Quick Stats on Nykaa

Founder	Falguni Nayar
Year Founded	2012
Origin	Mumbai, India
No. of Employees	2,000+
Company Type	Public
Market Cap	Rs 1 Lakh Crore (2021)
Annual Revenue	Rs 1,860 Crore (2020)
Net Income/ Profit	Rs 278 Crore (2020)

 

(Products Sold on Nykaa, Source: Nykaa)

Products by Nykaa

Since Nykaa has come a long way, serving for 9 years, let’s have a look at its products.

• Beauty
• Fashion
• Wellness

Competitors of Nykaa

The top 5 competitors of Nykaa are as follows:

• Purplle
• Plum
• MyGlamm
• Scentials
• FabAlley

Now that we understand the company’s key business, let’s look after the SWOT Analysis of Nykaa.

SWOT Analysis of Nykaa

Talking about the Nykaa business, let’s understand how this corporation can cater to different individuals using SWOT Analysis. SWOT Analysis of Nykaa helps us to understand companies through the lens of internal and external factors. Internal factors refer to strengths and weaknesses, which can be controlled by the corporation.

To better understand the SWOT analysis of Nykaa, refer to the infographic below:

Now first let’s begin with the strengths of the company from the SWOT analysis of Nykaa.

But, first, we would like you to take a look at this video that covers the story of a $13 Billion startup built by a woman and how it took the Indian market by storm.

Strengths of Nykaa

As strength is an essential component of SWOT. Nykaa has several strengths that make them one of the largest e-commerce companies in the beauty and wellness sector in India.

• Innovation: Nykaa is constantly adding innovations to its product range and offerings to capture the attention of customers and meet the dynamic business environment by shifting from online-only to omnichannel.
• Strong Social Media Interaction: Nykaa has been able to attract many social media users as potential customers with regular online campaigns, contests such as Nykaa Beauty Femina Awards, brand endorsement, magazines, and web series etc.

(Nykaa Market Cap Crosses 1 Trillion, Source: NDTV)

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• Wide Range of Products: Nykaa has very well managed in showcasing a wide range of products in both online and offline stores to prevent customers from migrating away from the brand due to lack of stock.
• Geographical Presence: Since geographic presence in different regions is considered to be one of the company’s greatest strengths. It helps to determine the reach of the company in the target market and ensures easy accessibility.
• Affordability: As the ability to pay and willingness to buy is a factor determining demand. Nykaa also has considered this factor and has priced its product keeping in mind the needs of different classes.
• Less Charging Suppliers: Access to suppliers that offer raw materials at a lower cost can improve the overall efficiency of the business.
• Property Rights: A company may own various intellectual property rights that can make the product offering unique and exclusive, making it difficult for competitors to imitate.

Weaknesses of Nykaa

Everyone business has its positive and negative sides, so Nykaa’s. Though Nykaa is one of the current market leaders in beauty product e-commerce companies in India, many weaknesses can become a nightmare for Nykaa’s growth.

• Poor Waste Management: Nykaa has been criticized by environmentalists for its poor waste management and inability to integrate sustainability into its business operations.
• R&D: Low spending on research and development activities may weaken the company’s performance due to a lack of local/international market knowledge.
• Delivery Charges: It offers free delivery for orders above Rs. 700, which excludes some of the prospective buyers.
• Customer Care: Nykaa has not been able to resolve customer complaints so effectively.
• Decision-making Process: Decision making at Nykaa takes too much time, leading to costly delays in bringing new products to market.

Opportunities for Nykaa

The environment within which our organization operates offers opportunities. An organization can identify such opportunities and enjoy benefits arising from them by planning and executing required strategies.

• Expanding Reach to Population: The exponential growth of the population and especially the existing or potential customer segments is a great growth opportunity for the company.
• E-commerce & Networking: The emergence of e-commerce and social media networking as a trend can be a great opportunity for Nykaa. It can ensure a strong online presence on various social networks.
• Government Subsidies: Government provided subsidies and other measures that make the business environment friendlier are a positive external environmental factor for Nykaa.
• Matching Lifestyle of Customers: Improving customers’ lifestyles and standards means more consumption of consumer goods and services and more opportunities to encourage purchases.
• Business Model: Nykaa’s business model is climbing a new ladder to increase its international reach and boost profits.
• New Technologies: The development of new technologies to support the production and delivery process of products can be used to integrate innovation into business operations. Advanced Technology integration can reduce costs, improve efficiency, and lead to the rapid adoption of innovative products.
• Following Trends: The changing needs, tastes, and preferences of customers can be an opportunity if the company has good market knowledge.

Threats to Nykaa

Every coin has two sides, so does Nykaa have.

• E-commerce Regulations: The altering legal framework and the introduction of new, stricter regulations pose a major threat to Nykaa. Inability to comply with the changing regulations increases the risk of costly litigation.
• The Rise in Competitors: The increasing number of direct competitors such as purplle, indirect competitors such as small businesses selling organic and cruelty-free products affects the company’s ability to maintain and expand its customer base.
• Health Concern: The growing trends of organic and cruelty-free products poses a great danger if the products offered are not environmentally friendly. Nykaa should now focus more on expanding its reach to natural and organic products.
• Economic Conditions: During the pandemic, the purchasing power declined to an extent and the business got affected in the first phase of lockdown as the economic conditions of people deteriorated.

This ends our elaborative SWOT analysis of Nykaa. Let us conclude our learning below.