Fashion business, margins are Nykaa’s weak spots even as beauty drives growth

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Subscribe to enjoy similar stories. In its December quarter (Q3FY25) update, Nykaa's parent company, FSN E-Commerce Ventures Ltd said that its beauty and personal care (BPC) segment remains the key growth driver, while muted demand in its fashion business continues to weigh on overall momentum. Nykaa expects Q3 consolidated net revenue growth to exceed the mid-20s year-on-year, up from 24% in Q2.

This growth is driven by sustained momentum in the BPC segment across its e-commerce platform, retail stores, owned brands, and eB2B distribution. Nykaa projects BPC revenue growth to remain above the mid-20s, aligning with its strategy to outpace the online BPC market’s compound annual growth rate (CAGR) of 19-20%. Read this | Can Nykaa’s house-of-brands strategy be its next growth driver? BPC gross merchandise value (GMV) is set to rise by over 30% year-on-year in Q3.

The eB2B arm, Superstore by Nykaa, now contributes 8% to the vertical's GMV, up from 7% a year ago. The platform's retailer base has expanded to 260,000 transacting partners, up from 235,000 in Q2. Spanning 1,100 cities, this growth highlights Nykaa's deepening reach into tier-2 and tier-3 markets.

The fashion segment, however, continues to face challenges, with the festival season falling short of expectations. Q3FY25 fashion net revenue growth is projected at around 20%, while net sales value (NSV) is expected to remain in the low-to-mid teens, consistent with Q2. Nykaa attributes the subdued performance to weaker online fashion demand, a trend impacting the broader e-commerce sector.