Nykaa E-Commerce Ventures Ltd Eyes Strong Growth, Despite Subdued Online Fashion Demand
Bangalore, Dec [Current Year] - FSN e-Commerce Ventures Ltd., parent company of online and physical fashion retailer Nykaa, reported its December quarter business update late on Sunday evening. The update revealed a promising outlook for the retailer's growth prospects, with net revenue expectations exceeding mid-twenties despite ongoing subdued demand for online fashion.
Despite slower-than-expected online shopping trends, FSN E-commerce Ventures Ltd is confident about the long-term potential of Nykaa. This optimism stems from a trend where the company's Gross Merchandise Value (GMV) growth converges with net revenue growth, indicating a positive shift in the GMV to net revenue ratio.
The beauty division of Nykaa has witnessed accelerated growth compared to earlier quarters, with predicted net revenue growth exceeding mid-twenties. The GMV growth for this division is projected to be around 30%, reflecting strong momentum across multiple channels - including e-commerce platform, retail stores, owned brands, and B2B distribution.
"The Superstore by Nykaa" - a business arm specializing in B2B distribution - now contributes around 8% to the GMV of its beauty divisions. With the base now expanded to around 26 lakh (263,000) transacting retailers across more 1,100 cities, this division is expected to play an increasingly vital role in driving Nykaa's growth.
Focusing on the fashion division, Nykaa is likely to see net revenue growth projected at approximately 20%. However, Net Sales Value (NSV) growth projections hint at an ongoing, moderate pace of growth in income derived from content and service offerings.
The share price performance of Nykaa shares ended up 1.8% higher on Friday with a closing value of ₹168.25 apiece, reversing the losses incurred over the past month - having seen a significant downturn to stand at around 5%. Despite recent volatility, growth forecasts have reinvigorated expectations among investors regarding this growth-oriented entity in the Indian e-commerce industry.