Due to women co-founder, Nykaa also has a very aspirational appeal among the woman populace. Plus it pays top dollar for talent (I’m in ISB and have seen Nykaa posting jobs vs brands like Tata Digital / P&G / HUL / Lo’real, etc.), so they do get a talent edge too.
Key thesis pointers for Nykaa to keep doing well:-
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Organic engagement on its platform courtesy user communities / experts / influencers. This is hard to replicate by any new platform.
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Range of SKUs – one stop shop for all thing related to skin care, and fashion
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Niche of Nykaa – catering to a certain segment that’s sticky, has high buying power and this segment is expanding high. Nykaa is an aspirational brand. People want to upgrade to Nykaa. It’s not just an outlet.
I do expect operating leverage to kick in incrementally even in the next 2 years, mainly on account of ad spends increasing in lower proportion as compared to revenue growth. Let’s see how the story plays out.
D – Invested.
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