**Bengaluru: Nykaa’s Continued Investment in Beauty and Personal Care Sector**
FSN E-Commerce Ltd., the parent company of Nykaa, is set to maintain its investment strategy in the beauty and personal care (BPC) sector to enhance customer acquisition in the upcoming quarters, as stated by Anchit Nayar, CEO of Nykaa’s beauty division. During a recent analyst call, Nayar highlighted that the investments made in customer acquisition over the past few quarters have significantly contributed to the revenue growth observed in the beauty segment, particularly in the third quarter. He expressed confidence in the potential for further growth, noting, “Our hypothesis appears to be correct that there is still substantial growth to be achieved.”
Nayar emphasized the company’s commitment to pursuing this growth, stating, “We will continue to invest in the beauty business, which possesses the profitability to support our customer growth initiatives.” In the December quarter, Nykaa reported a remarkable 61% year-on-year increase in profit after tax, reaching ₹26 crore, driven by a rise in gross merchandise value in its beauty segment, which totaled ₹3,389 crore. Revenue from operations also saw a 27% increase, aligning with market expectations.
The beauty division experienced a cumulative customer growth, reaching 32 million during the quarter, with order volume rising by 30% year-on-year, marking the highest growth in nine quarters. Nykaa has heavily invested in marketing within the beauty sector, recognizing the significant potential for category expansion. Nayar noted, “While the beauty business demonstrates healthy profitability, the low penetration of per-capita consumption indicates that substantial expansion work remains. Ultimately, the benefits of a larger total addressable market will accrue to us, as we are the leading player in this space. Therefore, we view this as a future investment, with customer acquisition being a major component of our marketing expenses.”
In addition, Nykaa Fashion reported a 21% year-on-year revenue growth in the third quarter, despite a challenging demand environment, with gross merchandise value growth of 8%. The company’s content platform, LBB, also experienced strong growth this quarter, bolstered by marketing campaigns and events like Nykaaland and Nykaa wali Shaadi, contributing to overall revenue growth in the fashion vertical.
Nykaa’s house of brands achieved an annualized gross merchandise value run rate of ₹2,400 crore in the December quarter, representing a threefold increase over the past three years. The company has established itself as one of India’s largest beauty houses, with an annualized GMV run rate of ₹1,900 crore.
