Enough Room For Everyone, Shein’s Return Will Have No Impact: Nykaa CEO

Amid the re-entry of fashion brand Shein in India and debate about its impact on the competition, beauty ecommerce major Nykaa has said that it expects no impact on its business.

In a post-earnings call, Nykaa founder and CEO Falguni Nayar highlighted that Shein is present in only one category in an expansive fashion landscape.

“The market is very wide, and no one brand can dominate it. We believe that Shein’s return should not have much of an impact,” Nayar said.

She also pointed out that women’s western wear, the segment in which Shein operates, is highly dynamic and driven by trends, unlike categories such as sportswear, where a few brands have long held dominance. 

This constant evolution, she explained, has led to a surge in homegrown D2C brands, making the space even more fragmented.

With over 4,000 brands already on its platform and more global players entering India, Nayar believes that competition will remain broad-based, preventing any single brand from monopolising the market.

Notably, Shein, which was banned in India in 2020 due to geopolitical tensions, re-entered the country nearly five years later via a strategic partnership with Reliance Retail. The Reliance group company relaunched the Shein app, which is now available on Google Play Store and Apple’s App Store, on February 1. 

Nykaa’s Marketing Spending Rises 

Nykaa reported a 51.34% increase in its consolidated net profit in Q3 FY25 to INR 26.41 Cr from INR 17.45 Cr in the year-ago period. Operating revenue surged 26.74% to INR 2,267.21 Cr during the quarter under review from INR 1,788.80 Cr in Q3 FY24.

However, Nykaa saw an uptick in its marketing expenses during the quarter under review as it ramped up customer acquisition for its fashion as well as beauty verticals.

Nykaa Fashion, a competitor of Shein, saw its marketing expenses increase 5.9 percentage points to 30.5% of its revenue in Q3 FY25 from 24.6% in Q3 FY24. 

However, the company said that these expenses remain variable and controllable, aligning with its long-term growth strategy.

Notably, Nykaa Fashion’s revenue for the quarter under review stood at INR 199 Cr, up 21% from INR 164 Cr in the year-ago quarter. However, the company incurred a loss of INR 25.41 Cr from this segment during the quarter.

Nykaa reaffirmed its commitment to assortment expansion and onboarding emerging D2C brands. As part of this, it onboarded brands like FableStreet, Snitch, and The Souled Store on its platform in Q3 FY25. 

Meanwhile, Nayar said that marketing and analytics spending for the beauty segment stood at 10.1% of the revenue in the December quarter as against 9.5% a year ago. The increase was attributed to aggressive new customer acquisition and brand-building initiatives like ‘Nykaaland’ and ‘Nykaa Wali Shaadi’. 

Nayar said the company is confident about its long-term strategy, with breakeven in the fashion business on track as the ratio of new to repeat customers improves.

Meanwhile, its B2B beauty arm Superstore also continues to see investment. The company expects its losses to decline over time.

Notably, Nykaa Superstores’ total gross merchandise value (GMV) stood at INR 259 Cr in Q3 FY25, up 53% from INR 170 Cr in Q3 FY24. 

Shares of Nykaa ended Monday’s (February 10) trading session 2.25% lower at INR 169.6 on the BSE.