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Decoding Nykaa’s IPO: Growth Potential, Risks & More, Report 2021

Datalabs by Inc42 Plus

Decoding Nykaa’s IPO: Growth Potential, Risks & More, Report 2021

Nykaa, a digital native marketplace and D2C brand catering primarily to the beauty and personal care consumers in India, is the market leader of this segment among other new-age digital native brands/marketplaces such as Purplle, Sugar Cosmetics, Pureplay, Mamaearth and MyGlamm. This can be ascertained from the fact that Nykaa has the highest revenue share (18.5%) in the total addressable market of online beauty and personal care in FY2020. Whereas all the mentioned peers are below 2%.

The fact that Nykaa is the market leader in the new-age online beauty and personal care market of India. It is important to understand its long term competitive position. For the same, Inc42 Plus has released— Decoding Nykaa’s IPO: Growth Potential, Risks & More, Report 2021

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Key Highlights

$551 Mn

Total GMV of Nykaa In FY21

38%

YoY Increase In Operating Revenue (FY20 to FY21)

12%

Return On Capital Employed (ROCE) In FY21

$14.6 Mn

Free Cash Flow (FCF) In FY21


Table Of Contents

  • Executive Summary
  • NYKAA’s Business Ecosystem & Value Proposition
  • NYKAA’s Product Ecosystem Value Proposition
  • Key Financial And Operational Metrics
  • Gross Merchandise Value (GMV): YoY
  • Operating Revenue & Profit: YoY
  • Free Cash Flow: YoY
  • Return On Capital Employed: YoY
  • Monthly Transacting Users: YoY
  • Competitive Landscape: NYKAA Vs Other Online Beauty & Personal Care Brands
  • Overall Competitive Scenario
  • Operating Profit Margin Comparison
  • Advertising Expenditure Comparison
  • Employee Benefit Expense Comparison
  • NYKAA IPO: Pros & Cons
  • Global Comparison: Beauty & Personal Care Market
  • Market Size Of India Vs Top 5 Biggest Markets
  • Gross Revenue To CAGR Growth
  • Fastest Growing BPC Market In Top 10 Global Economies
  • Key Insights: Global Comparison: Beauty & Personal Care Market

Summary

Nykaa’s market share in the online beauty and personal care space is estimated to be more than 18.5% (calculated as revenue of FY20/TAM). It is the single largest share by a new-age startup, while other competitors, including Purplle, Pureplay, MyGlamm, Mamaearth and SUGAR, hold less than 2% of the addressable market. With the growing adoption of consumer internet businesses in India the market is pushing its traditional peers in terms of growth and return on investment. This phenomenon in the market has attracted the attention of both the regulators and the large cap. Conglomerates (via super-apps) such as Reliance Industries Limited (RIL) and Tata Group. Both combined pose a significant threat to long term profit margins for consumer internet businesses in India.

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