Falguni Nayar: From a bank employee selling cosmetics to the second richest female billionaire in India

Entrepreneur Nayar always believes that business is associated with important missions. For her, Nykaa is a place to help Indian women take care of themselves and break free from outdated notions.

Years ago, Falguni Nayar, founder and CEO of cosmetics retailer Nykaa, guided Indian company founders to IPOs in Europe and the US. Now, the former investment banker is taking her own start-up to the public market in a historic IPO in India.

Nykaa (full name: FSN E-Commerce Ventures), her brainchild has now grown into India's leading e-commerce site for beauty products. Nykaa is supported by many Bollywood stars and has a large number of enthusiastic young customers.

At the beginning of this August, Nykaa officially filed a prospectus for its initial public offering. The IPO is expected to bring the company a valuation of more than $4 billion.

Entrepreneur Nayar always believes that business is associated with important missions. For her, Nykaa is a place to help Indian women take care of themselves and break free from outdated notions.

It was this message that helped Nykaa create a big buzz. Founded in 2012, this start-up now offers beauty products from more than 2,500 brands.

Through its websites, apps and more than 70 brick-and-mortar stores, the company posted sales of 24.5 billion rupees ($330 million) in fiscal year 2020. This is up 35% year-on-year in 2019. despite the Covid-19 pandemic that closed many brick-and-mortar stores and challenged deliveries.

If the IPO goes as planned, Nykaa will be India's first female-led unicorn to go public. Nayar, her husband and two children own about half of the company, equivalent to a fortune of more than $2 billion.

Founding Ideas

Nayar founded the company nine years ago - at the age of 49. She revealed that she can't wait any longer because if she turns 50, everything will "cannot be turned back". She named the company Nykaa, which in ancient Sanskrit means "heroine".

The idea to found Nykaa came to Nayar after she noticed that in the West, the highest-end department stores in shopping centers are dedicated to cosmetics. Meanwhile in India, millions of women still have to go to shabby stalls in squalid neighborhoods to get beauty treatments.

Not only that, these stores are mainly owned by male employees. Cosmetic selection is very limited, the display is not attractive and customers do not have the opportunity to sample products.

From there, Nayar aims to create an integrated shopping experience where consumers can shop online. Users can also go to a brick-and-mortar store to try on lipstick or eyeshadow. If they shop online, they will be guided to buy from famous stars.

Choose the opposite direction

Unlike the strategy of "burning money" for promotions to gain market share like many other e-commerce sites, Nykaa says no to price reductions.

"We don't want to be a discount store. We'd rather sell a lipstick in the right color at the list price than sell the wrong shade of lipstick for half the price but leave the buyer disgruntled within minutes of being sold. use," Nayar said.

From 60 orders on launch day, sales grew to more than 1,000 orders within just a few months. Not stopping there, Nykaa has grown even further after launching products tailored to Indian skin tones, skin types and local weather.

"They really have everything. I can compare prices, read reviews before deciding to buy. All my friends shop at Nykaa.", Sakshi Jain, a 21-year-old shared college graduates.

Confidently face the giants

However, Nayar's business journey has not been smooth. She used to face a huge lack of knowledge and experience while navigating the Nykaa in all three areas: beauty, technology and retail. Three chief technology officers quit in the first four years. Despite being a veteran of the banking sector, raising funds initially was a challenge, a far cry from the current situation where Nayar is being sought after by investment banks for the upcoming listing.

Today, she also faces a host of competitors, such as the Shoppers Stop department store chain controlled by billionaire Chandru Raheja and Amazon, which has built a significant online presence in India. However, Nayar, who has always been supported by her family, now has the additional companionship of her 30-year-old twins at work. His son Anchit now heads the online business, and his daughter Adwaita, who was once the chief executive officer of Nykaa, is the CEO of fast-growing clothing retailer Nykaa Fashion.

To create more buzz for her products, Nykaa and Bollywood actress Katrina Kaif created a joint venture company Kay Beauty in 2019 to offer a new line of cosmetics.

"The increasing trend of online shopping created by Covid-19 is now accepted. All beauty products and healthcare companies will benefit. Nayar will have to get used to being accepted. attention," said Nangia, predicting that India's booming beauty business won't wane any time soon.

In addition, Nykaa also established exclusive relationships with foreign brands such as Estee Lauder, MAC Cosmetics,... to start introducing products in India. They also launch a variety of cheaper products to reach different customer segments.

Expansion into men's beauty market

Recently, Nykaa launched a separate app for men. "At conferences, successful men ask me about skin and hair care. So I decided to launch Nykaa Man so that men can shop without guilt or fear," the CEO said. Nayar said.

Ravi Mehta, managing director of London-based Steadview Capital and one of the early investors in Nykaa, says the company has a particularly strong business model among internet companies in the country. India.

"It is one of the fastest growing revenue among 15 startups preparing for IPO in India," Mehta said.

The Indian beauty market is growing rapidly, especially in the context of society that is giving more rights to women. Technopak estimates the beauty market in the South Asian country will grow more than 8% per year until 2025.

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