It came as a surprise to many when Falguni Nayar quit a highly successful career in banking and a plum job at Kotak Mahindra Group in 2012 to start her own venture. A graduate from IIM Ahmedabad, she wore many hats at Kotak Mahindra; she set up its international operations in London and New York. She was the investment banking head at Kotak Mahindra Capital when she left the company.
Nayar was almost 50 when she started Nykaa, an e-commerce platform for beauty and cosmetics, using family funds. She was inspired by the entrepreneurs that she had met while she was an investment banker. “I realised that beauty consumption in India is at a very early stage and with a large geographical market like India, where you have to reach the length and breadth of the country, e-commerce may be a better way to service Indian consumers with beauty products. So, at a time when everybody didn’t believe in the beauty market in India, and many brands were leaving the country, Nykaa came in,” she said.
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Having lived in London and New York, she was aware that the Indian market lacked retail formats that could sell beauty products well. Unlike in the west where they are sold in big department stores, they were mostly sold in India by neighbourhood stores, which had limited product offerings.
Over the years, Nykaa has become one of the leading platforms for beauty and cosmetics. It has also expanded into fashion and opened physical retail stores in 45 cities. In the quarter ended December 31, 2021, it had 22 million average monthly visitors in the beauty and personal care vertical and 16.4 million in the fashion vertical.
For the astute banker in Nayar, like expansion, profitability, too, mattered. Nykaa turned profitable in less than a decade, a rarity in the startup space. In the year that ended in March 2021, the parent company, FSN E-commerce Ventures, reported a revenue of Rs2,440 crore and a profit of Rs61 crore. “Nykaa was built with a lot of financial prudence, and a lot of respect for capital in a way that we had a business model that was very frugal and focused,” said Nayar.
Nykaa went public in November 2021; the Rs5,352 crore initial public offering got subscribed almost 82 times and the stock was listed at an 80 per cent premium to its issue price on November 10. “Nykaa remains a differentiated player with its focus on three Cs—content, curation and convenience—creating a rapidly growing and loyal consumer base,” said Sachin Dixit, an analyst at JM Financial Institutional Securities.
It took a lot of courage for Nayar to leave a good job to enter the uncertain world of entrepreneurship. “Very often, women are afraid that they would upset the apple cart at home if they take on too many responsibilities,” she said. “First, it has to begin in their minds that they want it for themselves and they are ready to do what it takes to be where they want to be. Once they have the resolve to do that, I don’t think the world is holding them back.”