Nykaa's beauty e-commerce arm, led by CEO Anchit Nayar, announced strong performance in the September quarter, driven significantly by its quick-delivery service, Nykaa Now. This rapid delivery initiative is proving instrumental in expanding Nykaa's market share across India's top seven cities, enhancing customer satisfaction, and solidifying its standing in the competitive beauty and personal care landscape. Nykaa Now's appeal spans all price points, including high-end luxury products, which can now be delivered to customers within a timeframe of 30 minutes to 2 hours.

Anchit Nayar emphasized that Nykaa Now has effectively allowed the company to capture a larger portion of the personal care market, a segment traditionally fragmented among various horizontal and quick commerce players. This is evidenced by a healthy increase in customer penetration for everyday personal care items such as shampoos, conditioners, and body wash. Consequently, Nykaa is increasingly being recognized not just as a premier beauty destination, but also as a comprehensive personal care hub.

Complementing its digital prowess, Nykaa is aggressively pursuing offline expansion. The Mumbai-based retailer views its brick-and-mortar stores as crucial hubs for efficient and faster deliveries, particularly leveraging them as hyperlocal delivery points for luxury products in a cost-effective manner. By the end of the September quarter, Nykaa had grown its physical footprint to 265 stores across 90 cities, adding 19 new stores and expanding into 8 new cities during that period. The total retail space occupied by these stores reached 275,000 sq. ft., marking a substantial 37% year-on-year increase. Crucially, 53 of these stores also serve as rapid delivery points, bolstering the Nykaa Now service.

Financially, Nykaa reported robust figures for the September quarter. Operating income surged by 25% year-on-year to ₹2,345 crore, while net profit saw a significant leap to ₹32.98 crore, up from ₹12.97 crore in the prior year. The company's total gross merchandise value (GMV), which represents the total value of goods sold, grew by 30% year-on-year, reaching ₹4,744 crore during the three months ending September.

A core element of Nykaa's growth strategy in the beauty segment is premiumization, a trend that is driving higher average order values across consumer-facing companies. Premium brands now constitute a substantial two-thirds of Nykaa’s gross merchandise value within its stores. Revenue from Nykaa’s beauty business, its primary growth engine, climbed by 25% year-on-year to ₹2,131 crore in the September quarter, with profit from this segment rising to ₹95 crore from ₹76 crore in the previous year. This strategic investment in premiumization has, however, led to increased marketing costs, which rose to 17.5% of net sales value (NSV) from 13.7% in the same quarter last year, reflecting a deliberate effort to drive customer acquisition and enhance beauty consumption penetration in India.

In contrast to its thriving beauty and personal care segment, Nykaa has reevaluated its strategy for its multi-brand fashion retail format. Facing slower growth and broader macroeconomic pressures impacting consumer spending on fashion, the company has scaled back its focus on fashion within the overall GMV mix. This reorientation involved shutting down some large-format physical stores and reducing reliance on third-party distributors. These measures have started yielding positive results, with the fashion segment's operating revenue marginally increasing to ₹200 crore from ₹166 crore year-on-year, and a notable reduction in net loss, which narrowed to ₹12 crore from ₹32 crore last year. Adwaita Nayar, CEO of Nykaa Fashion, confirmed this concerted strategy to streamline non-Nykaa channels in fashion, aiming for a "better and higher quality business" by concentrating on Nykaa as the primary channel. While fashion's share in Nykaa’s house of brands declined to 61% from 69% year-on-year, the segment's GMV still grew by 37% to ₹1,180 crore, indicating a more focused approach.