Beauty retailer Nykaa gets most research ideas for launching new products and categories from customers and has benefited from its early adoption of social media, Falguni Nayar, founder and chief executive, said.
“Honestly, our secret sauce comes from our customers. They write to us, and we are very open, we listen to our customers,” Nayar said at the 20th Hindustan Times Leadership Summit
The beauty, wellness and fashion startup has been active on social media, and interacts with customers online, taking note of what they expect from it. When it initially announced the launch of its Bareilly store, the company was surprised by the number of suggestions it received from customers via social media, on the opportunities across markets it could enter and, later, on the brands it ought to procure, she added. That set the tone for how it utilized consumer feedback to make decisions.
At present, about 60% of its demand is from non-metros. “They (women) feel empowered and confident with what Nykaa offers. That has been my big motivation,” Nayar said in a conversation with Mint’s editor-in-chief Sruthijith K.K.
Nayar started Nykaa in 2012. The company offers more than 5,500 brands across beauty and fashion, with about a billion site visits every month.
When the startup debuted on the stock market last year, it was valued at over $13 billion. Its current market capitalisation is a little over $6.6 billion.
Not having a background in retail helped Nayar as she did not follow the conventions of the industry, such as retailing luxury brands only in a luxury environment. “Many (people) tell me that since you were not from the beauty industry, you broke all rules, and you didn’t take constraints for granted,” she said. “We didn’t carry the baggage of how beauty had to be done.”
Nayar, who was previously managing director of Kotak Investment Banking, started Nykaa in a small office space of less than 1,000 sq ft in one of Mumbai’s industrial areas. “In spite of having a very comfortable home and previous offices, I wanted the startup office to be ‘startup-like’, because that’s when the startup culture comes in. That’s when the culture of frugality comes in.”
Initially, Nayar, the finance professional, faced a new set of challenges—from getting the technology right to the proof of concept. “I was very naive to think that I can do tech on my own. I was not even in the tech ecosystem,” she said, adding that she met people from the industry, taking lessons on beauty, retail and technology. “I have to admit that entrepreneurial journeys are not easy, especially early days are characterized by pain points.”
As an investment banker at Kotak, Nayar helped entrepreneurs such as Harsh Mariwala, co-founder of consumer goods company Marico, Adi Godrej, chairperson of Godrej Group, and UTV founder Ronnie Screwvala, for their roadshows before initial public offerings.
“I had seen these entrepreneurs, as they portrayed their visions. There were so many people who didn’t believe in (them), but they eventually created that,” said Nayar.
These experiences inspired Nayar. “I saw a lot of entrepreneurs pursue their vision and dreams, and create an enterprise that was extremely successful, creating a value proposition for customers in India. I particularly wished a similar journey,” she added.Nykaa will focus on wellness products and athleisure fashion through content-led commerce. “We retail the products on our website, but we believe in content-led commerce and we need to do more with education and consumer advice.”