Nykaa Q2 Results: BPC Vertical’s GMV Grows 39% YoY, Fashion Sees 43% Rise

Despite the inflationary pressure keeping a check on consumer spending, beauty ecommerce platform Nykaa’s beauty and personal care (BPC) and fashion verticals registered impressive growth in the July-September quarter of 2022.

The startup on Tuesday reported an overall upbeat performance during the quarter. Here are the key highlights from its Q2 results:

Headline Numbers: The beauty ecommerce giant reported a net profit of INR 5.2 Cr in Q2 FY23. Though this was over a 300% jump when compared to its Q2 FY22 profit of INR 1.2 Cr, profit remained almost flat sequentially. Nykaa had reported a profit of INR 5 Cr in Q1 FY23.

Helped by a strong demand for its beauty, personal care, and fashion products, Nykaa also saw a 39% YoY growth in its operating revenue to INR 1,230.8 Cr in Q2 FY23 from INR 885.3 Cr in Q2 FY22. The startup had reported operating revenue of INR 1,148.4 Cr in Q1 FY23.

Meanwhile, its total GMV grew 45% YoY to INR 2,345.7 Cr in the reported quarter, with BPC contributing the highest to this growth.

EBITDA margin expanded 171 basis points (bps) on an annual basis to 5%, while it expanded 96 bps on a quarterly basis.

Nykaa attributed the improvement in margin to owned brands mix, higher ad income and favourable mix, and marketing efficiency. It said that fulfilment cost also improved driven by regionalization strategy, but was partly offset by inflation.

BPC Segment: Continuing the trend, Nykaa’s BPC vertical registered the highest growth. Its GMV grew 39% YoY to INR 1,630.1 Cr in Q2 FY23. The segment’s contribution margin also expanded 630 bps YoY.

The BPC segment’s total orders in the September quarter, which also includes a large part of the festive sales in India, stood at 8.4 Mn, a 39% growth YoY. In the preceding quarter, the total orders in the segment stood at 8.1 Mn.

Nykaa’s festival sale, Hot Pink Sale, delivered a strong omnichannel performance with 47% YoY GMV growth, with the highest ever monthly unique visitor count of 25 Mn on the platform, the startup said.

Meanwhile, total annual unique transacting customers in the BPC segment grew 31% YoY to 9.1 Mn by the end of September 30 this year.

Fashion Segment: Fashion segment continued to be the second-largest contributor (26%) to Nykaa’s GMV. In Q2, its GMV saw a 43% YoY growth to INR 599.1 Cr.

As per the company’s statement, new season merchandise accounted for 24% of the vertical’s GMV, while international brands contributed 13% of western wear category GMV in the quarter.

The vertical saw its annual unique transacting customers grow 66% YoY to 2.1 Mn during the quarter. 

Other Growth Verticals: Nykaa’s B2B platform SuperStore, launched in April this year, continued its growth trajectory. By September end, the vertical scaled to more than 73,000 transacting retailers across over 650 cities with 182 brands listed on the platform. The number of transacting retailers stood at 45,000 at the end of June across over 500 cities with 165 brands listed on SuperStore.

Overall, its other new businesses such as NykaaMan, SuperStore, International, LBB, and Nudge saw a total GMV growth of 240% YoY to INR 116.5 Cr, contributing 5% to the consolidated GMV.

Physical Stores: With a growing competition in the overall beauty and fashion ecommerce market, Nykaa has been trying to aggressively grow its physical presence, particularly post the pandemic period.

As of September 30, its own physical store count grew to 124, including two new Fashion stores, with a presence across 53 cities. Its total retail store count stood at 113 across 52 cities at June end. 

New Partnerships: Nykaa Fashion recently partnered with fashion e-tailer Revolve to provide its customers access to over 400 international brands.

It also partnered with actor Priyanka Chopra Jonas to bring her hair care brand Anomaly to India across Nykaa.com and Nykaa stores.

In October, Nykaa partnered with Apparel Group to undertake an omnichannel, multi-branded retail operation business in the Gulf Cooperation Council (GCC) region.