3 weeks ago

Nykaa's Inventory Model Drives the Margins That Fund Its Expansion

Nykaa's Inventory Model Drives the Margins That Fund Its Expansion
Inside Nykaa's Inventory Model: Where The Margin Comes From · inc42.com

Nykaa is a big shop that mostly sells makeup, skincare and other beauty products.

Instead of letting other shops put their products on its shelves, Nykaa buys the products itself and sells them to you.

That means when something sells, Nykaa keeps more of the money.

But it also means that if a product doesn't sell, Nykaa has to deal with it, sometimes by giving big discounts.

Nykaa uses the money it earns from beauty products to build other parts of its business, like real stores, its own brands, a fashion website and very fast delivery.

It has 237 stores in 79 cities and can deliver some products within ten minutes in 13 cities.

Nykaa even makes its own makeup brands and also earns money when other brands pay to advertise in its app.

Owning everything is costly because products sit in warehouses and money is tied up until they sell.

By 2030, Nykaa hopes to sell five billion dollars worth of goods.

Key facts

Q1 FY27 Revenue
₹2,791.3 Cr, up 24% YoY
Q1 FY27 Net Profit
₹79.8 Cr
Gross Margin
45.9% in Q1 FY27, up from 44.6% in Q1 FY26
Traded Goods Spend
₹1,757.9 Cr in Q1 FY27, up 21.7% YoY
Store Network
237 stores across 79 cities
Beauty GMV (Q1 FY27)
₹4,105 Cr, up 28% YoY
Nykaa Now Coverage
Expanded from 3 to 13 cities; target of 25+ cities by end FY27
FY30 Targets
$5 Bn GMV, 2.5-3X revenue growth, 4-5X EBITDA growth, ROCE above 40%

Sources

Related news