Nykaa targets 10% annual growth in GCC with the Nysaa platform and strategic alliances. Discover their market potential and financial performance.
Table of Contents
Introduction
A few months after launching its omnichannel beauty platform, Nysaa, in the Gulf Cooperation Council (GCC) region, beauty e-commerce unicorn Nykaa has set an ambitious target of 10% year-on-year growth in the area.
This projection follows significant business opportunities and a strong market presence in the Middle East.
Market Potential in the GCC
During the fourth quarter analyst call of FY24, Nykaa highlighted the substantial potential within the Middle East region.
The GCC’s beauty and personal care market is estimated to be worth $30 billion.
Furthermore, the GCC boasts one of the highest per capita spending rates on beauty and personal care products globally, averaging $500 per person.
| Region | Market Size (Bn USD) | Per Capita Spend (USD) |
|---|---|---|
| GCC | 30 | 500 |
Strategic Alliance
In FY24, Nykaa formed a strategic alliance with UAE-based Apparel Group to strengthen its omnichannel approach in the Middle East.Â
The Apparel Group, which operates over 2,200 retail stores across the UAE, Saudi Arabia, Qatar, and Kuwait, provides a robust retail network for Nykaa’s expansion.
| Company | Stake |
|---|---|
| Nykaa | 55% |
| Apparel Group | 45% |
Nykaa launched its e-commerce platform, Nysaa, in association with Apparel Group in January of this year.
Following this, Nykaa invested $1.9 million in Nysaa in February through its subsidiary FSN International.
March saw the launch of the first Nysaa-branded store in Dubai, featuring international brands such as Kylie Cosmetics, Kay Beauty, Rituals, and Stila.
Financial Performance
Despite facing a 48% dip in consolidated net profit on a QoQ basis to INR 9.07 Cr from INR 17.45 Cr in Q3 of FY24, Nykaa’s performance showed significant improvement on a YoY basis.
The net profit doubled from INR 4.27 Cr reported in Q4 FY23.
| Quarter | Net Profit (INR Cr) |
|---|---|
| Q3 FY24 | 17.45 |
| Q4 FY24 | 9.07 |
| Q4 FY23 | 4.27 |
For the full fiscal year FY24, Nykaa’s net profits grew by 80% to INR 69 Cr from FY23’s 38.39 Cr.
In tandem with this profit spike, operating revenue for the full year also grew by 24% to INR 6,385.6 Cr from INR 5,143.8 Cr in the previous fiscal.
| Fiscal Year | Net Profit (INR Cr) | Operating Revenue (INR Cr) |
|---|---|---|
| FY23 | 38.39 | 5,143.8 |
| FY24 | 69 | 6,385.6 |
Conclusion
Nykaa’s strategic expansions and robust financial performance underscore its commitment to growing its presence in the GCC region.
With the high potential in the Middle Eastern beauty and personal care market, Nykaa aims to continue its upward trajectory, targeting a 10% annual growth rate and solidifying its status as a leading beauty e-commerce platform.
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