincare and beauty sector.
Conclusion
Nykaa is one of the largest platforms that brings beauty, wellness, and fashion products All under one roof for its customers and has been leading the industry. The company has positioned itself strongly in offering affordable products and has also been offering services in omnichannel mode.
However, the company also lacks in research and development section which may hamper the growth of the company in the coming time. Nykaa also has a number of opportunities in the future and the present as well.
However, the company has to work on its cost reduction strategy by minimizing internal operational costs so that a majority of people can afford its products.