As part of its strategy to expand internationally, beauty and fashion e-commerce giant Nykaa has established a wholly-owned subsidiary in Saudi Arabia, named Nysaa Trading LLC.
In͏͏ an͏͏ exchange͏͏ filing͏͏ today͏͏ (September͏͏ 20),͏͏ the͏͏ company͏͏ announced͏͏ that͏͏ Nysaa͏͏ Trading͏͏ LLC͏͏ is͏͏ a͏͏ wholly͏͏ owned͏͏ subsidiary͏͏ of͏͏ Nessa͏͏ International͏͏ Holdings,͏͏ which͏͏ is͏͏ a͏͏ step-down͏͏ subsidiary͏͏ of͏͏ Nykaa’s͏͏ parent,͏͏ FSN͏͏ E-commerce͏͏ Ventures.
Diverse͏͏ Product͏͏ Offering:
The͏͏ newly͏͏ incorporated͏͏ subsidiary͏͏ will͏͏ sell͏͏ beauty͏͏ and͏͏ personal͏͏ care͏͏ (BPC)͏͏ products͏͏ in͏͏ both͏͏ international͏͏ and͏͏ domestic͏͏ markets͏͏ through͏͏ online͏͏ and͏͏ offline͏͏ channels.͏͏ This͏͏ range͏͏ will͏͏ include͏͏ cosmetics,͏͏ toiletries,͏͏ beauty͏͏ and͏͏ hair͏͏ care͏͏ products,͏͏ perfumes,͏͏ and͏͏ beauty͏͏ soaps.
Ownership͏͏ and͏͏ Investment͏͏ Details:
Nysaa͏͏ Trading͏͏ LLC͏͏ has͏͏ been͏͏ established͏͏ with͏͏ a͏͏ subscribed͏͏ share͏͏ capital͏͏ of͏͏ 3͏͏ lakh͏͏ Saudi͏͏ Riyals͏͏ (approximately͏͏ INR͏͏ 6.67͏͏ crore).͏͏ Nessa͏͏ International͏͏ will͏͏ own͏͏ a͏͏ 100%͏͏ stake͏͏ in͏͏ Nysaa͏͏ Trading,͏͏ while͏͏ Nykaa’s͏͏ parent͏͏ company͏͏ will͏͏ indirectly͏͏ hold͏͏ a͏͏ 55%͏͏ stake.
However,͏͏ the͏͏ newly͏͏ incorporated͏͏ Nykaa͏͏ subsidiary͏͏ has͏͏ not͏͏ yet͏͏ begun͏͏ business͏͏ operations.
Growing͏͏ Middle͏͏ East͏͏ Presence:
This͏͏ development͏͏ coincides͏͏ with͏͏ Nykaa’s͏͏ efforts͏͏ to͏͏ strengthen͏͏ its͏͏ presence͏͏ in͏͏ the͏͏ Middle͏͏ East.͏͏ In͏͏ July͏͏ of͏͏ this͏͏ year,͏͏ the͏͏ company͏͏ established͏͏ a͏͏ wholly͏͏ owned͏͏ subsidiary͏͏ in͏͏ Qatar,͏͏ named͏͏ Nysaa͏͏ Cosmetics͏͏ Trading.
Continue͏͏ Exploring:͏͏ Nykaa expands͏͏ Middle͏͏ Eastern͏͏ presence͏͏ with͏͏ new͏͏ Qatar͏͏ subsidiary
Earlier͏͏ this͏͏ year,͏͏ Nykaa͏͏ launched͏͏ its͏͏ first͏͏ physical͏͏ store͏͏ under͏͏ the͏͏ Nysaa͏͏ brand͏͏ in͏͏ Dubai,͏͏ marking͏͏ its͏͏ entry͏͏ into͏͏ the͏͏ international͏͏ market.͏͏ The͏͏ company,͏͏ led͏͏ by͏͏ Falguni͏͏ Nayar,͏͏ plans͏͏ to͏͏ invest͏͏ $4.4͏͏ million͏͏ in͏͏ Nysaa.
Notably,͏͏ in͏͏ 2022,͏͏ Nykaa͏͏ partnered͏͏ with͏͏ Apparel͏͏ Group,͏͏ one͏͏ of͏͏ the͏͏ largest͏͏ omnichannel͏͏ retailers͏͏ in͏͏ the͏͏ UAE,͏͏ to͏͏ enter͏͏ the͏͏ Gulf͏͏ Cooperation͏͏ Council͏͏ (GCC)͏͏ region.
Nykaa͏͏ plans͏͏ to͏͏ open͏͏ 70͏͏ stores͏͏ in͏͏ the͏͏ GCC͏͏ market͏͏ under͏͏ the͏͏ Nysaa͏͏ brand͏͏ over͏͏ the͏͏ next͏͏ five͏͏ years.͏͏ The͏͏ company͏͏ aims͏͏ to͏͏ capture͏͏ a͏͏ 7%͏͏ share͏͏ of͏͏ the͏͏ GCC͏͏ beauty͏͏ market͏͏ during͏͏ this͏͏ time,͏͏ as͏͏ stated͏͏ during͏͏ its͏͏ ‘Annual͏͏ Investor͏͏ Day’.
Nykaa’s͏͏ focus͏͏ on͏͏ the͏͏ GCC͏͏ beauty͏͏ market͏͏ is͏͏ well-founded,͏͏ as͏͏ the͏͏ region͏͏ boasts͏͏ a͏͏ remarkable͏͏ per͏͏ capita͏͏ spending͏͏ of͏͏ $500͏͏ on͏͏ beauty͏͏ and͏͏ personal͏͏ care͏͏ products,͏͏ making͏͏ it͏͏ one͏͏ of͏͏ the͏͏ highest͏͏ globally.
In͏͏ India,͏͏ Nykaa͏͏ has͏͏ enhanced͏͏ its͏͏ same-day͏͏ and͏͏ next-day͏͏ delivery͏͏ services.͏͏ During͏͏ the͏͏ company’s͏͏ 12th͏͏ annual͏͏ general͏͏ meeting,͏͏ Chairman͏͏ and͏͏ CEO͏͏ Falguni͏͏ Nayar͏͏ announced͏͏ that͏͏ 60%͏͏ of͏͏ orders͏͏ are͏͏ now͏͏ delivered͏͏ the͏͏ next͏͏ day͏͏ in͏͏ the͏͏ top͏͏ 110͏͏ cities,͏͏ which͏͏ represent͏͏ two-thirds͏͏ of͏͏ the͏͏ company’s͏͏ overall͏͏ order͏͏ volumes.
Continue͏͏ Exploring:͏͏ Nykaa accelerates͏͏ same-day͏͏ and͏͏ next-day͏͏ deliveries,͏͏ achieves͏͏ 60%͏͏ fulfillment͏͏ rate͏͏ in͏͏ 110͏͏ cities
However,͏͏ earlier͏͏ this͏͏ month,͏͏ Kotak͏͏ Institutional͏͏ Equities͏͏ downgraded͏͏ Nykaa͏͏ from͏͏ ‘add’͏͏ to͏͏ ‘sell’͏͏ and͏͏ reduced͏͏ its͏͏ fair͏͏ value͏͏ estimate͏͏ from͏͏ INR͏͏ 195͏͏ to͏͏ INR͏͏ 190.͏͏ This͏͏ indicates͏͏ a͏͏ potential͏͏ downside͏͏ of͏͏ over͏͏ 5%͏͏ from͏͏ the͏͏ stock’s͏͏ previous͏͏ close.
Stock͏͏ Performance͏͏ Update:
Shares͏͏ of͏͏ Nykaa͏͏ were͏͏ trading͏͏ 1.22%͏͏ higher͏͏ at͏͏ INR͏͏ 203.50͏͏ each͏͏ on͏͏ the͏͏ BSE͏͏ today͏͏ at͏͏ 1:35͏͏ PM.
Nykaa͏͏ operates͏͏ in͏͏ India’s͏͏ rapidly͏͏ expanding͏͏ beauty͏͏ and͏͏ personal͏͏ care͏͏ market,͏͏ which͏͏ is͏͏ projected͏͏ to͏͏ exceed͏͏ $28͏͏ billion͏͏ by͏͏ 2030,͏͏ representing͏͏ 7%͏͏ of͏͏ the͏͏ overall͏͏ e-commerce͏͏ market.
