Nykaa Competitor Purplle Is The Latest Unicorn After A $33 Million Fundraise
Purplle, a cosmetics eCommerce startup that competes with Falguni Nayar’s Nykaa, has raised $33 million in funding and is now valued at over a billion dollars. Purplle has now been designated as India’s 102nd unicorn.
Paramark Ventures joined the unicorn round with current investors Premji Invest, Blume Ventures, and Kedaara Capital. It was estimated to be worth $1.1 billion.
The funds will be used to fund acquisitions and the company’s inorganic expansion objectives.
“With technical investments, expansion of our private brands, and industry-first innovations, the infusion will help us continue our aim of growing the beauty business in India,” Manish Taneja, co-founder and CEO of Purplle, said.
As of June 9, its competitor Nykaa had a market capitalisation of 68,377 crore ($8.7 million).
Purplle is an eCommerce portal that sells beauty products, appliances, and cosmetics. It was founded in 2011 by Manish Taneja and Rahul Dash.
In October 2021, the business raised $140 million at a valuation of $500 million, according to reports. It intended to use the funds to improve its technological stack, incubate new entrepreneurs, and acquire smaller businesses.
The startup raised $38 million in January, led by Sequoia Capital. The Series D investment was led by Blume Ventures and Sangeeta Pendruka, the CEO of Pantaloons, which is owned by Aditya Birla Fashion and Retail Limited (ABFRL).
Purplle’s most recent fundraising round was revealed just two days after PhysicsWallah became the first profitable educational technology to join the unicorn club. At a valuation of $1.1 billion, the firm has raised $100 million in a Series A round from Westbridge and GSV Ventures.
Nykaa is a cosmetics retailer that sells products both online and in stores. Product evaluations, beauty how-to videos, expert-written articles, and even an e-beauty magazine are all available through the company. Nykaa’s customer care line is meant to assist consumers in selecting products and services that are specific to their needs. The goods offered by this beauty company are purchased directly from the manufacturers, ensuring authenticity. They are available for delivery!
The company presently sends its items throughout the Indian subcontinent and Nepal and will soon begin shipping worldwide to many nations!
How Did Nykaa Get Started?
Falguni Nayar, the company’s founder, was inspired by the anomalies she saw in the beauty product market. Despite major market demand, India’s beauty and cosmetics market did not match the extent of the products as it did in other countries like France and Japan. Furthermore, the products were determined to be unavailable in a number of locations around the country, prompting the development of Nykaa.
Falguni Nayar founded Nykaa in the year 2012. It started as an internet company before evolving into an omnichannel strategy.
Nykaa, based in Mumbai, is known for its extensive range of beauty and cosmetics products and fashion and intimate wear, which it sells through its website, app, and online storefronts. One of the brand’s key goals is to make ordinary ladies remarkable in every way.
Nykaa – Founder And Team
Falguni Nayar founded Nykaa, and it is now one of India’s largest lifestyle and fashion portals. Nayar graduated from IIM Ahmedabad with a master’s degree in finance. Soon after graduation, she joined Kotak Mahindra Capital Company, India’s leading investment bank. In 2005, Nayar was named Managing Director of the bank’s same division. She worked for the bank for 18 years before resigning to pursue her business goal of Nykaa.com full-time.
Nayar is known as a founding member of the Asia Society in India. She is a member of a number of boards, including the Aviva Insurance Board, Dabur India, and the Tata Motors Board as an Independent Member. Falguni is an example to everyone in Nykaa and beyond because she is both a successful entrepreneur and a responsible homemaker. Falguni’s dedication to her company, attention to detail, and involvement in all aspects of the company have all contributed to her success as a leader. She has set a great example for the rest of the globe regarding entrepreneurship, proving that “age is just a number.”
Throughout her career, Falguni has received numerous awards, including the FICCI Ladies Organization award for the best female achiever in banking and the Business Today award, which named her one of the top 25 women in business.
“Retail is all about detail” is one of Falguni Nayar’s most recognised mantras, and she is frequently heard preaching it.
The Mission and Vision of Nykaa
Nykaa’s mission is founded on three key principles: curation, information, and personalisation. The organisation is dedicated to providing the greatest service to its customers to assist them in making the best decision for their holistic beauty needs.
Nykaa – Name, Tagline and Logo
The name ‘Nykaa’ comes from the Sanskrit word ‘nayaka,’ which means ‘one in the spotlight.’
‘Your Beauty, Our Passion’ is the company’s tagline. Nykaa and Peanut Butter formed cooperation, which resulted in the creation of a new slogan, ‘Beauty Anytime, Anywhere.’
The logo colour was chosen with consideration since the brand caters to women, and the colours red and pink ideally depict the imperfections and brightness of a modern female.
Nykaa – Business Model
Nykaa is a direct-to-consumer (D2C) consumer items eCommerce firm with an inventory-based business model. The firm buys its products directly from producers and stores them in specified warehouses in New Delhi, Mumbai, and Bangalore. These items are available for purchase on Nykaa’s website or in one of the company’s three offline retail formats: Nykaa Luxe, Nykaa On Trend, and Nykaa Kiosks.
The company’s inventory-led business model has helped it achieve significant profit margins and has resulted in a lucrative operation. In addition, the organisation assures product authenticity and maintains competitive prices.
Nykaa – Revenue Model
Nykaa’s revenue is generated in the following ways.
Sale of products
The principal source of revenue for the brand is the sale of its own items and the products of its linked businesses.
The company’s banner adverts assist it in attracting a large amount of traffic, many of which convert into sales.
Discount, commission and miscellaneous income are some of the brand’s other revenue streams.
Nykaa – Funding And Investors
Nykaa’s market capitalisation surpassed $13 billion in its blockbuster launch on Indian stock exchanges. The well-known Indian cosmetics platform stocks began trading at an 82 per cent premium and have since risen to roughly 96 per cent. The overall amount of money is estimated to be roughly $341.9 million.
Nykaa – IPO
Nykaa’s first IPO took place on October 28, 2021, and it was more than simply an IPO; it was an actual test for a modern Indian e-commerce firm. In just three days, it drew 82X subscribers. Nykaa stock received offers worth $32.53 billion. Nykaa’s stock is trading at a nearly 80% premium to its peers. Nykaa’s shares were launched on the BSE at Rs 2001, a premium of 77.87 per cent over the issue price of Rs 1125.
On the other hand, the scrip was launched on the NSE at Rs 2018 at a premium of 79.38 per cent. From October 28 until November 1, 2021, Nykaa shares were available for purchase. Ashneer Grover was embroiled in a controversy after an unpleasant phone chat with a Kotak Mahindra bank staffer, according to the Nykaa listing. Both the ex-Founder of BharatPe and BharatPe was implicated in a massive sham.
Nykaa – Challenges
Nykaa faces multiple professional players as a latecomer to the cosmetics business. Ajio and Myntra are two of the most prominent players in Nykaa’s sector. It needs to have a unique selling proposition in the fashion industry.
Kannan Sitaram, a Venture Partner at Fireside Venture, has claimed that one of Nykaa’s biggest problems is keeping shoppers interested since they will be unhappy if it fails to give an excellent experience.
L’Oréal, a French cosmetics company, launched a civil complaint against Nykaa in November 2019 at the Delhi District Court, saying that Nykaa had infringed copyright. The complaint against Nykaa arose from a likeness that the French cosmetics giant discovered in part of Nykaa’s packaging, which was identical to the Maybelline brand.
The court battle appeared to be dragging on, so both parties agreed to call it off and reach an agreement, which the Delhi District and High Courts authorised. L’Oréal has decided on the new, amended artwork that Nykaa has prepared as part of the new settlement terms.
Nykaa – Acquisitions
To date, Nykaa has purchased five firms with great success. On April 22, 2022, the company purchased New Delhi-based Nudge Wellness. On the same day, it paid $5.45 million for Kica and an 18.5 per cent ownership in Earth Rhythm, a beauty business. On October 22, 2021, it purchased Dot & Key, a Kolkata-based skincare firm.
Nykaa – Growth
Nykaa currently boasts of having over 17 million monthly active users and processes 1.5+ mn orders. Take a look at some more growth highlights of the brand as of October 2021:
The company claims to have over 15 million registered users.
It has 105 stores across India.
It has 23 warehouses across 11 Indian cities
The company boasts of offering over 4000 brands.
Nykaa is packed with over 3.1 million SKUs that can be accessed from its website, app, or stores.
During the lockdown due to the advent of the coronavirus pandemic, Nykaa had a 70 per cent drop in sales in April 2020. On the other hand, the corporation reacted quickly, effectively listing all necessary items to keep them in stock and removing all non-deliverable inventories. Following that, the company began to promote its physical locations by utilising the facility of its hyperlocal delivery.
Nykaa recovered quickly from the COVD-19 pandemic’s effects, and by the end of 2020, it had already recovered by more than 90% of what it had been during the pandemic’s outbreak.
The unicorn cosmetics and beauty products firm has seen a major shift in consumer preferences into key categories like personal skin and hair care products. This has helped it grow faster than its competitors during the coronavirus outbreak. Furthermore, the company’s transition from an online to an omnichannel retail model had a role in this. This not only improved customers’ perceptions of the brand but enabled Nykaa to reach audiences it had previously been unable to reach.
As soon as the corporation began to recover from the pandemic’s impacts in October 2020, it established Nykd, an intimate apparel brand.
Nykaa’s revenue from operations increased by 55 per cent to Rs 3773.9 crore in FY22, according to the company’s figures. The gross merchandise value (GMV) grew to Rs 6933.2 crore, up 71 per cent. Nykaa’s total number of unique transacting consumers increased by 64% to 1.02 crore.
According to the FY22 figures, you should know some important points concerning Nykaa’s growth. Here are the stats for Nykaa’s growth in each segment:
Beauty and Personal Care Segment
This category accounted for 72.1 per cent of Nykaa’s total revenue, which increased by 49 per cent year over year to Rs 4998.7 crore. The following are some of the highlights of this segment’s growth:
- The number of online visits for this vertical grew by 34%to become 88 crore.
- The Nykaa app downloads increased by 44% to become 4.73 crore
- Total orders grew by 58% to become 2.7 crore
The fashion vertical contributed 25.3% to the total Nykaa GMV, growing from 16.1% in the previous year:
The fashion vertical’s GMV shot up by 168% to become Rs 1751 crore in FY22
The annual unique transacting customers in this segment grew by 182% to 18 lakh in FY22
Total orders doubled from 24 lakh to 52 lakh during FY22 and AOV increased by 25% to become Rs 3240
Nykaa’s physical stores increased by 43 per cent to 105 in FY22, up from 73 in FY21. Nykaa has also expanded its footprint in India by 11 locations, bringing the total number of places Nykaa is present to 49 in FY22.
Nykaa – Future Plans
The corporation intends to grow its offline operations. It plans to open 180 outlets across India by 2024 to enhance its offline presence. Nykaa is looking to expand its distribution centres across the country to improve customer service. It intends to increase its warehousing capacity by 40%.
Purplle is the owner of an online beauty shopping site that allows customers to shop for skincare products.
It’s an online store that sells a wide range of cosmetics, skincare, haircare, and perfumes. It features some of the top products from the world’s most prestigious companies at the most competitive prices. Purplle cosmetics seeks to elevate the user’s buying experience by allowing them to have a tailored shopping experience that considers their skin and hair. They have an excellent customer service department, which can be reached by calling their customer service hotline.
Purplle.com has over 650 brands, 50,000 SKUs, and 300 beauty-specific sellers, so there’s something for everyone. Purplle provides merchants with full warehouse and logistical services, ensuring product quality and timely delivery.
Purplle also collaborates with over 6,000 salons, which provide detailed pricing information on the site to assist customers in selecting the best treatment.
Purplle’s website is organised into three key categories. The first is the Beauty Product Marketplace, which features makeup, skincare, and hair care products. The Salon Booking Marketplace is the second, where they post and take bookings for salons and spas in your area. The third is Purplle Salons, a chain of Premium Economy Salons that aims to provide consumers with a positive salon experience.
Purplle – Industry
Personal care and cosmetics have seen a lot of growth in India, according to Purplle – Industry. This can be attributed to India’s better quality of life, which resulted in the sector’s predicted growth of 9.7% between 2018 and 2023 before the epidemic. However, after the coronavirus pandemic, this growth has halted significantly.
Between 2019 and 2020, the industry grew at a pace of 2.3 per cent, helping the industry reach a market value of little over $15 billion in December 2020. The growth prediction for 2020-2021 is 1.7 per cent. It is predicted to improve starting in 2022 when revenues are expected to climb by +2.8 per cent.
Purplle – Founders and Team
Manish Taneja, Rahul Dash, and Suyash Katyayani created Purplle in 2012.
Purplle – Startup Story
Purplle Cosmetics’ foundation might be defined as a clear business decision to enter the beauty market. In contrast to the furniture and home décor industry, the beauty, personal care, and cosmetics industry does not allow for considerable customisation.
However, most buyers are already familiar with horizontal markets when it comes to purchasing electronics, footwear, furniture, and apparel online. They prefer to shop on eCommerce platforms like Amazon and Flipkart.
The founding trio was ready to start a firm, but they couldn’t decide between furniture and fashion for a time. While furniture required a bigger initial investment, fashion was a market where firms like Myntra and Jabong got off to a fast start and quickly established themselves as competent. Purplle began in this manner.
Purplle began as an online shop in December 2011, and in January 2017, it opened its first physical retail store in Mumbai’s Phoenix Market City Kurla.
The company represents over 600 Indian and foreign brands selling skincare, makeup, haircare, body care, and beauty tools. It features some of the top products from the world’s most prestigious businesses. Purplle aspires to improve the purchasing experience of its users.
Purplle – Mission and Vision
According to Purplle’s mission statement, “Purplle is a website that caters to your beauty and wellbeing requirements. We include some top items from the world’s most well-known brands. Its goal is to elevate your purchasing experience to a whole new level. We all know that shopping gives you a rush like no other.”
As an online store, the company’s objective is to become one of the most well-known brands in the cosmetics and beauty business.
Purplle – Name, Tagline, and Logo
Purple is used in the Purplle logo to represent the name and taste of modern women. Women and girls worldwide enjoy the brand because it provides cosmetics, fragrances, skin, and hair care items at the cheapest possible costs.
Purplle has chosen India’s #1 Beauty Destination as its tagline.
Purplle – Business Model
Purplle Cosmetics began as a direct-to-consumer (D2C) beauty products shop in 2011, with an eCommerce website and app. Like other market leaders like Flipkart, Amazon, Nykaa, and others, the company has entered the private label space. Purplle entered the private label market by acquiring StayQuirky, an in-house brand created in 2015.
Purplle – Revenue Model
Purplle is a direct-to-consumer (D2C) beauty and cosmetics eCommerce brand that makes money mostly from product commissions and marketplace fees. Furthermore, adverts on its app and website account for a significant portion of its earnings.
Purplle – Growth and Revenue
Except during the days of the pandemic, when things went completely nuts for a few months, Purplle’s last two years had been fantastic. Purplle is increasing at an annual rate of roughly 80%, according to October 2021.
In addition, the company announced that in FY22, it would increase its annualised gross merchandising volume to $180 million.
The following are some of the company’s other growth highlights:
- The net sales of Purplle clock around Rs 65 crore a month.
- Purplle has 7 million monthly active users who sell 60,000+ products from over 1,000 brands on its website and app.
- The company has witnessed around 90% growth year on year.
Purplle’s operating revenue increased from 91.4 crore in FY20 to 128.2 crore in FY21. Purplle’s revenue increased by 40.2 per cent in FY21, while the company’s EBITDA margins worsened from -19.80 per cent to -31.37 per cent. The company’s yearly losses grew by 114%, from Rs 24.4 crore in FY20 to Rs 52.2 crore in FY21.
Purplle – ESOPs
Purplle increased the amount of its ESOP pool to $40 million as of May 13, 2022. According to the company’s regulatory filings with the Registrar of Companies, the Purplle board of directors has approved the expansion of its existing ESOP pool to comprise 6,806 ESOP options, each of which will be converted into equity shares. Purplle joins the ranks of other Indian enterprises such as Pine Labs, Ather Energy, Ecom Express, Ninjacart, LEAP, and others with this extension of the ESOP pool.
Purplle – Acquisitions
Purplle purchased FACES CANADA on December 18, 2021. This is the Mumbai-based beauty products marketplace’s first significant acquisition. Following the acquisition, the latter will be left to function on its own and develop its portfolio.
Purplle – Competitors
The top competitors of Purplle today are:
- Lusso Liv
- SUGAR Cosmetics
- Make Up Shades
Purplle – Challenges Faced
Manish noted that when Purplle first launched in 2011, just a few firms in the country targeted the online arena for cosmetics and beauty products. The number of beauty retailers was far lower than it is now, and B2B transactions were limited to salons. Purplle was founded by the co-founders with roughly Rs 40 lakhs in personal savings, according to the co-founders.
Purplle – Future Plans
The company thinks that social media will encourage India’s middle class to invest more in beauty products and millennials’ purchasing power. With AI on the market, the company claims that it won’t be long until e-commerce platforms become key sources of people’s cosmetic items.
NYKAA VS PURPLLE- WHERE TO TURN FOR ALL YOUR MAKEUP AND BEAUTY NEEDS!
It’s become a must to have the right cosmetic kit for all of your beauty demands. You can engage in sanitary cosmetic procedures and skincare basics because you can boost your confidence with those stunning looks. With its dominating social media presence, the convenience of receiving essential products at one’s doorstep, and simple payment options, the makeup industry has taken over the world. Nowadays, the online sale of cosmetics is widespread, and many organisations have established or are attempting to establish themselves in this marketing sphere.
Nykaa.com and Purplle.com are two popular online beauty sites founded in 2012 and 2011, respectively, and are fierce competitors. Both companies have established themselves as market leaders, catering to people’s aesthetic and health needs by providing high-quality products at affordable costs.
Nykaa vs Purplle
Both firms have partnerships with well-known brands like Lakme, L’Oreal, Mac, and Ayurveda brands like Kama Ayurveda and Biotique, which provide a diverse range of products ranging from skincare to haircare to healthcare. Regarding brand availability, Purplle and Nykaa fill each other’s gaps, as many brands are available on Nykaa but not on Purple and vice versa. Both have their own product lines, but, Nykaa, because of its international reputation, has many more product options than Purplle.
Both websites have a user-friendly layout that allows customers to restrict their searches by category, brand name, price bar, discount, relevancy, and other factors for a more accurate and timely result. Nykaa and Purplle’s cosmetic lessons are a terrific approach to teaching beginners how to apply makeup and develop solid customer relationships.
Purplle’s beauty assistant feature is a virtual assistant that assists clients in making product choices based on a few questionnaires.
Both Nykaa and Purplle offer a variety of safe and secure payment options for users’ convenience, ranging from cash on delivery (COD) to debit and credit cards, net banking, e-wallets, and more. Nykaa’s discounts are far more usable and friendlier than those supplied by Purplle. Nykaa concentrates on ‘buy one, get one free’ or ’50 per cent off’ deals, whereas Purplle offers free movie tickets across all product categories.
Even though both companies have a strong presence in the market and are on the verge of developing further, the best can only be determined by popular vote and revenue numbers. According to a survey, Nykaa has more followers, and its other add-ons, like s a clothing line and Nykaa guy, have helped it establish a more substantial social media presence, allowing it to generate more revenue than Purplle.