Whereas Nykaa began as an e-commerce platform, founder and CEO Falguni Nayar is a “huge believer” in bodily retail and mentioned there may be demand from customers.
“The final two years have been very a lot impacted by Covid-19 and what it does to bodily retail. Nonetheless, we do consider that for those who have a look at the maths and statistics, e-commerce penetration is just 8%,” Nayar mentioned on CNBC’s “Road Indicators Asia” on Thursday.
“A whole lot of magnificence is offered offline and Nykaa has turn into such a giant model that we can’t ignore our offline channel in addition to offline customers. There will probably be higher emphasis on shops, however I feel we’ll proceed to be a dominant e-commerce participant.”
Nykaa, which sells cosmetics, grooming and trend merchandise, presently has 100 retail shops in India, with its newest opening simply final week. The corporate had a blockbuster debut in November hitting a valuation of virtually $14 billion – making it India’s first woman-led unicorn itemizing.
In its most up-to-date quarterly report, nonetheless, the corporate reported a 58% plunge in internet income.
Different newly public Indian firms have come beneath stress because the halo of their high-profile IPOs fades and valuations come beneath scrutiny. Earlier this week, Reuters reported that India will probe firms hoping to IPO about valuation metrics.
Whereas these firms largely had stellar debuts, many are actually buying and selling effectively beneath their IPO value –together with Nykaa, Paytm, Zomato and CarTrade.
Nayar mentioned tech valuations would see “some adjustment” on account of excessive inflation globally and rising rates of interest. For Nykaa, she mentioned the newest spherical of coronavirus restrictions in main Chinese language cities will seemingly current provide chain challenges.
“I feel that’s holding us again and typically now we have to take further inventory, assuming that disruptions will probably be there,” mentioned Nayar, who based the corporate in 2012.
Whereas Nayar mentioned the influence of surging commodity costs and inflation stays a key watcher, she is assured in “the lipstick impact.”
“Cosmetics and sweetness are these small luxuries that buyers do not lower down on so drastically as a result of on the finish of the day, the proportion spent on magnificence within the nation is as little as $12 to $14 per capita,” she defined.
“We do consider that the sweetness trade is in an inherent structural change the place Indian customers need extra magnificence consumption,” she added.
Correction: This story has been up to date to appropriate the spelling of Nykaa.