WHEN FALGUNI NAYAR says that her family has one primary interest — the beauty business Nykaa — it seems like a scene out of a soap opera. Her daughter Adwaita (CEO, fashion) has been with her since the launch of her ₹10,000-crore empire. Son Anchit (CEO, beauty) joined the business in 2018. The trio, claims Nayar, is a huge strength for each other. “We are believers of ‘long-termness’ in the decision-making that comes when a family owns a substantial part of the business,” says the founder & CEO of Nykaa.
What gives this soap opera a contemporary twist is that the matriarch (Nayar) calls the shots. Nayar likes to call herself a legacy entrepreneur who has the agility of a startup founder. “I am bolder than legacy… In my first year my margins used to be less than 35%, and my marketing cost was more than 55%.”
No wonder both Anchit and Adwaita call their mother a risk-taker. “She is entrepreneurial, extremely thick-skinned, and resilient. She can envision the company a decade from now,” says Adwaita.
When Nayar launched Nykaa in 2013, Amazon hadn’t entered India, while Flipkart was a fledgeling marketplace struggling to raise its first round of funding. When she talked about launching an e-commerce beauty platform, the industry wrote its obituary even before it was launched. “If you want to do e-commerce, then why beauty, why not fashion, was what I was told,” recalls Nayar. She launched Nykaa with two cardinal principles — source directly from brands and never discount. That was completely against the industry rulebook, which was all about deep-discounting. Deep-discounting helped customer acquisition, and companies unapologetically burnt capital. But deep-discounting also dissuaded global beauty brands from launching in India as it ate into their margins.
A no-discounting strategy made life difficult in the initial years. Nykaa’s average order values were often less than ₹700. Today, the company has achieved the ₹10,000-crore revenue landmark as an omni-channel player with 55 million customers that not only has a network of 324 stores but also distributes to over 520,000 general trade and modern trade stores through Nykaa Superstore. “Nykaa holds the right kind of margins because we built it right,” says Nayar. It hosts more than 10,000 global and domestic brands across beauty, fashion, and lifestyle. Global brands such as Charlotte Tilbury, Huda Beauty, Kiehl’s and Fenty Beauty, which didn’t have a retail presence earlier, entered India through Nykaa.
Nayar has never subscribed to a herd mentality. She entered the fashion business when most fashion platforms (barring Myntra and Ajio) had failed. Investors yet again questioned her rationale. The huge losses that the company reported in the fashion business in its first quarterly results soon after it got listed in 2021 drew a lot of flak. “We built the fashion business with a lot of conviction,” she says. “We got early wins due to Covid, and after that, growth in India slowed down. Since we were listed, we got questioned. Even in beauty, we had one or two quarters of no growth, but we were unlisted then,” she says, adding that the business took six to seven years to mature. “Our early AOV (average order value) was just ₹700, then we built it up to ₹1,400 and then during Covid it went up further. The benefit comes as the platform matures. I was convinced that it will be the same in fashion, too.”
In Q1FY27, Nykaa’s fashion business registered nearly ₹1,500 crore GMV (gross merchandise value), a year-on-year growth of 53%. Like beauty, the fashion business doesn’t discount, nor does it work with third-party sellers.
If Nayar is convinced about building a business, she seldom succumbs to slowdowns or failures. “I go slow when something is not going right,” she says. “I feel that the pressure goes and things start falling in place later.”
The siblings
At her sixth-floor office in Worli, Nayar looks relaxed. She tells Adwaita that she would pick up her kid from playschool. “I am doing all that I missed doing when my kids were growing up,” she says. Just as one begins to wonder if she is going to hang up her boots, Anchit clarifies, “FN is very much a part of the business and is in the driver’s seat.”
How different are her children? Nayar chooses to first speak about the common thread: “The advantage we have as a family is that we are very number-based, but at the same time we do have a feel for what it takes to build a brand, what it takes to communicate with the customer.” Adwaita says she is similar to her mother, as her passion also lies in building brands from scratch. “I would say mom is a great risk-taker. I am a good zero-to-one builder. I think I have the ability to marry left and right brain. Anchit is a great operator of scaled businesses. He’s also very strong with external relations and is commercially savvy,” says Adwaita. “Every stage of the business is sort of covered between the three of us — from inception to early days and then scaling.”
Building scale
In 2018, Anchit was in Mumbai on a month-long paid sabbatical from Morgan Stanley in New York, where he worked in the mergers and acquisitions vertical, having been a part of a host of marquee deals in the media and telecom sectors. He never thought of relocating to India until he spent time at the Nykaa office. “I was getting bored at home, so I decided to see what my mom and sister were up to. I fell in love with what they were building.”
As an investment banker, Anchit’s role was advisory. “I went back to Morgan Stanley at the end of that one month and had a frank conversation with my group managing director. I told him it was never the plan, but it was a once-in-a-lifetime opportunity to be able to operate a business,” says Anchit, adding that Nykaa had done maybe one or two rounds of fundraising then. “So, it was at a sweet spot where I could have a meaningful impact on the outcome of the company.”
Investment banking and M&As in telecom and media may not have much in common with the beauty business, but they taught Anchit attention to detail and client obsession. “I learnt to put clients at the heart of everything we do. And I think bringing that into a retailing business was unique, but it has paid rich dividends and has been a big reason for our success. This client-minded approach that we take to working with our brand partners has made them trust us,” he says. Not only has he been instrumental in getting a lot of global beauty brands such as Charlotte Tilbury, SK-II, and Kiehl’s into the country, Nykaa has also been distributing them in various retail channels as well as setting up their free-standing stores.
Anchit says he convinced the luxury brands that Nykaa was building the beauty market the right way. And if they came along on this journey, it would open up an incredible market to them, “without them having to compromise on their brand equity”.
House of Brands
Adwaita co-founded Nykaa in 2013 after a short stint with Bain Capital, which she had joined after graduating from Yale. “I remember the early days of just thinking about what to build. We surveyed a lot of different businesses. We looked at beauty, old-age solutions, holiday homes, and then eventually zoned in on beauty because there’s just so many things that make beauty an incredibly exciting space. At that time, we felt that there was no one-stop shop for beauty,” says Adwaita, who in the initial days of Nykaa even packed the orders that were placed on the website.
Through the brand’s 14-year journey, Adwaita has built various businesses from scratch under the Nykaa umbrella, which have been scaled by Anchit. “I often joke that if Anchit and me are merged, it will make for a perfectly skilled human being,” she says. Adwaita now spends most of her time building Nykaa’s branded business, House of Nykaa. The retailer, which owns 13 brands such as Nykaa Cosmetics, Kay Beauty, Dot & Key, Nykd by Nykaa (lingerie and sleepwear) and KICA (activewear for women) has clocked nearly ₹3,800 crore annualised GMV in Q1FY27. By FY30, it expects to cross the ₹8,000-crore-plus mark.
“There are a lot of Indian-specific concerns that global brands don’t necessarily address. Therefore, home-grown brands can actually emerge and establish themselves as enduring long-term brands,” says Adwaita.
The plan is to be a formidable house of brands company in India. “Our house of brands strategy is distinct from our retail business. We totally recognise that this is a fully different business that we are trying to create,” she says. Being an e-commerce beauty retailer for over a decade has enabled Nykaa to understand the needs of Indian consumers better.
Nykaa has also spread its wings to international shores. It has set up a joint venture with Apparel Group (Nykaa holds 55% stake) and launched Nysaa, an omni-channel beauty platform to cater to GCC countries; currently Nysaa has six stores across the U.A.E. and Oman. Nayar also hints at betting on the business of wellness and longevity but doesn’t divulge much.
The trio’s skill sets — the appetite to take risks, building businesses from scratch, and the ability to scale — have helped them build India’s first beauty-only conglomerate. The plan obviously is to soar higher.