Nykaa IPO Webinar
• Fashion business contributes to 25% of GMV of Nykaa as in FY21
• 90% GMV from beauty business comes from online platform and 90% of online comes from the app
• Tier 1 accounts for 45%/40% topline and remaining topline is from tier 2 and 3 towns
• Orders grew 10% QoQ and 200% YoY to 5.9mn units in the quarter
• Average order value stands at 1800/per order under beauty business
• Nykaa fashions has an order value of 3190/per order
• The company runs on a market-based model vs inventory-based model under beauty business
• Beauty is an inventory-based (buy on spot and hold stock) vs fashion is market-based business model (only run stock when demand arises)
• Nykaa has had certain exclusive tie-ups with beauty brands i.e. Huda Beauty for a year or so
• The company has 3000+ influencers in order to create content in line with demand strategy
• The company has gross margins as combo on own and other brand margins and certain input of the advertisement component
• The company has 80 physical stores across 40 cities and under online company has over 25,000 brands
• Company believes in delisting brands/pieces under fashion business on a monthly basis while beauty business sees a very low churn rate
• On the beauty business side most of the revenues (80%) come in from the mass market products
• The company has increased the offer by 20% to 630 crores in order to repay high cost debt and to fund expansion of warehouses and physical stores and also spend more on A&P
• The stores are company owned and have 2 formats which is ‘On Trend’ 800 square feet and ‘Lux’ is around 1150 square feet
• The life of assets is around 3 to 5 years and capex spend is roughly 4000/square feet to 5000/square feet
• The company has own brands making up 7.5% YTD of total revenues on a blended average basis
• Old inventory does not remain a major issue as Nykaa has a brand agreement with suppliers