Unveiling the Marketing Strategy of Nykaa: A Comprehensive Analysis

Digital Marketing December 12, 2023


In the realm of Indian e-commerce, Nykaa has emerged as a powerhouse, captivating the beauty, wellness, and fashion landscape. Founded in 2012 by Falguni Nayar, Nykaa has not only become a unicorn startup but has also diversified its offerings from an online-only model to an omnichannel giant. This case study, curated by Aditya Shastri and his student team from the IIDE's Post-Graduation Programme in Digital Marketing, delves into Nykaa's marketing strategy, pinpointing its strengths, identifying pain points, and proposing innovative solutions to enhance conversion rates.

Nykaa: A Glimpse into the Beauty Empire

Founder's Vision

Falguni Nayar, a former managing director at Kotak Mahindra Capital Company, envisioned Nykaa as a platform that goes beyond selling beauty products. In 2015, the company expanded its horizons, transforming into an omnichannel model and venturing into a diverse range of products beyond beauty.

Inventory and Valuation

Nykaa operates on an inventory-based model with warehouses strategically positioned across India. Valued at ₹85 billion (US$1.1 billion) in 2020, Nykaa achieved the significant milestone of being the first unicorn startup led by an Indian woman.

Offline Presence

In addition to its thriving online business, Nykaa boasts an offline presence with 76 brick-and-mortar stores nationwide. These include Nykaa Luxe, Nykaa On Trend, and Nykaa Beauty Kiosks, creating a seamless fusion of digital and physical retail experiences.

In-House Brands

Nykaa has strategically crafted a portfolio of in-house brands, ranging from Nykaa Naturals and Nykaa Cosmetics to Nykd by Nykaa and collaborations with renowned designers like Masaba Gupta.

Researching Nykaa's Marketing Strategy

Website Analysis

User Experience Challenges

The student team discovered that Nykaa's website faced challenges in user experience, with feedback suggesting it appeared overly female-centric. This raised concerns about inclusivity and potentially lowered the purchase intent among male visitors.

UI/UX Issues

The website analysis revealed a flat and non-user-friendly design, coupled with a poorly designed header. The team recognized the need for a more intuitive interface to enhance the overall user experience.

Social Media Marketing Analysis

Influencer Marketing

Nykaa strategically leverages social media platforms for brand promotion, particularly through influencer marketing. The brand collaborates with influencers to showcase products, create tutorials, and review new launches.

Gender-Targeted Content

Despite the significant male audience on social media platforms, the team observed a potential mismatch between the content and the diverse audience. Adjusting content to be more inclusive could be a key improvement.

SEO Analysis

Organic Traffic

Nykaa's blog, Beauty Book, plays a crucial role in driving organic traffic. The brand excels in SEO, ranking for a variety of keywords related to beauty, fashion, and specific product categories.

Domain Authority

With a Domain Authority (DA) of 55, Nykaa demonstrates a strong online presence. The team identified key non-branded keywords that contribute to Nykaa's high visibility, such as "dusky skin," "curly hair," and more.

GDN Analysis

Display Ads

The analysis of the Google Display Network (GDN) revealed that a small percentage of traffic (1.66%) is attributed to display ads. YouTube emerged as the leading contributor, showcasing the potential for video-based advertising.

App Analysis

User Interface

The team noticed similarities between Nykaa's app and website design, emphasizing flat-lay images. However, concerns were raised about the lack of personalization in the user interface, potentially affecting user engagement.

App Icon Consistency

Discrepancies were identified between the Android and App Store versions of the Nykaa app icon updates. Ensuring consistent updates across platforms could enhance brand cohesion.

Solutions for Nykaa's Marketing Strategy

Website Strategy

Personalization for First-Time Visitors

To address the perception of a female-centric website, the team proposed an option for first-time visitors to choose their gender, creating a more personalized experience.

Landing Page Optimization

Suggestions included incorporating special discount codes on the landing page header to incentivize app downloads and implementing attractive pop-ups for new users with personalized offers.

Blog Ranking Strategy

The team proposed running ads for blogs to enhance visibility and drive more customers to popular products, ultimately fostering loyalty.

Checkout Page Discount Code

Creating urgency on the checkout page with time-limited discount codes aimed at preventing drop-offs and encouraging immediate purchases.

Social Media Marketing Strategy

YouTube Story Ads

Recognizing the high view rate of YouTube story ads, the team recommended Nykaa capitalize on this platform by creating engaging story-focused content.

Engagement with Queries

Encouraging Nykaa to actively engage with user queries on both Nykaa's and influencer's pages, fostering a sense of community and trust.

Conversion Rate Optimization Strategy

Personalized Push Notifications

Ensuring push notifications are personalized and relevant to avoid user irritation and enhance engagement.

Email Marketing Enhancements

Advocating for personalized email content, including the user's first name and specific intent, to align with urgency-inducing subject lines.

WhatsApp and SMS Marketing

Introducing WhatsApp marketing with relevant blog links and shopping links, along with user-specific SMS marketing featuring valid intent and special coupon codes.

SEO and SEM Improvements

Suggestions included refining SEO and SEM efforts to capture new users and prevent them from opting for competitor e-commerce brands.

Retargeting Strategies

Utilizing pixel codes for retargeting blog readers with creative ads emphasizing scarcity and urgency, driving conversions.

Conclusion: Nykaa's Path Forward

Nykaa, despite its dominance in the beauty and fashion space, recognizes the perpetual need for improvement in the ever-evolving digital landscape. This comprehensive analysis and the proposed strategies by the student team underscore the importance of refining digital marketing strategies to enhance conversion rates.

The Digital Marketing Landscape

In the era of rapid digitalization, large e-commerce brands like Nykaa are navigating a competitive landscape. The student team envisions a potential increase in Conversion Rate Optimization (CRO) from 0.5% to 2% by implementing their suggested strategies.

A Call for Digital Marketing Expertise

The case study echoes the significance of digital marketing and the growing demand for experts who can craft robust strategies. IIDE's Post Graduation Program in Digital Marketing stands as a testament to the evolving landscape and the need for skilled professionals.

Acknowledgments and Discussion

The insights provided by Aditya Shastri and the IIDE student team shed light on Nykaa's strengths and areas for enhancement. The case study serves as a valuable resource for marketers, entrepreneurs, and enthusiasts alike, fostering a deeper understanding of the intricate world of digital marketing.

As the digital landscape continues to evolve, the journey of Nykaa and similar e-commerce giants unfolds, presenting new challenges and opportunities. Engaging in discussions and sharing thoughts on this case study can further enrich our understanding of digital marketing strategies in the dynamic Indian market.

In conclusion, the case study on Nykaa's marketing strategy serves not only as an analysis of a thriving e-commerce giant but also as an educational tool for those navigating the complexities of the digital marketing terrain.