Abstract
This article provides in-depth insights into Nykaa’s marketing strategy. The comprehensive discussion about Nykaa’s business strategies covers all key marketing areas. The alignment between Nykaa’s different marketing components is critically analyzed, and key lessons learned from the analysis of each factor are highlighted.
At the end, some recommendations are proposed to improve the Nykaa’s marketing strategies. Strategic marketing researchers, teachers and students can read this article to understand how startup firms like Nykaa gain success through innovative marketing strategies.
1. Introduction
Nykaa is an Indian ecommerce company that sells beauty and fashion products all over the India. Founded in 2012, Nykaa has become India’s one of the most valuable startup firms.
This article analyzes how Nykaa marketing strategy helped Nykaa in establishing itself as a prominent fashion and beauty brand.
Click here to get basic information about the company
2. Nykaa marketing strategy
Marketing strategy of Nykaa is analyzed in light of 7-P marketing mix framework:
2.1. Nykaa Product strategy
2.1.1. Nykaa product mix
Nykaa offers wide ranging products, classified in different fashion and beauty categories. As of now, Nykaa offers around 1.8 million products of 1,500+ brands across five segments- women, kids, men, home and tech.
Nykaa product mix mainly includes:
2.1.2. Nykaa product portfolio- recent additions
Nykaa expanded its product portfolio by adding a line of natural, plant based skincare products. Over last five years, Nykaa expanded the portfolio by adding:
2.1.3. Nykaa segmentation, targeting and positioning
| Segmentation basis | Targeting | Positioning |
| Gender | Primary-female (59.4%)Secondary- male (40.6%) | A place where customers can get a wide variety of high quality products that match customers’ diverse fashion needs |
| Age | Main focus (22 to 35 years)Broad target (18 to 50 years) | |
| Occupation | Diverse(Students, working professionals, influences, beauticians etc.) | |
| Income and Lifestyle | Middle to upper class, fashion conscious customers | |
| Beauty preferences | Diverse beauty preferences (both- organic and non-organic fashion products), placing high importance to quality and convenience | |
| Geographic location | Urban and semi-urban |
2.1.4. Nykaa unique selling proposition
Nykaa USP is- “Wide product selection, and sharp focus on offering the curated Omni-channel shopping experience”
2.1.5. Nykaa product strategy- key success factors
• Wider product variety allows Nykaa to cater larger customer base
• Help customers in making right purchase decision through educational content
• Collaborate with brands to launch exclusive products
• Take customer feedback and offer personalized experience to augment the experience
In 2015, Nykaa launched own cosmetics and beauty segment, allowing the company to exercise quality control, build brand identity, and drive up the loyalty
2.1.6. Nykaa product strategy- key challenges
Despite, Nykaa’s emphasis on product quality, the company is facing the counterfeit products issue. The growing number of counterfeit products are hampering the customers’ trust on brand.
Though unconfirmed, but some consumers complain that around 30% of the Nykaa’s products are counterfeit/fake.
2.1.7. Key lessons
Extend the focus from quality and convenience to augmenting overall customer experience through continuous innovation, exclusive product launches, and a brand positioning that resonates with the target customers’ lifestyle and fashion preferences!
2.2. Nykaa Pricing strategy
Nykaa uses different pricing strategies to meet its business objectives:
2.2.1. Competitive pricing strategy
Nykaa primarily uses competitive pricing strategy for all its products. The competitive prices enable the company to compete with rivals like Flipkart and Amazon.
However, a key weaknesses of Nykaa’s pricing strategy is that despite the company’s claim to charge competitive pricing, an in-depth analysis shows Nykaa charges higher prices than Amazon, Flipkart and Purplle.
Here is a price comparison of Nykaa’s beauty products with key competitors:
Source: Capital Mind.com
Above table clearly shows Nykaa charges higher prices than its peers.
2.2.2. Value based pricing strategy
Nykaa also uses the value based pricing strategy to differentiate itself from the competitors and justify its prices. Nykaa employs value based pricing by focusing on the factors like- quality, variety, convenience, and a positive shopping experience.
2.2.3. Promotional pricing strategy
Nykaa relies on the promotions and discounts to boost the sales. Key promotional pricing tactics include bundle pricing offers, buy-one-get-one free offers, limited time discounts and seasonal sales. The rationale is to create a sense of urgency, and push the customers to take benefit of discounted prices.
Here are some examples of Nykaa’s promotional pricing tactics:
Source: Paisawapas Blog
Source: Zoutons.com
The extensive discounts and promotional deals give a strong boost the sales.
2.2.4. Dynamic pricing strategy
As Nykaa has an inventory based business model, the company also uses the dynamic pricing strategy by adjusting its prices according to demand, market conditions and inventory level.
2.2.5. Nykaa pricing strategy- Key success factors
• Exciting promotional discounts
• Pricing strategy well aligned with the product strategy
• Flexible pricing strategy that adapts according to changing environment, and suits diverse customer base
2.2.6. Nykaa pricing strategy- Key challenges
• Despite the company’s claim to charge competitive prices, Nykaa’s prices remain higher than competitors.
• There exists lack of transparency in Nykaa’s pricing strategy.
• Here is a comment of a dissatisfied customer over Nykaa’s pricing:
Source: Nykaa Network
2.2.7. Key lessons
Keep pricing strategy flexible when targeting a diverse customer base. Ensure it is strong aligned with other marketing mix elements. Integrate transparency in the pricing strategy to avoid customer dissatisfaction.
2.3. Nykaa Distribution (Place) strategy
2.3.1. Inventory based business model
Nykaa has built a resilient distribution network that comprises 40 fulfilment centers spread in 18 cities. The company employs the inventory based business model, and follows following service delivery route:
2.3.2. Omni-channel retailing
Nykaa offers an Omni-channel experience to optimize the customers’ overall shopping experience:
2.3.3. Nykaa website
Nykaa has a well-functioning ecommerce website. The website offers customer support services, resolves customer queries, provides brand related information, and processes online orders.
2.3.4. Nykaa app
Nykaa launched its mobile app in 2015. The mobile app is well-integrated with the Nykaa’s social media accounts and official website. The app has user-friendly interface, and makes online ordering process convenient for customers:
2.3.5. Nykaa offline stores
Currently, Nykaa has 141 physical stores spread in 56 cities. Nykaa is planning to increase the physical stores to 300 by the end of this year. Nykaa’s physical stores have three formats:
• Nykaa Luxe
• Nykaa Kiosks
• Nykaa On Trend
2.3.6. Nykaa distribution strategy- key success factors
Nykaa’s distribution strategy success lies in its ability to offer Omni-channel experience. Easy website navigation, pop-up stores, kiosks, offline store network, and Nykaa app- all channels are well-integrated, and cement the Nykaa’s position in ecommerce market.
2.3.7. Nykaa distribution strategy- key challenges
• Despite the commitment to sustainability, Nykaa struggles with handling the product waste across its supply chain.
• As per Reuters, Nykaa profits have cut halve due to rising fuel and distribution costs. However, Nykaa has somehow overcome this challenge by increasing the distribution centers, which cut down the travel time.
2.3.8. Key lessons
Open multiple distribution channels to increase the customer touch points and widen the market reach. Ensure all distribution channels are well-integrated, and offer an Omni-channel customer experience.
2.4. Nykaa Promotion strategy
This section provides details about different types of marketing strategy used by Nykaa:
2.4.1. Marketing and advertising strategy of Nykaa
Nykaa adopts an emotional advertising strategy to connect with its customers at a deeper level. Nykaa has successfully curated some highly persuasive advertising strategies that helped brand in expanding its online network.
Nykaa invests on TV, print and social media advertising to promote the brand and engage the audience.
2.4.2. TV advertising
Nykaa has successfully run various TV ads that increased the brand awareness, and created WOM. Nykaa’s some notable TV ads are:
• Beauty in every shade ad- celebrated diversity
• Go Play ad- encouraged experimenting with makeup
• Lipstick under my Burkha ad- focused on empowerment and self-expression
• Pout perfect ad- celebrated boldness
2.4.3. Nykaa print advertising
Nykaa invests on print advertising. It publishes ads in different lifestyle and fashion magazines (like Elle, Femina, Vogue and Cosmopolitan etc.).
Nykaa’s ad posted in Femina magazine:
Nykaa also invests on billboard advertising to maximize the exposure to target market.
2.4.4. Nykaa digital marketing strategy
Other than traditional marketing strategies, Nykaa invests on digital marketing strategy.
• Nykaa regularly posts the blogs and educational tutorials. The purpose is to help customers in making right choices. This strategy indirectly promotes the brand by enhancing the brand visibility.
• Nykaa also sends the promotional emails to the highly engaged customers.
• Nykaa invests on the SEO and content marketing strategies. The company improves the ranking through keyword search, on-page optimization, and content creation.
Here is the result of Nykaa’s effective SEO strategies:
Source: Ahrefs.com
Nykaa social media marketing strategies involve posting ads over different social media platforms. The company has active presence over Facebook (3.4 million), Instagram (2.3 million) and YouTube (1.4 million). Nykaa posts educational, emotional and entertaining content over different social networking sites.
To broaden the market reach, Nykaa has integrated the ‘Shop Now’ option over Facebook:
On Instagram, Nykaa makes creative and visual posts, and leverages the power of user-generated content. The company posts infographics and short-engaging videos of different celebrities to boost the audience engagement.
Nykaa-Snapchat partnership generated a 9x return on investment, and achieved 30% click-through-rate. Optimized and creative settings, and a collection of story-telling ads played a key role behind Nykaa’s Instagram marketing success.
In 2023, Nykaa launched an ad film “Matte to last, made for you” to launch its Matte foundation. The campaign successfully captured the spirit of Indian Youth- Financial Express reports.
Influencer marketing is an important part of Nykaa’s social media marketing strategy:
2.4.6. Nykaa influencer marketing strategy
Nykaa heavily relies on the influencer marketing for brand promotion. Nykaa has a network of 3,055 influencers over different social networking platforms.
Following graph shows the reach of Nykaa’s influencers to target audience:
Source: Buzz-in Content.com
An example of Nykaa’s influencer marketing success is the promotion of Clay it Cool mark. Nykaa influencers gave a strong boost the mask’s sales by posting reviews, and sharing their videos with the masks:
2.4.7. Nykaa loyalty programs
Nykaa Prive is a loyalty program that grants special incentives to the loyalty program members. Nykaa also offers the ‘Nykaa rewards’ to encourage the repeat purchase through both- online and offline stores.
2.4.8. Nykaa marketing strategy- key success factors
• A well-integrated promotional mix that sends a consistent brand message.
• Informational, entertaining and emotional content blended to make a strong appeal.
• Extended market reach by investing on marketing and communication channels that offer high return on investment.
2.4.9. Nykaa marketing strategy- key challenges
Nykaa at often receives criticism for challenging the social and cultural norms. Recently, Nykaa faced outrage for its ‘Navaratri sale’.
Brand gave special discounts over lubes and condoms as part of Navaratri sale, which created an outrage over Twitter.
2.4.10. Key lessons
Integrate the local cultural norms and values into advertising and communication strategies to avoid the outrage. Invest on promotional and advertising strategies that resonate with the target customers’ mentality.
2.5. Nykaa Process strategy
Nykaa has made the online shopping experience highly convenient through easy web navigation, user-friendly app interface, and a web of physical stores. Omni channel retailing strategy enables the Nykaa to interact with customers across multiple touch points.
2.6. Nykaa People strategy
Nykaa needs to improve its people strategy, as its staff fails to offer satisfactory customer service. Based on 238 customer reviews, Nykaa got only 1.3 out of 5 stars, showing customer dissatisfaction with the Nykaa’s customer service.
2.7. Nykaa Physical evidence strategy
Nykaa invests on store layouts, web aesthetics, and visual merchandising- as part of its physical evidence strategy.
Such eye-catching visuals grab the customers’ attention, and enhance overall shopping experience.
Based on analysis of Nykaa marketing strategy, the article proposes following recommendations:
3. Recommendations
• Bring continuous innovation, and expand the presence in natural beauty care segment.
• Tackle counterfeit products issue to increase the customers’ trust
• Integrate transparency in the pricing strategies
• Avoid charging prices higher than MRP
• Invest on automation to reduce the distribution costs
• Avoid engaging in controversial ads that harm brand image
• Increase investment on social media marketing and influencer marketing strategies considering their high return on investment.
• Improve customer service strategy by training the staff to boost customer satisfaction.
4. Conclusion
To sum up, Nykaa marketing strategy makes a valuable contribution to the company’s success. Although, the article has highlighted some flaws in Nykaa marketing strategies, but overall, Nykaa has developed a wise marketing-mix, which is well-aligned with its business objectives.
You want to know more about Nykaa’s internal (strengths/weaknesses), and external (opportunities/threats) business environment? Read our article ‘Nykaa SWOT analysis’.
5. References
Challenge validation. (n.d.-b).
Bawa, P. (2023). NyKAA Case Study on Digital Marketing Strategies 2023. Safalta.
30% of nykaa products are fake ???? Really is it true?? | Nykaa Network. (n.d.).
Sarkar, S. (n.d.). Nykaa: How does it stack up against peers – Capitalmind. Capitalmind.
Nykaa has charged more money than mentioned in MRP for product Body shop night mask. How can i trust products on nykaa if there is no transparency in price. My product mrp is 1795 but nykaa charged me 1895. Why? There is mismatch. Order id is NYK-30475466-2786467 | Nykaa Network. (n.d.).
Reporter, S. (2023, February 17). Omni-channel expansion to strengthen Nykaa ‘s grip on India’s cosmetic industry. Retail Asia.
Sophia, D. (2022, May 27). India’s Nykaa profit halves as marketing, fuel costs balloon. Reuters.
Website Traffic Checker: Estimate any site’s traffic. (n.d.).
Sharma, K., & Sharma, K. (2019). Snapchat ad format helped Nykaa achieve 9X ROI and 30% hike in CTR. Business Insider.
Online, B. (2023, June 23). Nykaa Cosmetics unveils ad film ‘Matte To Last, Made For You’ Financial Express.
How Nykaa’s consistent influencer marketing strategy reaps results in form of increased consumer trust and engagement. (n.d.).
