Elle Mentors

4 steps to build a successful business, by Nykaa's Falguni Nayar

You need more than a great idea to create a viable business

Until four years ago, Falguni Nayar was still trying to figure out the right foundation for her skin tone, and would be baffled if you brought up primers. But today, the former managing director of Kotak Mahindra Capital Company heads multi-brand beauty e-tailer Nykaa.com and can dish out tips for thicker brows while explaining to you why Indian women are stocking up on false lashes. She learnt everything she knows about beauty on the job, but it was the 19 years as investment banker and stockbroker that helped her read data, spot trends and find a winning formula.

Her decisions are already showing impressive results. In just four years, Nykaa has brought in 1.5 million customers and an annual turnover of Rs 250 crore by creating instant access to 450 mass, prestige and luxury Indian and international brands across categories like make-up, skincare, hair care, fragrance and wellness. This includes an in-house line of cosmetics and body care products launched to fill the gaps in the market. So they have on-trend nail polishes and lipsticks, as well as quality shower gels, body mists and lotions. Nayar’s strategy is simple: “We only push genuine products that will last you in the long run—it has to be something we believe in.”

Here’s what Nykaa's Falguni Nayar learnt on her bumpy ride to success:

Gain your customer’s trust 

“Besides curating a great product offering, we strongly focus on building customer trust. We make sure that we always deliver on our promises and work very hard to offer genuine products. This has allowed us to launch our Nykaa private label collection because the customer knows that our products are high-performing and well-priced.”

Focus on building a community 

“Just by observing the industry as a consumer, I realised that education is an important part of selling premium beauty. A consumer is more likely to buy something if they have understood its benefits, ingredients etc. So from the beginning, Nykaa decided to focus on delivering this information through creative content. We went against popular belief and put content all over the site to build value for the customer. It’s something that helped in the long run because now we know we can keep a customer engaged even if they visit our site multiple times before purchasing anything.”

Be smart about your money

“I believe that the amount of spends, whether on marketing or business building should be in line with the size of the market. A lot of Indian start-ups tend to spend much more than what it justifies. For example, Uber created a new market by using new technologies. They succeeded because they could judge the underlying demand and need for their product. Many start-ups don’t do that; they create great products however their marketing spends commensurate with that cost of business development and that’s too high compared to the market size."

Remember, you’re not the first one facing this problem

“[During tough situations] I look very hard for comparisons, case studies and go deep into reading and researching that subject. I also discuss my thoughts with the colleagues and mentors whose views I trust. Based on those inputs, I make the right decision.”