Nykaa Fashion needs a rejig; Here's why

Nykaa Fashion, a direct subsidiary of FSN E-commerce Ventures Ltd, saw three top-level exits in March—which the company dubbed as “standard annual appraisal and transition process”. The fashion vertical, launched in 2018, accounted for 30 per cent of Nykaa’s GMV and 14 per cent of net sales in Q3FY23, but Ebitda losses in Nykaa Fashion stood at Rs 68.2 crore in FY22, and are estimated to be Rs 180-200 crore in FY23, per Elara Securities.  

Nykaa Fashion’s chief problems are poor recall and Nykaa’s inability to cross-sell its fashion products to the core beauty & personal care consumer base. As a result, it occupies less than 10 per cent share in India’s online fashion segment currently dominated by Myntra, which has a share of 50-55 per cent. “Nykaa is a late entrant in the fashion segment. It is a heavily women-skewed marketplace, and with the presence of Myntra and AJIO, it has been a challenge... The product line, assortments, and strategy of Nykaa Fashion needs a rejig for it to become a significant player,” says Karan Taurani, SVP at Elara Securities.