Customer feedback is the secret sauce for a successful startup, says Nykaa CEO at Hindustan Times Leadership Summit 2022
Hindustan Times Leadership Summit 2022: Nykaa, which has always been active on social media, interacts with its customers online, making a note of what they expect from the beauty retailer.
Nykaa gets most of its research ideas on new brands that it wants to bring on board and segments it needs to enter from its customers, Falguni Nayar, founder and chief executive officer (CEO) of the beauty, wellness and fashion company said, adding that the firm benefited from its early adoption of social media.
“Our secret sauce comes from our customers. They write to us and we are very open; we listen to our customers. And honestly, all our ideas come from them,” Nayar said at the 20th Hindustan Times Leadership Summit
Nykaa, which has always been active on social media, interacts with its customers online, making a note of what they expect from the beauty retailer. When it initially announced that it was launching a store in Bareilly, the company was surprised by the number of suggestions its customers offered on social media, on the various towns that it could enter, or later, on the various brands that it ought to procure, she said. That set the tone for how the company utilised consumer feedback for decision-making.
Currently, about 60% of Nykaa’s demand comes from non-metro cities. “They (women) feel empowered and confident with what Nykaa offers them. That has been my big motivation,” Nayar said in a conversation with Mint’s editor-in-chief Sruthijith KK.
Nayar started Nykaa in 2012. The company today offers over 5,500 brands across beauty and fashion, with about a billion site visits every month. When the startup debuted on the stock market last year, it was valued at over $13 billion. Its current market capitalisation is a little over $6.6 billion.
Nayar said not having a background in retail helped her as she did not follow the conventions of the industry, such as retailing luxury brands only in a luxury environment.
“Many (people) tell me that since you were not from the beauty industry, you broke all the rules, and you didn’t take any constraints for granted,” she said. “We didn’t carry the baggage of how beauty had to be done.”
Nayar, who was previously managing director of Kotak Investment Banking, started Nykaa in a small, scrappy office space of less than 1,000 sq ft in an industrial area in Mumbai. “In spite of having a very comfortable home and previous offices, I wanted the startup office to be really ‘startup-like’, because that’s when the startup culture comes in,” she said. “That’s when the culture of frugality comes in.”
Here, Nayar – a finance professional – faced a new set of challenges, from getting the technology right to the proof of concept. “I was very naive to think that I can do tech on my own. I was not even in the tech ecosystem,” she said.
She met with people in the industry, learning from them about beauty, retail and technology. “I have to admit that entrepreneurial journeys are not easy, especially early days are characterised by a lot of pain points,” Nayar said.
During her time as an investment banker at Kotak, she helped entrepreneurs such as Harsh Mariwala, co-founder of consumer goods company Marico, Adi Godrej, chairperson of Godrej Group, and Ronnie Screwvala, founder of media company UTV, in roadshows before their initial public offerings.
“I had seen these entrepreneurs, as they portrayed their visions. There were so many people who didn’t believe in (them), but they eventually created that,” said Nayar.
These experiences inspired her too. “I had seen a lot of entrepreneurs pursue their vision and dreams, and create an enterprise that was extremely successful and created a value proposition for customers in the country. And I particularly wanted to come up with a similar such journey,” she said.
Going forward, Nykaa will focus on wellness products and athleisure fashion through content-led commerce. “We already retail those on our website. But we believe in content-led commerce and we need to do more with education and consumer advice,” she said.
While her near term goal is to grow the company in India, in the next decade, she wants Nykaa and its brands to be globally recognisable. “We want to build a consumer company out of India that is recognised globally,” Nayar said.