Nykaa, the leading beauty and fashion e-commerce platform in India, has recently released its performance update for the third quarter of FY24. The company has witnessed consistent growth across its three business verticals, with a particular surge in the fashion segment.
Despite the overall growth, Nykaa acknowledged that discretionary consumption was impacted by short-term pressures during the quarter. However, the company remains optimistic about the long-term macro indicators and expects a rebound in the near future. Nykaa expects its BPC vertical to report a GMV growth in the mid-20s for the October-December quarter. The Net Sales Value (NSV) growth is projected to be around 20% on a year-on-year basis. The company attributes the difference between GMV and NSV growth to brand-led pricing and discounting, primarily in mass and masstige categories.
Nykaa anticipates a GMV growth of approximately 40% in the fashion vertical for the same quarter. The NSV growth is expected to be in the low thirties. Despite subdued industry-level consumption and weaker demand during the festive season, Nykaa Fashion observed a modest 28% increase in revenue from operations in the second quarter.
Nykaa’s impressive growth in the beauty and personal care segment has surpassed industry expectations. The company’s commitment to expanding the BPC category, along with its focus on high-quality products and attainable pricing, has contributed to its success.
RTM Watch’s Take
Nykaa’s Q3 FY24 performance update reflects the company’s ability to navigate through short-term pressures and maintain growth across its business verticals. The strong growth in the fashion vertical is a positive sign, indicating the success of Nykaa’s expansion into the fashion segment. However, the BPC segment’s performance highlights the challenges faced by the industry as a whole. Despite this, Nykaa’s BPC growth outpacing the industry growth suggests the company’s strong position in the market. Going forward, Nykaa’s focus on innovation, customer demand, and the festive season boost is expected to drive further growth in the coming quarters.
