Rising Star: Nykaa Fashion’s Adwaita Nayar wants to transform the fashion landscape

The CEO of Nykaa Fashion is steaming ahead with plans to acquire brands and grow the business in a sustainable and profitable manner

The Established shines a light on younger talent in India that is slowly but steadily making a mark in the world of business. Every month, in our ‘Rising Star series,’ The Established will highlight entrepreneurial journeys that are just beginning to bloom. We will feature entrepreneurs who have taken risks, are full of passion and drive and want to change the world.

A millennial-forward business, Nykaa has changed the retail landscape for the Indian beauty shopper and is now determined to do the same with the fashion business. At 31, Adwaita Nayar is co-founder of Nykaa and CEO of its fashion vertical. A graduate of Harvard Business School, Nayar is in the process of scaling up the fashion vertical after having worked with Nykaa from its genesis.

Her mother, Falguni Nayar, credits Adwaita with being part of the Nykaa story. “You cannot separate Adwaita from Nykaa. She’s a very integral part of the success at Nykaa,” she told Barkha Dutt in an Nayar has proven her chops many times over by working in almost all the aspects of the business, while also innovating to pivot the company’s beauty business into also retailing essentials during the lockdowns. She now is intent on growing another part of the company that now sits at 25 per cent of Nykaa’s consolidated turnover. We got down to talking to Nayar about her work plans and life after the company’s Initial Public Offering (IPO) last year. Edited excerpts from the interview.

With the consolidation that is going on currently in the fashion business, do you think it signals an end for indie brands?

The one thing I love about fashion is that it's less brand-centric. As long as an emerging brand has a great sense of style and design, [customers are] willing to give the brands a chance. I think the role of fashion, then, is that you can make sure you're curating the most interesting brands that are emerging both from within the country and globally. I think you then have a very curated point of view, and that makes sense. Despite this consolidation, the emergence of many new brands will continue.

How many brands does Nykaa Fashion have at the moment? What are your plans for its expansion?

It’s a multi-brand platform; we have 1,500 brands that currently retail with us. These include more niche, interesting, emerging labels from all parts of India and the world.

We have been travelling the world and bringing some of the best brands [to Nykaa Fashion]. Whether it's a Swedish brand or a bunch of Turkish or American brands, I'm very surprised with how quickly the Indian consumer identifies, ‘Oh that's an interesting brand, that's unique fashion’.

We also have our own brand strategy, and we have eight [of our own] brands. We have a curation called ‘Hidden Gems,’ where we travel the length and breadth of the country and bring the most interesting, emerging brands to the forefront. This has picked up in a massive way on the platform. It’s one of our key differentiators. Low-key designers were trying to build their own brands and now it's being done in a very affordable, accessible way that's gaining a lot of traction.

Tell us more about ‘Hidden Gems’?

We started it almost six to nine months ago [when] we realised that a lot of talented designers across the country are trying to start their own labels out of smaller set-ups. The question then was, how could we bring attention and focus to those labels? Because sometimes, on big websites, they get lost.

To be a ‘hidden gem,’ you need to be a homegrown designer label or brand that is very focused on design, aesthetic and quality. Typically, they also tend to be more sustainable and more responsible.

We have about 100 brands [under Hidden Gems] and find that customers really appreciate this curation. Our labels include Nuhh, Baise Gaba, Gulabo Jaipur, Kapraaha Alter Ego, and Maati by Neha Kabra from north India; from western India we present Label Shaurya Sandhya, Dhaaga Handicrafts London Rag, TISSR, and Fuchsia by Aashka Mehta; talents from the southern states include Bhavya Ramesh, All About June, Ewoke, Odette and House of Three; and the east comes to life via Label Nitika and Zohra.

Do you view yourself as an employee or an entrepreneur?

I jumped into Nykaa in the early days, both in terms of my own career and in terms of the Nykaa journey. The Nykaa experience has been incredibly entrepreneurial. I've been building it alongside my mother and now, more recently, my brother [Anchit] has also gotten involved. Nykaa is for us, as we always joke, like a family member. It's always been the third child in the family that we've all been pouring our heart and soul into for ten years now. It definitely does not feel like a regular job; it feels like an entrepreneurial journey.

Did you continue working with Nykaa while you were studying at Harvard?

I went to Harvard Business School always knowing that I would come back. [While at HBS] I was often doing work for the company. I was most definitely thinking about the applications of what to bring back to the company in classes, during networking sessions.

How did you manage that? Isn’t B-School really hard?

Nykaa has always just been such a focused area for us that every class I was sitting in, I would think ‘How does this apply to Nykaa?’ Every professor I met, I [took] advice from [about the business]. I spent my summer at Amazon learning how to run an e-commerce company, to understand the best practices. I was never inclined to do anything but this.

What's the most important lesson you’ve brought from the beauty vertical to the fashion segment?

Fundamentally, the discipline I learned while looking at the beauty business–which, in a large part, comes from my mother–is the importance of building a sustainable, profitable business. Through those early years, really watching how deliberately we crafted every line of the PnL statements to make sure that it makes sense and was on the path to profitability–that's something I brought into fashion from day one.

Secondly, is the conviction that despite people claiming that India is a discount-driven, price-sensitive market, there's always going to be an opportunity to premiumise it. The beauty experience gave me confidence that the same story could be told through fashion.

Do you miss dealing with beauty?

It's not that I like one category over the other. You can't predict what's going to sell in fashion whereas with beauty the same things sell well for years. Operationally, fashion is a lot more challenging, and, of course, you are dealing with a lot more competition.

Is technology the best way to scale an e-commerce business?

Technology is a huge enabler. We are a retail- and consumer-first business but enabled by technology. Every aspect of our company is powered by technology, whether it's the apps that you interface with, or the fulfillment steps, the logistics, the customer service and finance. Technology seeps into every inch.

There are two things here: The first is hiring ahead of what you need, and making sure that you have the right teams in place to hire for the next level of scale. My biggest learning is being able to see that this team may not be able to take us there. Technology allows you to do a huge number of things at scale and volume without being manually dependent.

How do you view fashion when you're consuming it and how do you switch the hat as a person who is driving the industry?

Over the years, I have developed a strong understanding of what our consumers are looking for. [Through] meeting consumers, I've been able to understand their behaviour. Data has also been one of our teachers. Most of the time when I'm looking at the Nykaa app, it's through the lens of what I think the consumer wants. I don't think I'm coming from the lens of what I want in particular.

Our teams are full of our consumers. For me, then, the benchmark is if every woman sitting in this office is addicted to the Nykaa fashion app, then I know that we've built something good.

Do you have plans to get into the brick-and-mortar space?

We have one store and there are plans to open more. We are still trying to figure out what exactly the positioning is going to be. I'm a big believer in the offline model in general, as it does a lot for the brand and can also make a lot of sense from the PnL aspect. I believe that both online and offline retail feed into each other.

Online [retail] is obviously a trend that is on the upswing and online penetration will only keep increasing. We have to remember that for most of these categories under beauty and fashion, offline retail is still anywhere between 75 to 90 per cent of the market share, depending on the category and the level of premiumness. We have a long way to go before the offline model becomes irrelevant. We are in a sweet spot because we have online tools and we are also willing to go offline.

Any key takeaways from the lockdown and the pandemic?

The pandemic was a time where some of our best work happened because it really forced us to be innovative. I remember going through the various rules on when e-commerce could start functioning again, and just how rapidly we could adapt our websites and apps to address that. That really struck me, because when push comes to shove, teams can come together and make things happen very rapidly. It pushed us into being very fungible with our inventory both offline and online, which was a positive change.

What is your leadership style?

I spend a lot of time investing in my team and enabling them. A large part of what motivates me is having my teams stay motivated, challenged and excited about what they do. I define it as leading with equal measure: of a strong mind and a soft heart. Empathy is a big part of leadership and bringing that degree of understanding, mentorship and caring for people is my style.

What advice would you give a budding entrepreneur?

You have to be incredibly thick-skinned. Entrepreneurship is an insanely long journey. I remember during the early days of Nykaa, my mom would compare it to a marathon. As we're entering our tenth year, I really understand that it's taken a decade to do this. And it's going to take another ten years to do justice to some of our new businesses and new ideas. If you're going to give decades of your life to something being thick-skinned, not letting the lows get to you, not letting the rejections or downturns affect you so that you can really be strong both for yourself or your teams, is important.

How is it working with your mom? Is she a key motivating factor in your life?

Absolutely, we are really close in many different ways. She's got an amazing management and leadership style. She has always trusted me and given me a lot of leeway to run things. Trusting your children, trusting people on your teams to run with things, avoiding micromanagement, and giving them a sense of ownership and responsibility is probably one of the most incredible things she's done. I’ve learned a lot of tactical things from her. One of our biggest assets is that she’s a phenomenal risk-taker. The way she can spot an opportunity, and say this is a measured risk and that we should do it, is something that I would love to emulate.

Where does fashion sit in the Nykaa universe?

We just published our results [for the quarter and financial year ended March 31, 2022 in May 2022], and it’s an [approx] ₹1800 crore business at GMV (gross merchandising value).

We started three years ago and its GMV grew 168 per cent year-over-year (YoY) to ₹ 17,516 million in FY2022 and grew 84 per cent YoY to ₹ 4,827 million in Q4. It's 25 per cent of the consolidated company's turnover. In terms of where it sits, I would like to think of ourselves running four businesses: Beauty, Fashion, Man, which is one of our newer initiatives and the B2B business.

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