Beauty ecommerce unicorn Nykaa is setting its sights on the Middle East, expecting a significant 10% year-on-year growth in the region following the launch of its omnichannel beauty platform Nysaa in the Gulf Cooperation Council (GCC) area.
Market Potential in the Middle East
During the fourth quarter analyst call of FY24, Nykaa highlighted the immense potential of the Middle East beauty and personal care market. With a market size of $30 billion in the GCC and an impressive per capita spend of $500 on beauty products, the region offers lucrative business opportunities for Nykaa.
Expansion Strategy and Partnerships
In FY24, Nykaa forged a strategic alliance with the UAE-based Apparel Group to expand its presence in the Middle East. Leveraging the Apparel Group’s extensive retail network of over 2,200 stores across the UAE, Saudi Arabia, Qatar, and Kuwait, Nykaa launched its ecommerce platform Nysaa in January. Nykaa holds a majority stake of 55% in Nysaa, with the remaining 45% owned by the Apparel Group.
In February, Nykaa further solidified its commitment to Nysaa with a $1.9 million investment through its subsidiary FSN International. Subsequently, in March, Nykaa ventured into brick-and-mortar retail internationally with the inauguration of the first Nysaa-branded store in Dubai. The store offers a curated selection of international brands, including Kylie Cosmetics, Kay Beauty, Rituals, and Stila.
Financial Performance
Despite a 48% quarter-on-quarter dip in consolidated net profit in Q4 FY24, Nykaa’s net profit more than doubled on a year-on-year basis, signaling robust growth momentum. For the full fiscal year FY24, the company witnessed an impressive 80% growth in net profits to INR 69 crore compared to FY23. Operating revenue for the full year also surged by 24% to INR 6,385.6 crore, underscoring Nykaa’s strong performance in the beauty ecommerce sector.
Conclusion
Nykaa’s expansion into the Middle East underscores its commitment to tapping into new markets and capitalizing on emerging opportunities in the beauty and personal care segment. With strategic partnerships, investment in omnichannel infrastructure, and a focus on international expansion, Nykaa is well-positioned to achieve sustained growth and success in the global beauty ecommerce landscape.
