Fsn E-Commerce Ventures Ltd Investor and Analyst Day Conference Call Insights

Key highlights from Fsn E-Commerce Ventures Ltd (NYKAA) Investor and Analyst Day Concall

Q&A Highlights:

• Brinda Iyer asked that on fashion, if the company’s comment of achieving 10% of online fashion market share by FY25 is an aspiration or guidance. Adwaita Nair Co-Founder said it not guidance. The point to explain was to have a meaningfully sized business in fashion. It’s the size of the market and opportunity, which is between 5-6x the size of beauty.

• Brinda Iyer enquired, by when does NYKAA see 3-4 billion GMV possibility being crossed by it on super stores. Vikas Gupta CEO Distribution & International said it’s not the target but the addressable market the company has in the first phase. It’s a part of that 3-4 billion that NYKAA hopes to get over a period of time.

• Brinda Iyer asked about GMV share between beauty and personal care over the next 3-5 years vs. currently. Anchit Nayar CEO, Beauty and E-commerce replied that NYKAA sees beauty customer also as personal care customers. And the frequency of buying personal care items is much higher than beauty items. NYKAA sees this as an additive and a way to increase the frequency with which the existing customers are interacting, engaging and transacting in the platform.

• Brinda Iyer enquired what’s the physical presence now and how many EBO stores is NYKAA thinking of in the next 3 years. Adwaita Nayar Co-Founder said today there is one store. Over the next month or two, a couple of more stores can be seen. NYKAA is experimenting with a couple of different formats in terms of size and merchandising mix. Right now it’s a bit early to say of the number.

• Brinda Iyer enquired about international brands and import brands. Adwaita Nayar Co-Founder clarified that International are the ones that existed in India but global in nature. Import are the brands that are not in India but NYKAA’s import team is pitching the brand and bringing them into the country.

• Brinda Iyer asked about the total deliveries to order ratio in BPC and percentage of total air shipment to total deliveries percentage. Arvind Agarwal CFO replied that in an ideal situation, order to shipment ratio should not be more than 1.1 or 1.15. Anchit Nayar CEO Beauty added that NYKAA will always have some degree of split shipment.

• Brinda Iyer asked if NYKAA is facing any inflationary headwinds on raw materials, packaging etc. and if it’s passed on with price increase. Arvind Agarwal CFO said inflationary pressure on the input cost is more relevant for brand play where NYKAA is manufacturer which is about 10%. So the input cost coming out of inflation for this business is marginal on the P&L as a whole.

• Brinda Iyer asked about NykaaMan. Falguni Nayar EC said NykaaMan is a platform that is a combination of personal care products. The reason for less emphasis on NykaaMan is because NYKAA is behind from a cataloging and technology perspective. Currently, there is not much to share.

• Brinda Iyer enquired that how has the inventory trended in the BPC business. Arvind Agarwal CFO said NYKAA has increased its inventory levels quite meaningfully. The reason for this was to secure inventory in an environment where supply chain disruptions are hard to predict and also due to NYKAA regionalizing its supply chain.

• Brinda Iyer asked that on fashion, at what GMV scale can NYKAA expect marketing spends to normalize to BPC levels and the drivers to achieve those GMV volumes, AOV or both. Falguni Nayar EC said it needs a good mix of repeat customers vs. new customer to be able to be at a healthy market spend. For fashion, NYKAA will increase the marketing spend from current levels over the next year or so.

• Brinda Iyer asked if NYKAA has exclusivity with the international fashion brands launched in its platform and for how long. Adwaita Nayar Co-Founder replied that it’s a mix with some brands. There is no blanket exclusivity across the whole international strategy, it’s on a case by case basis.