Whereas Nykaa began as an e-commerce platform, founder and CEO Falguni Nayar is a “huge believer” in bodily retail and stated there’s demand from customers.
“The final two years have been very a lot impacted by Covid-19 and what it does to bodily retail. Nonetheless, we do consider that in the event you take a look at the maths and statistics, e-commerce penetration is simply 8%,” Nayar stated on CNBC’s “Avenue Indicators Asia” on Thursday.
“Plenty of magnificence is bought offline and Nykaa has change into such an enormous model that we can’t ignore our offline channel in addition to offline customers. There might be higher emphasis on shops, however I feel we’ll proceed to be a dominant e-commerce participant.”
Nykaa, which sells cosmetics, grooming and trend merchandise, at the moment has 100 retail shops in India, with its newest opening simply final week. The corporate had a blockbuster debut in November hitting a valuation of virtually $14 billion – making it India’s first woman-led unicorn itemizing.
In its most up-to-date quarterly report, nevertheless, the corporate reported a 58% plunge in net profits.
Different newly public Indian corporations have come underneath stress because the halo of their high-profile IPOs fades and valuations come underneath scrutiny. Earlier this week, Reuters reported that India will probe corporations hoping to IPO about valuation metrics.
Whereas these corporations largely had stellar debuts, many are actually buying and selling effectively beneath their IPO value –together with Nykaa, Paytm, Zomato and CarTrade.
Nayar stated tech valuations would see “some adjustment” because of high inflation globally and rising interest rates. For Nykaa, she stated the most recent spherical of coronavirus restrictions in main Chinese language cities will probably current supply chain challenges.
“I feel that’s holding us again and typically we have now to take further inventory, assuming that disruptions might be there,” stated Nayar, who based the corporate in 2012.
Whereas Nayar stated the affect of surging commodity costs and inflation stays a key watcher, she is assured in “the lipstick impact.”
“Cosmetics and wonder are these small luxuries that customers do not reduce down on so drastically as a result of on the finish of the day, the share spent on magnificence within the nation is as little as $12 to $14 per capita,” she defined.
“We do consider that the wonder trade is in an inherent structural change the place Indian customers need extra magnificence consumption,” she added.
Correction: This story has been up to date to right the spelling of Nykaa.