How Nykaa is Beating Amazon & Flipkart In The e-Commerce War?


Nykaa is a name that everyone must have heard of. It is one of those few companies that created its identity in such a short period of time. If you hear Nykaa, your brain automatically recalls its pink logo and all you can think about is makeup or fashion. But how did Nykaa do that? How was it able to create such a powerful impact on the consumer’s mind that it does not need any detailed explanation, just the name or logo is enough? 

Nykaa was founded in 2012 by a former investment banker, Falguni Nayar. In less than a decade, Nykaa emerged as a popular e-market platform for beauty and fashion products. Today, Nykaa stands tall as a leader in the online marketplace of the beauty and fashion category. It is a leading e-commerce company that defeated e-commerce giants like Amazon and Flipkart.

Backed by reputed private investors such as TVS Capital Funds, Max Ventures, Morgan Stanley Asia and many others, Nykaa clocked in a whopping revenue of ₹ 1,230 crores in the second quarter of the financial year 2022-23. But what strategies did Nykaa opt to gain brand recognition and the position of an industry leader?

Revenue of Nykaa from FY 2018 to 2022

There are many reasons that are accountable for the success of Nykaa. The well-thought-out strategies and the bold decision by Falguni Nayar helped the company to beat the competition and come to the number one position in the entire e-commerce industry.


To understand how Nykaa achieves this milestone, we have to focus on its key strategies. This article helps you dive a little deeper into the business techniques and approaches that drive the significant growth of the company.

  • Government Policies

The implementation of new rules and regulations by the Indian government allowed 100 per cent FDI in online stores that are running on a marketplace model. But these rules do not apply to the inventory-based model. A marketplace model refers to a business model in which businesses follow a zero inventory policy and act as a mediator between the seller and the buyer. On the other hand, the inventory model means those companies that buy the products in bulk, store them in warehouses and deliver when the order gets placed by the customers.

Companies that run on a marketplace-based model like Amazon and Flipkart have to face the heat due to the disruption of FDI. Unlike Amazon and Flipkart, Nykaa runs on an inventory model which helps the company to enjoy the benefits of not having competition from foreign markets. 

Companies following the marketplace model are also not allowed to sell products with their own brand name. And that is why Amazon and Flipkart do not have their own products but since Nykaa follows an Inventory based model, it sells products under its own brand name and earns more profits. 

  • Product Authenticity

Nykaa does what other companies fail to do. It entered the untapped market of Online Beauty and Fashion. The most common pain point of this industry faced by the customers was the unavailability of genuine and authentic products. Understanding these major problems, Nykaa builds the trust of the customer with authenticity check protocols and offers genuine products from top national and international brands. 

If you dig a little deeper, you can find many unlicensed manufacturers selling products on Amazon and Flipkart. Due to a lack of authenticity checks, they sell fake beauty products or even expired products. But Nykaa changed these dynamics completely by sourcing products from renowned brands like Huda, Lakme and others. Direct sourcing of the products helps the company to sell genuine products without any duplicacy issues. 

  • Digital Experience 

Since Nykaa started as an online platform for beauty and fashion products that is why it is essential for the company to ace the game of the digital world and provide a whole new experience to the customer. 

Nykaa focuses on building the trust of customers so that they can buy beauty products online. Solving the bottlenecks of trust and confidence, Nykaa started spreading awareness among the customers digitally. Nykaa built its own online community under the name “Nykaa Network” which currently has more than a million subscribers. Through this network, the company shares many beauty hacks & tips, product reviews, launches and much more information related to the fashion and beauty industry. 

  • Marketing Game 

Along with winning the digital world, Nykaa aces the game of social media marketing. With a strong social media presence, Nykaa has more than 5 million followers on Instagram. The company knows how to attract the attention of customers. Nykaa collaborates with one of the most popular influencers to promote its products. 

Along with influencer marketing, Nykaa also collaborates with the country’s top actresses for mainstream commercials. Big names in the Bollywood industry like Katrina Kaif, Alia Bhatt and Janhvi Kapoor are associated with Nykaa. Recently, Katrina Kaif collaborated with Nykaa while launching her own beauty brand ‘Kay’.

  • Offline and Online Stores

Nykaa Stores

Nykaa did not limit its presence to only online platforms, it stepped fiercely into the offline market as well. From Event Marketing to launching offline stores, Nykaa marked its solid presence in the physical world also. When it comes to events, Nykaa does it all, right from college-level events to country-wide Femina Miss India. 

The launch of offline stores helps Nykaa to reach out to those customers also who still rely on offline stores. The customer experiences the authenticity of the product in the offline store. It is a very smart strategy used by the company to build the trust of the customer. If the customer has great product experience in offline mode then he/she will not hesitate to buy the product online also. 


Understanding the needs of the beauty and fashion market, Nykaa played strategically which makes the company one of the most popular beauty brands in the country. Currently, Amazon sells the highest number of products in this category but Nykaa shines bright with the highest value per order with an average cost of ₹ 1,500 in which 50% of the orders are under ₹ 1,000 and 20% of the orders are over ₹ 5,000.

With brilliant strategic moves, Nykaa becomes a profitable unicorn. Where other unicorn startups are struggling to survive, Nykaa is earning profits and leading India’s online beauty and fashion market. 

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