Nykaa records increase in marketing spends to Rs 994 cr in FY2025: Report

Beauty and fashion retailer Nykaa is expected to upgrade its technology, including AI and increase marketing spends to expand its customer base.

Falguni Nayar, Executive Chairperson, Managing Director & CEO of Nykaa, in the company's annual report, noted the omnichannel retailer made several strategic investments in innovation, technology and customer experience in FY2025 to 'shape the next phase of growth'.

Nayar in the annual report mentioned, "AI, personalisation and virtual try-ons have been some of the crucial drivers of growth for the company". The company also expanded its advertising efforts and influencer network to support customer acquisition and boost net revenue, as well as EBITDA.

Nykaa’s total advertising and marketing expenditure increased by 34.5% to Rs 994.82 crore in FY2025. Marketing spend rose to 12.5% of revenue, compared to 11.6% in the previous financial year. P Ganesh, Chief Financial Officer of Nykaa, said, "We increased our marketing investments in FY2025 to focus on long-term category creation and customer acquisition. Key initiatives like Nykaaland and Nykaawali Shaadi aimed to boost brand equity, resulting in marketing expenses rising to 12.5% of revenue." These efforts helped the company add over nine million new customers in FY2025, taking its total customer base to over 42 million, a 28% year-on-year rise.

Nykaa identified India’s Gen Z demographic and Tier-II markets as key contributors to its growth. "Although Gen Z accounts for 26% of the population, they are expected to influence nearly 50% of all spending by FY2030," Nayar stated.

Anchit Nayar, Managing Director & CEO of Nykaa E-Retail, on geographical expansion, highlighted the company's expansion in Tier-II and III cities. "We have significantly expanded our retail footprint, going from 63 stores in 34 cities in FY2020 to 237 stores in 79 cities in FY2025," Anchit said. Nykaa's Superstore, an initiative launched in 2021 to tap into the unorganised beauty market, achieved Rs 941 crore GMV in FY25, accounting for 8% of the company's overall beauty GMV (Gross Merchandise Value). "Our transacting retailer base grew 15x to 2.76 lakhs as of March 31, 2025," Ganesh added.

Anchit Nayar emphasized that Nykaa’s strategy focuses on both increasing customer reach and offering more premium products.

"With the dual effects of penetration and premiumisation, we aim to grow our GMV to mid 20% levels by FY2030 by acquiring more customers, enhancing our premium offering and expanding our physical store footprint to over 500 outlets in more than 100 cities," he added.

In FY2025, Nykaa reported a profit after tax of Rs 72 crore, an 81% increase compared to the previous year. Net revenue rose to Rs 7,950 crore, while EBITDA increased by 37% to Rs 474 crore. Capital expenditure during the year stood at Rs 128 crore, up 11% year-on-year, driven by investments in store expansion and technology upgrades.