India’s Nykaa expects festival season to boost demand

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BENGALURU: Indian cosmetics-to-fashion retailer Nykaa said on Friday it expects stronger demand for its products in the current quarter after a “muted season” in which inflationary pressures dented consumer spending.

The upcoming festival season, which runs through the end of the year, should further boost consumer demand for beauty, personal care and wellness products, which Nykaa said was already showing early signs of recovery.

“We remain cautiously optimistic and believe the season will be good and hope for strong demand,” Nykaa CEO and general manager Falguni Nayar said in a post-profit call after the last quarter she defined as a “muffled season”.

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Nayar had said in May that inflationary pressures had begun to mount in the first quarter, but noted that higher food and fuel prices are not deterring the company’s high-end shoppers.

Gross trade value (GMV) rose 47 percent to 21.56 billion rupees in the quarter ended June. GMV of the fashion industry was up 59 percent, while that of the beauty and personal care business was up 39 percent.

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Sales increased by 40.6 percent to 11.48 billion rupees.

The company made a strong market debut in November 2021, earning the nation’s first female-led unicorn a valuation of nearly $14 billion.

The TGP-backed company, which dominates the domestic online beauty and personal care space with nearly 30 percent market share, is making acquisitions and recently ventured into the menswear and athleisure category with a new brand.

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Nykaa parent company FSN E-Commerce Ventures Ltd posted a 33.2 percent increase in quarterly consolidated net profit at rupees 45.5 million ($574,582.01).

($1 = 79.1880 Indian Rupees)

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