Nykaa Focusing On Faster But Not Ultrafast 10-Minute Deliveries

Despite the ongoing quick-commerce frenzy in the country, beauty and fashion ecommerce major Nykaa is not focusing on 10-minute deliveries. Instead, the company is targeting a delivery window of 30 minutes to 2 hours for select, high-demand beauty products.

“Nykaa’s beauty customers often need time to choose the right products, like the correct foundation shade, so ultrafast delivery doesn’t always align with our service,” Anchit Nayar, CEO of beauty ecommerce business of Nykaa, said in the company’s post-earnings conference call.

Nayar emphasised that while Nykaa will offer faster delivery options, it won’t compromise the customer experience in categories that require more consideration.

Despite this, Nykaa is keen to capitalise on fast-moving, everyday essential SKUs, which are more suited to quick delivery. These products, such as commonly used beauty essentials, are in high demand and represent a crucial portion of the company’s business. 

In these categories, Nykaa is rolling out rapid delivery services in select metro cities, where it can ensure competitive delivery speeds without significantly diluting its margins.

It is pertinent to note that it was reported last month that the company was piloting a 10-minute delivery service in select parts of Mumbai, covering 10% of its SKUs.  

Falguni Nayar, CEO of Nykaa, said during the call that the company’s investment in infrastructure, specifically its network of warehouses located in state capitals across India, has already improved delivery timelines. 

With the expanded network, Nykaa claims to deliver 70% of its orders the next day, 45% improvement over past performance.

In an investor presentation, Nykaa said that its same day delivery and next-day delivery logistics cover 80% of deliveries in top 12 cities and 70% in top 110 cities of the country.  

Falguni Nayar also said that no additional capital was incurred in expanding its warehouse network in the first half of FY25. According to her, the company’s investment in infrastructure does not pose a heavy capex burden and is expected to boost margins, supported by Nykaa’s high average order value.

The company believes this expansion will be accretive to its margins rather than dilutive.

Nykaa’s consolidated net profit surged 66.3% to INR 12.97 Cr in Q2 FY25 from INR 7.8 Cr in the year-ago period, as the beauty and personal care (BPC) vertical delivered strong growth. 

Shares of Nykaa ended today’s trading session 2.66% lower at INR 177.65 on the BSE. The company released its Q2 financials after market hours.