Nykaa fashion, a Nykaa-parent FSN E-commerce Ventures Ltd. subsidiary, has logged steady progress since its introduction and continues to grow consistently. Nykaa Fashion competes with Myntra, Ajio, Tata Cliq, and Amazon Fashion and Flipkart Fashion.
Although the new venture is yet to turn profitable, analysts don’t seem too concerned. “Losses in the fashion business may be key, but we favour Nykaa’s slow and steady approach in this segment that is prone to hefty losses if only growth were to be chased given the high fragmentation. Nykaa may also create an edge in fashion with its private labels and exclusive tie-ups with international brands,” Elara Securities said in a post-earnings report.
Their tie-ups with international brands like California-based fashion e-tailer REVOLVE and Dubai-based fashion and lifestyle retail conglomerate Apparel Group helped them establish their first international footprint after ten years of existence.
As a study by Bain and Co. reveals that first-time online shoppers often belong to the GenZ demographic, Nykaa’s international tie-ups fit in with their target audience and provide an Indian alternative to chains like Sephora and Ulta, which have not yet been introduced in the Indian market.