Such was the frenzy to buy its limited stock on public offer that on the very first day, its astronomical price shot up further by 80% and its market value crossed ₹1 trillion, equalling storied old companies like Tate Steel.
Andy Kessler recently wrote about an electric air-taxi service to be launched in 2024 that is already valued more than Luftanasa, Easyjet or JetBlue.
Nykaa spends a lot on customer education through its ‘how to’ videos, social media and influencers.
It is not dissimilar to an old-fashioned sari-buying experience in Lucknow or Nasik, where the shopkeeper might indulge potential buyers by unwrapping dozens of expensive Kanjeevarams, Paithanis and chiffons, urging them to examine the spread even if there’s no sale at the end.
Rising expenditure on personal care and beauty parlours had shown up in national sample surveys as a prominent item long ago.
Nykaa will need to exert itself some more to sustain its first-mover advantage, but the market size is large enough to support growth for years.
As Harveen Ahluwalia of Morning Context writes, “Nykaa has a first mover advantage in beauty products, but everywhere else is a crowded marketplace with terrible economics.” A final major reason is luck: Being in the right place at the right time.