How Nykaa’s beauty business is defying the consumption slowdown

Amid sluggish earnings across India’s new-age economy, Nykaa has emerged as an outlier. While most consumer-facing businesses are struggling to maintain momentum, Nykaa posted a 26% year-on-year revenue jump to Rs 2,267 crore in Q3 and a 61% jump in profit to Rs 26 crore. 

This stands in stark contrast to the broader e-commerce landscape. Delhivery—a key player in logistics—managed just 8% revenue growth year-on-year, Honasa Consumer (Mamaearth parent) recorded a 6% rise, and FirstCry reported 14% growth. Even Swiggy and Zomato, which typically see a seasonal boost during the festive quarter, clocked sub-20% growth, disappointing investors.

As a result, several of these companies saw their stock prices slip post-earnings, as expectations for a consumer spending surge during the festive period were unmet. Nykaa, meanwhile, recorded a 33% jump in gross order value at Rs 3,389 crore. 

What is helping Nykaa is a mix of market tailwinds, including the increasing shift in beauty purchases to online from offline, a premium positioning by onboarding exclusive international brands, and just the sheer dominance in the category, with rivals like Walmart-owned Myntra and Reliance Retail’s Tira Beauty far behind in terms of sales.