Fsn E-Commerce Ventures Ltd (NSE: NYKAA) Q3 2025 Earnings Call dated Feb. 10, 2025
Corporate Participants:
Falguni Nayar — Executive Chairperson, Managing Director and Chief Executive Officer
Anchit Nayar — Executive Director
Adwaita Nayar — Executive Director and Chief Executive Officer, Nykaa Fashion
Vishal Gupta — Chief Executive Officer, Nykaa Distribution
Abhijeet Dabas — Executive Vice President and Business Head for Fashion eCommerce
P Ganesh — Chief Financial Officer
Analysts:
Unidentified Participant
Sheela Rathi — Analyst
Sachin Dixit — Analyst
Harit Kapoor — Analyst
Sachin Salgaonkar — Analyst
Vijit Jain — Analyst
Siddhartha Bera — Analyst
Presentation:
Operator
Hi good evening everyone this is Yashishri from Chorus Call. Welcome to FSN E-commerce Ventures Limited Q3 FY ’25 Earnings Call. From the management at Nykaa, we have Ms Falguni Nair, Executive Chairperson, MD and CEO; Mr Anchit Nair, Executive Director and CEO of Beauty; Ms Adveita Nayer, Executive Director, CEO, Nyka Fashion; and Head of Owned Brands; Mr Vishal Gupta, CEO, Nyka Distribution; Mr Abhijit Thabas, EVP, Nykafashion.com; Mr P. Ganesh, Chief Financial Officer.
Before we start, we would like to point out that some of the statements made in today’s call may be forward-looking in nature and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. Kindly note that this call is meant for investors and analysts only. By participating in this event, you can send to such recording, distribution and publication. All participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation from management concludes.
With that, over to you, Falguni ma’am for opening remarks.
Falguni Nayar — Executive Chairperson, Managing Director and Chief Executive Officer
Thank you. I think I’ll start with the performance highlights. Really, you know, welcome to all of the investors and shareholders and analysts. And really happy to say that we are delighted to have a pretty good growth momentum both at the GMV level where for the quarter, our GMV is at INR4,528 crores, which is 25% year-on-year growth. This is for consolidated one performance.
And from a revenue from operations perspective, we have witnessed INR2,267 INR267 crores in the quarter three, which is a 27% year-on-year growth. As you can see, the revenue from operation is growing faster than GMV and I think for the first time, we are seeing some reining in of the discounting that happens in the industry. I think from a gross profit perspective, it’s been a fantastic quarter with gross profit at INR991 crores, which is a 30% year-on-year increase. And the EBITDA has also come out at a pretty healthy level of INR140.8 crores, which is a 42% year-on-year growth. There has been an improvement in EBITDA margin as well as PAT margin with PAT coming out at INR26.4 crores for the quarter, which is a 51% year-on-year. So all-in all, excellent performance at with a strong momentum in most of its businesses as we’ll see as we move along.
In the beauty business, and I just want to remind all of you that this is the vertical definition of beauty and fashion that we now follow with a number of underlying businesses under those. So the beauty growth has come out at 30% year-on-year growth the — sorry, it’s a 32% year-on-year growth at INR3,389 crores. And this is — when you look at it from a year-on-year — I mean, Nine-Month perspective, it’s been a 30% year-on-year growth at INR8,716 crores. This was at the GMV level.
On the revenue also, the beauty growth has been strong at 27% year-on-year from a quarter three perspective, where the quarter three beauty net revenue has come out at INR2,060 crores. And on a nine-month perspective, also it’s been a healthy growth at 25% year-on-year growth and the number stands at INR5,356 crores. So strong performance across e-commerce, physical stores, owned brands and eB2B business.
From a fashion perspective, while the GMV growth for the quarter is at 8% year-on-year and the GMV number is INR1,130 crores for the quarter, it needs to be seen in light of generally a subdued fashion industry business for this quarter as well as for most of the year. On a Nine-Month basis, the fashion GMV has grown at 10% year-on-year and it now stands at INR2,767 crores. So from the revenue perspective, I mean, yes, while the overall growth in the GMV has been subdued, I think companies worked very hard-to-do a number of initiatives.
You can also see that our revenue growth has come out strong at 21% year-on-year and the revenue for the quarter is at INR199 crores. And for the nine months, this number is INR513 crores, which is again a strong 21% year-on-year growth. I think some of the stronger revenues in terms of both LBB, which is a business that’s a vertical is acquired as well as services business make-up for this growth in revenue and also the shrinkage of leakages between GMV to net revenue line-item.
Next, so at one-level, really happy to say that we now have a cumulative customer-base of about 40 million, which is a 29% year-on-year growth. In terms of the physical retail also, the expansion continues. We are today at 221 stores, largest beauty retail network in the country. And of these, about 12 stores were launched during the quarter.
We have focused a lot on quick delivery. I think we’ve been sharing with all of you that 70% of our beauty orders are delivered within the same or next day-in top 110 cities. And overall also, there has been huge improvement in order-to-delivery timelines for beauty business. The highest brands were launched in the beauty business this year as well as in fashion business. I think in the beauty business, if we talk about like we’ve seen some of the most accelerated brand launches at 200 numbers in beauty business and 217 fashion brands. But in beauty business, we saw some of the launches like NARS, GHD. All of you know that these are really big brands globally. So a lot of great global brands are choosing to come into India and launching with Nykaa. A story similar on fashion, where you’re aware that we earlier launched FootLocker and now this quarter, we’ve also been able to launch Snitch as well as Victoria’s Secret more recently. Of course, it is after the quarter-end. But a lot of exciting brands have been launched on both the platforms.
And finally, on the content-led education, we continue to do a lot. You’re all aware that this quarter saw Nika Lan execution and we’ll talk more about it later as well as Nykaa Wali Shadi, which is Shadi, as all of you are aware, is a very big business in the country and Nykaa clearly wanted to be that go-to platform for all the Shadi’s and this was solidified through our Nykaa Wali Shadi where we have a four-part OTT programming series along with Tiger, which has been a huge success ranking as top-10 within the week of launch. So I think all of these properties have given us more than $1 billion-plus reach continuing our journey about educating and recruiting customers in the top funnel. All this has led to about 513 million consolidated GMV for our businesses for this quarter.
With that, I’ll move on to multi-beauty multi-brand retail where I request to take this forward.
Anchit Nayar — Executive Director
Yeah, great. Thank you. So I think as said, it’s been a very strong quarter for the beauty vertical as well. And you can see that the beauty vertical has delivered a 32% growth year-on-year and a GMV of INR3,389 crores. This is some of the highest-growth we’ve seen over the past several quarters, as you can see from the table above.
Next slide, please. A lot of the growth has been driven by a big investment which we’ve made over the past several quarters, something which we’ve discussed with the community as well around customer acquisition. And this is really bearing fruit now in terms of the financial performance of the beauty business. As you can see, our annual unique transacting customer count has grown by 26% year-over-year, which, which is the highest-growth in AUTC over the past six or seven quarters. And today, our AUTC for Q1 — Q3 FY ’25 stands at $14.8 million, the highest we’ve ever had.
As you know, Q3 is the festive season for the retail industry. And in light of that we do host our flagshiping Friday sale-in November. And this year as well, we hosted the sale towards the end of November, early December and the results were very strong. The sale delivered a growth of 36% year-over-year on GMV terms and we got over 86 million visits to the app across the 10-day period of the sale. Customer growth was strong at 55% and we had a very strong conversion in terms of order conversion at over 4%. So this is a fantastic opportunity for us to acquire customers and to do a lot of top-of-mind awareness building for the brand Nykaa as well.
In terms of the initiatives we took that were unique to the sale, there were some tech — tech developments. As you can see on the top-right, for the first time on the app, we were able to show the best price on PLPs. We also enabled Express checkout as well as personalized recommendation widgets so that we’re able to show the right and the relevant products to the relevant consumers. Off-platform, we did a lot of top-of-mind awareness building across outdoor advertising, print, Spotify and Zomato as well.
And I think all of this has led to a very strong performance on-sale, which is a good outcome for us as well as our brand partners and ultimately the consumers as well. Speaking about new launches, I think it goes without saying the continues to remain the partner of choice for global brands who are looking to enter the India market. As India continues to improve in terms of its importance to global brands as they look for growth for the coming years. We are seeing an influx of some of the best brands globally.
In this past quarter alone, we have launched, which is a hair-care brand owned by the L’Oreal Group. This was launched on and this has historically been a brand that’s been available only in salons and it has come to specialty retail platforms like for the first time. Next we also launched GHD. GHD is a hair-care brand again that was launched exclusively on our platform. And then finally, NARS and, again, a Derma cosmetics skincare brand, one of the best brands globally in this space, launched exclusively on this quarter as did NARS, which is in the color cosmetics space. Some other brands that have also launched include some Korean brands such as, and Axis Y as well as color premium color cosmetics brand Laura and Brand Y. So you’re seeing massive influx of brands and again choosing as the primary destination to enter the India market.
Talking a little bit about Nykaa Shadi, as you’ve seen in previous presentations, is very focused on creating proprietary IP that can help us to create a lot more awareness for beauty as a category in the country and leveraging content very effectively to achieve that goal. And this was no different. We believe that India has the second-largest wedding market in the world after China, and it’s almost $130 billion market. This is the second-largest consumption category after food and grocery and upper made and high-income households, which is a large part of our consumer base contributes to 50% of the total market. So for us, it was a — it was a — it was a no-brainer that we should make the connection between beauty and weddings.
It is — it is a very synergistic category and we wanted to cement our position as the go-to destination for — for beauty as it relates to the wedding season, which was also in Q3 of this year and parts of Q4. In terms of what we did, we actually created a OTT TV show that is that is now live on GeoCinema. It was produced by Zoy Aktar and her production company Tiger Telly and it featured four real brides who are getting married over the past several months and a behind the scenes look at what the wedding process means to them and the role that beauty plays. This show is now amongst the top-10 shows on — across all OTT platforms based on viewership and this is as per third-party sources.
The reach we’ve got on social itself has been over 250 million and we worked with 70 plus experts to create additional content around this — around the TV — around this OTT show which we created. And of course, for us, we believe strongly in the flywheel of content to commerce. So along with the content, we also drove a number of on-platform initiatives, including a sale event to capitalize on the reach and the awareness which we were driving through the Shadi show and that has resulted in a positive outcome in terms of commercial actionables and that is also something which we’re very happy about.
Moving on to the next line and this is just the trailer of the show and I encourage you all to watch this on GeoCinema when you get a chance beauty is this look today for me and it always will be now of anyone else. Beauty has a whole new definition it’s so many layers deep it comes from how you feel about yourself, how you project that and how the people around you make you feel I feel like when you meet the right person you just know that this is it I want to just grow old with him get. Yeah, I think just to add a few words about Nykaa Wali Shardi, again, as we always say, I think category creation is incredibly important in a very nascent beauty market like India and these are the kind of activities that go a long way. We had many brands, third-party brands as well participate as part of Nyka. And again, it reiterates that continues to be partner of choice, not just for its distribution and retail capabilities, but also importantly for its marketing capabilities, which we are quite uniquely positioned in Leg.
Coming to our — speaking a bit about our brick-and-mortar retail business, as you know, today we are, of course, the largest specialty beauty retailer, both online and offline with 221 stores, 47 of which were added this year and 12 have been added in Q3 FY ’25 alone. The contribution to our omnichannel beauty GMV from physical retail is at 9%, so that stayed constant over the past several quarters. And in terms of total retail space, today it’s at about 2.1 lakh square feet across 73 cities. In terms of the — for us, physical retail is also a great way to premiumize the beauty market. And today in 90, we have over 90 prestige beauty brands in our stores. Two-thirds of our stores GMV comes from prestige beauty brands. And as a result, we have, I would say, best-in-class productivity at about INR4,250 a square-foot on a monthly basis in terms of GMV.
Financial performance for the physical retail business, a strong GMV growth again at 34% year-over-year, so slightly higher than the overall beauty vertical. But I think most importantly, we’ve seen very healthy growth on same-store sales growth, like-for-like growth at 19%. And despite the investment we’re making behind retail, we continue to see a very — the network be profitable at the PAT level and on the right you’ll just see some images of the of the kind of stores which we’ve been opening over the past several quarters.
Next slide please. Again, just some more images of the stores we’ve opened in Q3 FY ’25. As I said, 12 new stores launched and importantly, also across three new cities. So, Mohali and Belgam are the three new cities where we have stores and these are some images of our stores. You can see very-high quality World-class execution in Tier-2, Tier-3 towns as well such as Laipur, Mohali and big focus for us in the past several quarters and something we’ve spoken about before is wants to continue to invest behind the premiumization of the beauty category. And as we see more consumers entering the world of prestige beauty as the Indian consumers tend to have better affordability in the coming years, we want to be well-positioned to take advantage of the growth of luxury beauty in India.
Currently, luxury beauty is very underpenetrated in India and we believe that physical retail is a great way to continue to drive penetration and growth of this segment of the overall BTC landscape. As a result, we have launched six flagship stores across India. These are large — large-format stores, 3,000 square feet plus and many more to come. Currently, they are in the major metros of Mumbai, Delhi and Bangalore, but you will see some more from us in the coming months.
In terms of the brand mix, you can see from the right-side, it’s a good mix of premium as well as luxury brands and we are offering our brands a lot more space to do the relevant storytelling. We are also focusing on services in our stores. So you’re seeing a lot more focus on gifting and experiences, skin consultations as well as makeovers in-store, which we call beauty services as well as leveraging AI and virtual tools better to help our consumers make better purchase decisions in-store.
And with that, I will hand the presentation over to Adwaita to take you through the beauty-owned brands.
Adwaita Nayar — Executive Director and Chief Executive Officer, Nykaa Fashion
So we’re excited about this opportunity we have to build a house of brands at. Till now, we’ve obviously been a strong retailer and we have now set our eyes on our ambition of being a very strong house of brands as well. So first to kick-off on the beauty side, our House of Brands portfolio now is as of Q3, INR468 crores of top-line. It has tripled in the last three years. And so we’re seeing great momentum here spread across about seven brands. On the right-hand side, you can see the channel split. So as of Q3 FY ’25, about 50% is from our own Nykaa online channels, 13% is from stores and then about 35% is spread across GTMT and other platforms, including other e-commerce platforms.
Moving on, I’ll now talk about three of our biggest brands. So the first is Nykaa Cosmetics. This is a cosmetics brand that we’ve been building over the last five to six years. We’ve just taken Rasha Thurani on as our ambassador, which is a move that we’re excited about given sort of the — she represents everything the brand represents, which is all about youthfulness and trend. This brand is now a top-five Cosmetics brand on the website. As of Q3, it has crossed over INR440 crores of GMV and from a run-rate perspective annualized. And we’ve also been focused on increasing the physical footprint of this brand. So it now is listed across 11,000 GTMT doors across 200 cities and is of course present in all the Niga stores as well.
Moving on. Another brand that we’re incredibly excited about is Dotten Key. This is an acquisition we did back-in 2021, and we’re happy to say that today it’s one of the largest skincare brands in the country. It is as of Q3, an annualized GMV run-rate of INR900 crores. So it has grown absolutely exponentially. And on the right-hand side, you can just get a taste of what this exponential growth has been. So in FY ’22 and Q3, it was INR35 crore brand, which is approximately around the time when we acquired it. And now in the quarter that we’re just wrapping up, it’s over INR500 crores and this is at an NSV level from an annualized run-rate perspective.
So obviously, like massive acceleration, 15 times in three years. From the perspective of how much we paid-for it, we do believe that it was a good deal. Back-in 2021, we acquired 51% for INR97 crores and just recently we completed another 10 — another 40% or so for INR265 crores. And yeah. And so we’re feeling quite good about where this brand is, and we continue to be really focused on leaning into this brand along with Cosmetics in a big way going into next year-on.
The next brand we’ll talk about is K Beauty. So this is a brand that we started building four to five years ago. Again, it’s been growing extremely well. So again, you can see in Q3 of FY ’22, it was just about a INR100 crore brand and now it is crossing INR330 crores. So again, 4x growth in just a matter of a couple of years. This brand is actually one of the fastest-growing brands on the platform and we feel excited about having built this brand completely from scratch. And so we’re really honing our skills as brand builders within, obviously the larger ecosystem of.
All right, moving on. So that wraps up our beauty-owned brands section. Moving on to our fashion-owned brands and the brands that we’re building there. So you can see in Q3 of FY ’25, you know, we’ve delivered about INR120 crores of GMV. This is pretty flat from last year. It has been a year of just sort of focusing and consolidating our efforts on fashion. We had a handful more brands, but we’ve actually now decided to just focus on five and those five are listed here. We feel that the tail was not adding enough value and also obviously drawing attention and investment, whereas we feel that we want to just double down on what really are the big brands in our portfolio. And so you will see us being a lot more focused on our assortment going-forward.
And within these, of course, we’re extremely excited. Naked, Kika is our laundry and our leisure brand respectively, and we think those are absolutely incredible spaces to play in. And then 20 dresses, RSVP and Gaja Gang are our plays in Western and Indian wear. Again, a space that has a huge set of customers who like us for that category. So it’s a place that we obviously want to play. On the right-hand side, you can see how the shift of channels has actually changed. So in Q3 of FY ’25, the quarter that’s gone by, you can see that we’re now actually focusing more on our online — our own channel of distribution, which is the hot pink. And we’re sort of decelerating on selling in GT, MT, offline of basically non-NKA channels. We feel that fashion-own brands have to really be built on our own channels and not really go far and wide.
So obviously, like the channel strategy differs from category to category, but in fashion, we’re clear that we want to be more focused on the NIGA platforms. So with that, I’ll hand over — sorry, this is just a quick glimpse of again what our product sort of looks like. You guys have seen this in prior meetings. We are definitely remaining focused on being very trend-led and really meeting the customer where they’re at.
So with that, I’ll hand over to Vishal, who will walk us through our eB2B business.
Vishal Gupta — Chief Executive Officer, Nykaa Distribution
Hi, thanks, Advita. So dear friends, we had another great quarter on our path to profitable scale. You can see that we grew GMV by 53% and by delivering about INR260 crores, we now are at a run-rate of INR1,000 crore GMV. And you can see that it’s 12x growth in three years and lot of the growth is driven as we continue to drive scale and reach and we now breach 2 points — almost 6 lakh retailers and 1,100 cities. So we are national — we are deep in India, Tier-3, Tier-4 and very-high retailer base.
Next. And this really helps us to improve our profitability, where you can see that in gross margin alone, we have improved by almost 250 bps, which is driven a lot by ad income. So as we grow more scale and more retailer visits to our app, we get more ad income and consciously we are driving positive mix by selling higher-margin brands on our platform, which drives our gross margin. And with scale, obviously, our cost also come down. We had a few third-party warehouses in a few geographies. And as we got scale in those geographies, we moved away from 3P to our own warehouse, yeah, because that is more efficient and reduction in freight as we improve our order density, etc. Even the sales and distribution cost you see is coming down. Overall contribution margin improved by more than 500 bps. So I think we are well on our way to profitable scale and we will continue to keep scaling at till we reach profitability. Thanks.
Now I hand over to Abhijeet for fashion.
Abhijeet Dabas — Executive Vice President and Business Head for Fashion eCommerce
Yeah thank you. So on fashion, like Palguni ma’am mentioned a while ago, I think in the midst of a tough quarter in general for online fashion as a space, the business has been resilient. GMV has grown 8% as you can see on the left-side, reaching INR1,1130-odd crore. And more importantly, putting into perspective that fashion in the scheme of things for is still a young business. We only launched the business around six years ago. But. But in the last three years, we have seen still more than a 2x growth on GMV as well as on revenue.
On revenue, as you can see on the right-side of the slide, there has been a more healthy 21% year-on-year growth in revenue to close to INR200 crore and largely driven by strong traction seen on the content business of LBB through events such as Land and Nykaa Shadi as well as higher services related income. So overall, tough macro-environment, but still in the middle of that, we’ve been able to continue to grow.
Next slide. I think this just puts into perspective what Fashion as a platform brings to customers as well as to brands. So again, over the last three years, we have continuously augmented our assortment by adding relevant brands across categories. The number of brands that we now offer to customers is more than 4,000 and that’s a 3x increase over the last three years. Across all categories, there has been relevant brand additions throughout the last year itself. We spoke about Foot Locker when we gave the last quarterly update. But along with that, over the last quarter, we’ve continued to add further brands. We’ve added the likes of Tommy Hilfiger, Victoria’s Secret more recently Snitch in the men’s category.
And I think for customers, Fashion has established itself as a platform, which is curated, yet offers a complete assortment of all the relevant brands across all the categories and differentiated offerings from those brands. At the same time, for brand partners, we have continued to be the platform, which also brings great quality customers and allows selling fashion in the way that they would like to sell fashion and that reflects in many underlying indicators that we are able to further see in our P&L in the further slides.
Next slide. So just a glimpse of the kind of events that LVB has been able to execute over the last year. So just again to put in perspective, since acquisition a few years ago, LVB has scaled 9x in revenue. We spoke about Nykaa Wali, Shadi a bit earlier in the presentation today, but Nika Land and many other such campaigns which have been driven by LBB have delivered great value.
Next slide. Most importantly, in the midst of even a difficult year, while continuing to grow the business, I think the bottom-line has seen significant improvement through the year. We have seen a more than 700 basis-points improvement in gross margin, which is — which is a significant move from 44% last year, same quarter to 51% this year. And this is largely on the back of marketing and services income working with brands. Our fulfillment expenses have come down by close to 100 basis-points as we have optimized our route planning and become better at saving packaging costs.
Marketing expenses are higher on account of two things. Firstly, we have invested ahead of the curve in campaigns and events as well as in customer acquisition and this reflects in the middle of a tough quarter. We have still continued to acquire customers and just to share our visits and our unique visitors have both been at all-time highs in the last quarter and that augurs well for quarters going-forward because that just creates a base of customers, which will continue to serve us well as our retention and underlying metrics remain healthy.
All of that has resulted in still a contribution margin of 184 basis-points better year-on-year and also continuous improvement in EBITDA. So overall, while growth has been steady, we have made giant strides on-bottom line and that shows in this slide.
P Ganesh — Chief Financial Officer
Yeah. Thanks. Thanks, Abhijeet. So we’ll take a quick snapshot on the financial performance. As Falguni mentioned at the beginning of this call, our top-line and bottom-line both delivered a healthy growth this quarter. As we can see, revenue grew 27% Y-o-Y and has been in-line with the last three years CAGR. EBITDA growth was higher at 42% Y-o-Y in Q3, led by healthy gross profit growth, while we continue to invest in marketing to drive growth.
Moving on, what we see in this slide is a snapshot of our consolidated profit and loss account for quarter three as well as nine months FY ’25. As can be seen, gross profit grew 30% Y-o-Y, outpacing revenue growth of 27% during the quarter and similar trend has been seen in the nine-month period as well. Further, there has been an improvement across most of the cost line items and this is one of the factors which has led to a healthy EBITDA margin expansion of 69 basis-points during the quarter and 42 basis-points for the nine-month period.
Moving ahead, yeah. This is a quick snapshot of our vertical reporting. We have seen healthy improvement in gross margins across both beauty as well as fashion verticals and this has contributed to improved EBITDA margins in both the verticals. We’ll see the details of this in the next slide. Moving on? Yeah. Here you can actually see the snapshot in terms of the EBITDA expansion from 5.5% to 6.2%. And as you can see, this has been across both the verticals and across most of the cost elements as well as well as gross margins. You can see that leverage and fulfillment and employee expenses, that’s also driven expansion. The gross margins is something which has expanded and the leverage benefit in terms of other expenses is also starting to show through. So overall, overall, across multiple parameters, there has been efficiency kicking-in. So in-spite of the higher investments in marketing, which has also resulted in accelerated customer acquisition, in-spite of the higher investments we have seen in marketing, the overall — overall EBITDA margins have expanded.
Moving ahead? Sure. Yeah. Here as you can see, continues to focus on prudent capital utilization. Our balance sheet is seeing healthy improvement across key ratios. You can see that fixed — fixed assets turnover has reached 9.4%. Working capital days have been consistently reducing and have come down to 36 days and this has resulted in the ROCE of the overall one car business coming in at upwards of 10% and we need to — we need to bear in mind that the beauty business is highly profitable with a much higher ROCE percentage. And the beauty business is funding — funding the growth of the newer businesses, which is fashion and. So all-in all through internal accruals, we have been able to manage to fund the — fund the new businesses and still deliver a higher ROCE on a consistent basis. Yeah.
With that, with that, I’ll open the floor for Q&A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. If you’d like to ask a question, please click on the Ask a Question tab and separately you can type-in your questions in the text box provided. Before asking the question to the management, please introduce yourself providing your name and your organization name. If possible, you must switch on your video as well. Please limit yourself to maximum of two questions so we can accommodate as many as possible. Ladies and gentlemen, we will wait for a moment while the question queue assembles I now request Aditya Vikram to please accept the prompt on the screen Adity please turn-on your webcam unmute yourself introduce your organization name and go-ahead with your questions please?
Unidentified Participant
Hi, thank you very much for allowing to ask the question. So good numbers overall. But just a quick question. With Sheen coming in, what would be the impact on the fashion brand considering it seems like there would be very-high competition.
Falguni Nayar
I think I’ll just take the question and then I’ll pass it on to Abhijeet. I think we must understand that fashion is a very wide business with, you know, women’s Western wear, women’s Indian wear, men’s wear, sportswear as well as kids in whom and Sheen is only in one category. And I think one has to see that these are businesses with more than 2,700 — I mean 4,000 plus brands and more-and-more international brands also coming into the country with — we’ve always had REVOLVE and others. So I think it’s all — the market is very wide and no one brand can dominate it. So I think that’s what I do believe that it should not have a much of an impact. With that, I would like Abhijit to comment.
Abhijeet Dabas
Thanks, Falgun. So I’ll just add-on to that. I think our women’s, which is the category where a brand like Sheen typically plays is one of the fastest evolving. I think these are also categories which are style first and maybe not as much brand first as a category like sports, where you find very few brands for many years taking lion’s share of the business of that category. The reason is that trend changes very quickly, fashion changes very quickly. On our side, we’ve also seen a proliferation of what we call D2C brands come to the fore in specifically categories like women’s Westernwear.
So I think as a platform, we will continue to be at the forefront of bringing the best fashion to customers. The category will still continue to be very fragmented. And in saying that, there will still be a multitude of brands and again demand is very wide. The number of brands supplying that demand is also very wide. So I think it’s still a very large playing ground. So we don’t see such a massive impact.
Unidentified Participant
Thanks for that answer. Then a follow-up question. Your beauty business or the beauty line is clearly doing well. You have high gross margins and you are making good profit. It seems like the EBITDA as well as the bottom-line is not growing as fast, right, or it is growing fast in comparison to your Y-o-Y numbers. And this primarily looks like that most of the expense are going on the marketing side to grow the other business, right? When do you see normalized marketing expense or do you see marketing expense continue to go up as you ramp-up other businesses? And that would be all.
Falguni Nayar
Thank you. I think if I just wanted to highlight is that if you look at the beauty, marketing and ad expense, it’s come out at 10.1% for this quarter against 9.5% a year-ago. And this is for a beauty vertical and consists of all the businesses together. So yes, there is some additional marketing money being spent and we highlighted most of our — you know that as new customer acquisition has been at its fastest pace over last year and we think that is worthwhile investment to make.
And similarly, you know, we’ve done a lot of upper funnel, what you call is educating and bringing consumers interest into the category through events like Land and Nykaa Wali Shadi, many of those are also part of this spend. And we do believe that our marketing spend has been accelerated because we believe in the category, we believe in our domination of the category and want to continue to maintain that. But yes, I think it is something that can easily be controlled. It’s a — it’s a — it’s a marketing expenses considered a variable expense and totally controllable. So it’s more in-line with at — for that year what strategy we would like to follow.
With that, I’d also like to request Anshit if he wants to come in and add something to this.
Anchit Nayar
No, I think you covered most of it. Again, as we’ve said in the past few quarters, the beauty business is — has quite a healthy profitability, but because the penetration of the category and the per-capita consumption for the category is so low, there is a lot of category expansion work that needs to be done. And ultimately the benefit of that, the benefit of a larger TAM will accrue to us because ultimately, we are the largest player in this space. So we see it as an investment for the future and investment in customer acquisition is one of the larger buckets of our marketing expense and you’re seeing the benefits of that play-out, right?
The investment in customer acquisition in the past few quarters is — has been one of the major drivers to the growth — the revenue growth, which we’ve seen in the beauty business in this Q3 numbers. So our hypothesis seems to have been correct that you know there is — there is a lot of growth yet to be had and we continue to want that growth. So I think we’ll continue to invest in the beauty business. It’s a business that has the profitability to support its — to support its customer growth plans. And in terms of supporting other businesses within Nyka, as Ganesh said, we continue to fund all of our expansion in new businesses through the cash accruals of the beauty business. So that will continue.
But I think the good news is, as we said before, we believe that — and as you can see from our numbers, the losses in B2B are reducing significantly as that business starts to reach as it starts to mature a bit, it’s still a very, very young business and fashion as well. You’re seeing significant improvements in profitability despite there being subdued growth. So if I look at B2B, the numbers here are quite self-explanatory, but contribution margin grew more 500 basis-points. So we believe that trend will continue. So losses will reduce in B2B. And in fashion, I think as growth picks up once again for the overall fashion industry, you’ll see a lot of operating leverage in that business too. So we’re quite optimistic that will continue to fund growth for all of our businesses, new and old, but that the losses should be reducing even more from here for both fashion and B2B, which should — which should be good news for the overall profitability as well.
Vishal Gupta
Yes. So just to add to what Anchit mentioned, as we can see from the numbers, while given the — given the focus on new customer acquisition, et etc., there is higher investment in marketing. In-spite of that, the EBITDA margins for the beauty vertical has actually gone up.
Unidentified Participant
Thank you.
Operator
We’ll take our next question from Sheela Rathi from Morgan Stanley. Ms Sheila, can you please accept the prompt on your screen? Sheila please stand-on your webcam, unmute yourself and go-ahead with your question please.
Sheela Rathi
Yeah, thanks for taking my question. My first question was, you know, just to understand what is the revenue profile — revenue profile of LVB? I mean, wanted to understand, I believe it’s supporting the fashion revenues also and at the same time, it’s enabling marketing income for us, supporting the beauty business also. So just wanted to get more details about how LBB is driving the growth for us.
Falguni Nayar
I think LVB business when we acquired it about a year-ago was a content business that creates a content for a lot of — you know, a lot of brands, including non-beauty brands that they always had in their portfolio. And obviously, their skill-set lies in creating events and activities and content at-scale and that is what we are leveraging LBB for Nykaa Land, Nykaa Wali, Shadi, you know, we used to do Nykaa Femina Beauty Awards that has been now taken in-house. It’s called Nykaa Beauty Awards, which was again an in-house event. So acquisition of LBB has allowed us to do a lot of content and event activity all in-house. We’ve accelerated the number of events that we do, be it beauty bars or, be it we do a lot of fashion events where we take or it’s like a trunk show, which we take it to various events where customers come in and experience that.
We recently launched — did an event, which was called you the new at, which was new launches of the beauty private labels, obviously Foot Locker events. So many such events have all been done by the team and that is what this team has was in-sourced and obviously with the kind of focus that they get-in terms of accessing all of the beauty and fashion brand partners has led to acceleration in their ability to earn revenues and that is what is reflected in their numbers.
Sheela Rathi
So, what would be the revenue profile of today?
Falguni Nayar
Our profile is all event activity they charge clients for various event activity which is all costed event individual event-based on estimation of the costs.
Sheela Rathi
So this will get captured in the fashion revenues or does it get captured anywhere else?
Falguni Nayar
Shared in fashion revenues as well as they also have out-of-pocket expenses against those events. So they spend it. So it is obviously captured both on revenue as well as expense items.
Sheela Rathi
Understood. So just to understand the 21% revenues growth, which we have seen for fashion, what-if we ex-out LBD, how would be the fashion revenue growth for us?
Falguni Nayar
It’s very difficult for us to say because we also have had a huge improvement in GMV to NSE ratio by controlling or controlling what we call as leakages and it’s a combination. So revenue growth momentum has been higher than the GMV growth momentum. And what we disclose is a, you know, basically vertical level reporting and this is what the number is at the vertical level.
Sheela Rathi
Understood. And my second and final question is with respect to the gross margins for the Beauty business, I just want to understand how are the marketing income — how is marketing income doing for us on a year-on-year basis? And if there are any trends in terms of brands enabling more marketing spends in this quarter will be helpful. Thank you.
Falguni Nayar
Being this quarter, it has done well, but I’ll ask to answer it.
Anchit Nayar
Yeah, I think I think it’s — I think headline, it’s done well. There were a couple of quarters of softness in marketing as brands were deploying more of their A&P budgets towards promos versus advertising. I think it’s something we’ve discussed in the past as well, Sheila. But that trend has finally seems to be reversing and brands realize that they cannot — there is — there is significant brand awareness work to be done in a market — in a nascent market like India. So a lot of the money that was being deployed for promo is now being redeployed into advertising and that’s a benefit — that’s a plus for us.
So we’re optimistic. We’re seeing early shoots of it improving and we don’t think it’s a Q3 phenomenon. We think it should continue into coming quarters as well. Also, we at are also offering a lot more advertising opportunities for brand partners and something we’ve spoken about in the past is allowing brands to now advertise not only top of funnel in terms of on our homepage, but also allowing lower funnel advertising opportunities like PLAs and other such ad capabilities have been built and are now quite widely used by our brand partners. So that is also a net positive for the market — for the services income that we generate.
And finally, also, of course, we’ve created quite significant capabilities in terms of events and experiences and content creation, some of which we covered in terms of what LBB is contributing to our brand partners and that is also an additional revenue stream for us, which was not as monetized in the past that I think will be — will be a net positive in the future. So I think we’re quite optimistic. But again, you know, I think no one has a crystal ball, no one knows what’s going to happen with discounts in coming quarters. But at this point in time, it looks like things are improving and people are — brands are looking to invest a lot more into marketing than they have in the past few quarters.
Sheela Rathi
And sorry, just one follow-up here, Anshit. Will it be across-the-board or just the large brands or will it include the D2C brands also?
Anchit Nayar
You know you can’t paint all the D2C brands with one brush stroke, right? So even within that — even within D2C brands that are there different types. And so I think even the D2C brands, especially the ones that are doing well, continue to continue to want to reinforce that leadership position. A lot of the D2C brands want to break-out into the — into get that — get the velocity that they need to become a critical brand. And so they’re investing behind that. So yes, there are some D2C brands that are struggling and I think there is an opportunity for consolidation on that front and — but I think they’re not all the same. There are some which are doing really well and those continue to want to invest behind building brand because that’s ultimately what leads to sustainable revenue growth for them in the long-term.
Sheela Rathi
Thank you.
Operator
I now request Sachin Dixit from JM Financial to please accept the prompt on his screen. Sachin, please turn-on your webcam, unmute yourself and go-ahead with your questions, please.
Sachin Dixit
Yeah, hi. This is Sachin from JM. My first question is largely a comparison between what is happening for between BPC and fashion. Largely BPC is growing well. Fashion has been muted, while obviously it’s gaining market-share compared to other online fashion players but still muted. However, I mean, my understanding is the customer-base would roughly be similar strata in terms of income bracket and all. So how do you see the differentiated customer behavior on your two different platforms? Can you break-down that for us?
Falguni Nayar
I think we have always said that we have a more premium customer in fashion and we do not think that the fashion customer had issues about spending. I think I’ve repeatedly said that our fashion business is young, people forget that. It’s just a five-year-old business and we continue to do assortment expansion that makes the assortment more complete and that will allow us to grow the platform faster going-forward. So it’s a work-in process over the last two years. We’ve done a lot of focus on assortment building, completing certain L3 assortment that we used to not have in the past, bringing certain exciting brands onto our platform, which again we didn’t have in the past, like Libas was a new brand that came in last year.
Obviously, you know, Foot Lockers are very interesting. We’re seeing a lot of new D2C brands in fashion are coming up who are doing extremely well like the SoulStore pan project, Snitch, Fable Street Frickins, they’re all choosing to do business with Nyka. So I think there is a lot going on in such a wide-space. And we do — we do believe that we are one of the top three platforms of choice like Mintra, Agio are the three big platforms of choice. We are a very large platform and we remain in customer consideration. So I think we remain very positive about the business. I think some of the growth near-term got affected due to a marketing strategy that was followed, which was a little bit narrower. And I think some of those tend to be experiments in early days that need to be or that sometimes set you back by a quarter or so, but we don’t think this is a long-term issue.
Yes, it does have to be seen in the light of overall industry fashion industry not being at its strongest over last one year and it needs to be seen in that light. But I think it can’t be long-term issue. And we do believe that consumer is going to continue to spend basis on the base of certain exciting brands that we and we will be bringing into the country or exciting brands that will get created in the country that will be available on platform. I think with this, I would also like Adwaita to add if she’d like to add something.
Adwaita Nayar
No, I think — I think you’ve covered it.
Falguni Nayar
Okay, anything from you, Abhiji?
Abhijeet Dabas
Yeah maybe just one additional thing. I think it’s a huge strength for the Nika ecosystem to actually have beauty and fashion offered as you know, in a way complementary categories. And I think we are — given that fashion is a much newer business like has been mentioned several times, we are also incrementally getting better every year and every quarter at how to cross-leverage both categories and how to understand our customers better. So if anything, we have seen a lot of positive goodness because of that across both businesses and more fashion because it’s the newer business and we’ll continue to keep getting better at it. But — but yeah, that’s the only thing I will add.
Sachin Dixit
Understood. My second question would be a follow-up on the — on the part that Abjit mentioned, right, do you see a lot of cross-sell that is happening between the two platforms? Are you seeing — because I remember when at the time of IPOs, few quarters post-IPO, we did talk about that the fashion user base is slightly different to the beauty user base that we have on the platform. Are we seeing that change? Is there more cross-sell that we are seeing?
Falguni Nayar
I think we had given in the past that about 50% of our new customer acquisition has been part of Nykaa ecosystem earlier, but 50% is new to and the fact that fashion e-commerce was five times larger than BPC e-commerce made us believe that there would be customers who would be a fashion first, but over-time, beauty and fashion are lifestyle choices and customers tend to have overlap. So I think overall beauty consumption in the country is on the rise and many fashion first customers also are becoming beauty customers, Zoon. Customer acquisition is far accelerated in beauty Now and also in fashion to a certain extent, but lot more accelerated in beauty.
So finally, it’s the same kind of consumer, but they either approach through their fashion first outlook or their beauty first outlook and we benefit in either scenario. But we do believe in vertical commerce and you know the consumer’s choice and journey being very vertical oriented. But with today’s digital possibilities where everything is one click away that it — according to us, it’s not a deterrent. And in fact, having two separate vertical focus asset allows us to do more for both sets of customers.
Sachin Dixit
Yeah, which is fair. I was just asking on the 50% number that you mentioned, right? Have you seen that trend upwards or downwards?
Falguni Nayar
It’s gone now. I mean, we have a lot more cross of pollination going on through better digital frameworks and the number has slightly gone up.
Sachin Dixit
Sounds good. Thanks so much.
Anchit Nayar
Yeah. But just to add, I think it’s not something which we have done very aggressively, proactively. So that opportunity always remains. Cross-sell is one, but I think as was just mentioned, cross-pollination, so you getting existing beauty consumers on the app to download and to and to buy on the Fashion app that hasn’t been done at-scale, but that is something which we can always do. I think we’re just waiting to, as Abhijit said, continue to strengthen the assortment and then we’ll start to do a lot more work there.
Sachin Dixit
Got it. Thanks so much and all the best.
Operator
Thank you. I now request Harit Kapoor from Investec to please accept the prompt on the screen please turn-on your webcam unmute yourself and go-ahead with your questions please.
Harit Kapoor
Hi, good evening. Am I audible?
Operator
Yes. Please go-ahead.
Harit Kapoor
Yeah. So I just had two questions. One was on fashion. So this increase in the marketing spends, how do we read this? Do we read this as a you know increase in customer acquisition cost because you know the transacting customer and visits have been increased to that extent or is it just an accounting adjustment because LPB is in revenue as well as in expense? So just wanted a little bit of clarification on that.
Falguni Nayar
It’s a bit of both. So LBB has a higher percentage of marketing expense because that’s the only expense they have in their revenue and also there is certain small amount of adversity in customer acquisition cost for the fashion business.
Harit Kapoor
Got it. And the second was just two number related.
Falguni Nayar
And sorry, adversity was also for only one to two quarters and since corrected, so it’s a mixed number. Sorry, go-ahead.
Harit Kapoor
My second was on just two number-related questions. One was on working capital. Girish, do we expect that this reduction in working capital days is representative of full-year or do we see some adjustments happening at the end-of-the year, et-cetera?
P Ganesh
So directionally, as you would see over the last few quarters, the working capital days have been consistently coming down. So in that sense, in that sense, the reduction which seeing, you can take it as a percentage of an ongoing basis.
Harit Kapoor
And also just one last thing on the — on the margins. Is there anything to call-out in terms of Y-o-Y impact in GCC in terms of basis-points because I remember the same time last year, you had called it out, but if it’s not, is it relevant to call-out this time around?
P Ganesh
Are not specifically called it out this time because last year was the first time that had come in and it was not really there in the base, whereas now consistently four quarters, we have had GCC come into the base, although the current year — current quarter would be a little higher given that we have now opened the second store, et-cetera. But given that GCC is in the base, that’s the reason we are not calling it out anymore.
Falguni Nayar
I think on GCC, we remain quite optimistic about the market and the — the fact that it’s a high consumption market with a lot of opportunity to do profitable business. However, the rollout of the stores has been slower-than-expected and e-com rollout is also pending adoption of the technology stack over-time. So I think in that sense, in the GCC right now, the level of activity is not very-high to be needing to Call-IT out. But yes, there’s been some investment in GCC over last one year.
Harit Kapoor
Great. Thanks for taking my questions. Wish you all the best.
Falguni Nayar
Thank you.
Operator
Thank you. I now request Sachin Salgaonkar from Bank of America to please accept the prompt on a screen Sachin please turn-on your webcam, unmute yourself and go-ahead with your questions please.
Sachin Salgaonkar
Just couple of questions. One, Falgon is just wanted to understand how one should think about the steady-state EBITDA margin on the BPC business. The last few quarters, we have seen the margin hovering in the range of, let’s say, 7.5% at the low-end to 9% at the high-end. Are we actually at that level or do we see room to improve? And how far are we from a steady-state margin? That’s question number-one.
Falguni Nayar
I think the beauty EBITDA is a combination of beauty.com, which enjoys very good EBITDA number. There is a certain percentage now we have been disclosing that about 8% of the business comes from retail, which is also a profitable business for us, but lower profitability than.com. It is — it can be positively impacted by the profitability of the beauty private-label, which is on the uptick and we talked about it that we’ve seen a very good growth in our private-label business, both in terms of level of revenue and profitability improvements have happened or some profitability improvement and there could be more going-forward.
And lastly, it also is a combination of the weight of the superstore business, which tends to have a negative profitability. So I think we have given some idea of how each of those change every quarter. So we tend to report retail as percentage of omnichannel revenue every quarter and beauty-owned brand also, we are getting the — at least the GMV and you know-how it is changing every quarter. And finally, on the eB2B business, also similarly, I think some investors have been asking and we said that we can give — give the composition of the EB2B GMV as a percentage of our total Beauty GMV. And I think that has been reasonably constant over the last one year. So it’s not really breaking out-of-the waiting — zone. But yes, I think there is some amount of adverse effect on EBITDA margin coming from the investment that we make in B2B, EB2B business.
Sachin Salgaonkar
Got it. Clear on that.
Falguni Nayar
We have a positive momentum because we think that the EBITDA loss in EB2B will go down over-time.
Sachin Salgaonkar
Second question is on fashion. Clearly, we are seeing slowdown in the industry slightly at more on the prolonged basis versus the original expectations. And late, we are seeing some increase in marketing expense and plus sort of a sheen launch which directionally might keep at least in certain pockets competitive intensity high. Any general thoughts of breakeven in the fashion business potentially getting pushed back or you’re comfortable with a breakeven next year?
Falguni Nayar
We remain comfortable because if you look at it like if our marketing expense, which became adverse from 24.6% to 30.5%, if that had stayed under control, we could have possibility — possibility — possibly had EBITDA margin growth this quarter. So I think the main thing here to balance and that is what it is for all e-commerce businesses is to balance between growth and profitability and all customer acquisition costs us and typically the customer that you acquire breaks even on second or third order. So that’s the investment we make ahead of of becoming profitable on that customer. So I think we remain reasonably confident that as the ratio of new to repeat customer keeps improving in the fashion business, we should be in a better place.
So I think today, fashion business is where we have acquired about 6 million customers. I’m giving rough numbers of ever acquired, 6 million, 6.5 million, of which about 3 million are annual transacting users. So I think we continue to want to create a engagement level in fashion customers. And I think it — I’m a big believer that e-commerce is all about assortment first and we are really working very hard to continue to improve our assortment. And I think because fifth year of a business is not too long a life, but because most of it has happened during our publicly — being publicly-listed, there’s a lot of attention onto it.
But I think as a assortment keeps improving and we are really excited about what we’ve been able to do so-far and what lies ahead. And I think the long and short of it is the way the industry is emerging with so many players, such a large market. I think e-commerce has a role to play. So we remain confident and we will try to keep you working on marketing expenses and zone that we feel long-term comfortable?
Sachin Salgaonkar
Thanks. And last question, just wanted to understand directly on eB2B. How many cities do you further want to expand, i.e., how many more years could we see a further expansion in the EB2B business before it comes at a meaningful scale and the incremental investment should not be as high?
Falguni Nayar
I think we are not focusing from a city perspective level, I think the way we are looking at it is that we have a certain revenue growth target and certain amount of revenue growth happens through improvement in productivity of the existing network and some amount happens through investment in newer or geographies. It’s not — I don’t think we are covering all over the country. So I think the new geography is not like going to a totally new geography. I think like we only cover 1,100 city, which is very wide and like you saw last year, we increased by 250 cities. So I don’t think overnight is going to change to like covering 3,000 cities or anything like that. So I think we’ll keep adding to the coverage in a way that the overall unit economics of the business doesn’t get worse.
Sachin Salgaonkar
Very clear. Thank you.
Operator
Thank you. I now request Videisha from Ambic to please accept the prompt on a screen Videisha please accept the prompt on your screen Vidisha can you please unmute your since there is no response, I now request Vijit Jain from Citi to please accept the prompt on-screen Vijit please turn-on your webcam, unmute yourself and go-ahead with your question, please.
Vijit Jain
Hi, am I audible?
Operator
It is sounding muffled?
Vijit Jain
Yeah, okay. I’ll try and below. Good evening, everyone. My first question is, now you have had same day next day delivery for about a little more than two quarters, I believe now. Could you talk a little bit about what kind of customer behavior changes are you seeing in the cohorts where you’ve been able to deliver within that timeframe? Has it led to better retention metrics in a quantifiable way? And if you can talk a little bit about whether other metrics in the business like RTOs and returns and changes in those metrics are different meaningfully and when you and where you offer, LTD versus the existing OpEx? That’s my first question.
Falguni Nayar
Yeah, Anchit, would you like to take this?
Anchit Nayar
Yeah, sure. So I think look on — as we say for us, as for any e-commerce or any retail business, convenience is one of the three main pillars of really building a consumer value proposition. And we’ve always worked on improving our speed and that reflects in the fact that our O2D order-to-delivery timelines have reduced from over four days to less than two days over the past two, three years. And today, as we’ve said before, 70% plus of orders across 110 cities are sitting at same day or next day delivery. So our speed is getting a lot better. But it’s not a — we are doing this at the platform level. We’re doing this across the assortment and across a majority of our demand in terms of, as I said, top 100 intensities are now 70% LDV. So there is no real difference in the — in the KPIs for consumers who are receiving orders same day or next day versus those who for whom it is taking slightly longer, whether it be on average order value or anything like that.
So again it’s because we’re trying to solve for a try to solve for a pan-India rollout here of SDD and BD and it’s available on the entire assortment. So it’s not like there’s some limited assortment, etc. So anything that we can, if you live in a particular pin code in a particular city, then a large part of that assortment is now available. So it’s — I would say there’s not too much of a difference in some of the KPIs we track.
Vijit Jain
Got it. And because in general for a lot of e-commerce platform generally when you’ve seen sped up a fulfilled you know for whatever reasons RTOs tend to go down and those kind of. So I was wondering. But thanks for your questions. Your answers were helpful. My second question is on fashion business. I just wanted to get a broad sense on about a year or so back, at what point of time you guys had mentioned that when you’re launching new products either through your own brand or through others, the journey from concept to retail is like six months-to one year and for most of the goods on the platform, right? Has that shrunk meaningfully since? Do you think that is one of the major vectors of competition that you will see as Sheen comes on-board? Into India? That’s my second question. Thank you.
Falguni Nayar
I think our own brands on our platform is not a — not a very large contribution. I mean it’s all — we’ve always announced it that is about 10% to 12%, but that was always we had said the GMV of our own brands to a GMV of our fashion omnichannel business. And within that it had also the fashion private-label that we sell on third-party platform. So I think I just want to remind you that really, yes, I do understand that fast fashion is what Sheen will bring in and fast fashion is what is prevailing in the industry now.
So to that extent owned labels would have to do that. But I think if you’re asking for a role of food.com.com is going to get that kind of speed of new launches through a lot of D2C and other brands that are also coming onto our platform. International brands, D2C brands like Cider is a very similar model to Sheen. So there are other players from China, which have a similar model that are operating all — so there are a number of players who will cater to that need for speed of launch and our own labels may also participate in that. With that, I think if Adwaita wants to come in?
Adwaita Nayar
Yeah. No, I think we are not trying to launch at an interval quicker than six months. We don’t really think that is the problem to be solved to the need of the consumer. I think the consumer does want constant freshness with new drops every month. And so our own brands are obviously dropping product every single month-to provide them the newness. But yeah, that cycle does begin six months in advance. That being said, we do retail, as Evan said, a lot of other fast fashion brands and folks who are able to bring trends to the market very, very quickly. And so we’re being able to leverage that sort of fast-fashion trendy behavior we are third-party brands, of which we struck a couple of very interesting arrangements where we have a lot of exclusive merchandise coming from those brands and players.
Vijit Jain
Got it. Thank you so much. Those are my questions.
Falguni Nayar
I think at a strategic level, if I may say, so at this point, we want our fashion labels to be enablers to our.com business and have — I mean, they are being built as brands with a journey, which is independent of just our platform and beyond that also. But I don’t think the ambition is to build a very big fashion brand with the aggression of trying to match some of the fastest, largest fashion brands in the country. So we’re not coming from that. We really are — I always say that for even beauty that we are a retailer first and we want to continue to build strong retail platforms.
I think on beauty.com, now we are so large that is also giving us opportunity to build our beauty brands in a very much stronger way because we are a very large distributor. But again, when we are building those brands, we are building them both on platform and off-platform. So we have a brand approach to building brands, but distribution strength is also important and that is what is the unique sauce that Nykaa has.
Operator
I now request Siddhartha Bera from Nomura to please accept the prompt on his screen Tarta, please turn-on your webcam and mute yourself and go-ahead with your questions, please.
Siddhartha Bera
Yes. Thanks for the opportunity. The first question is on this growth on the BPC side in the NSV. So we have seen now for quite some time that the NSV growth has lagged the GMV growth in the BPC segment. So what is really driving this? Will this converge at some point or there are some fundamental changes in the business which will continue to drive this? Some thoughts there?
Falguni Nayar
It has convert this time. This time the NSE growth is slightly faster than the GMV growth.
Siddhartha Bera
Okay. Okay.
Falguni Nayar
Sorry, sorry, I think NSV and revenue from operation is similar. I think yes, the GMV is still slightly higher at 32%.
Siddhartha Bera
Yes. So anything particular which we should look at which is still because it’s like for the last few quarters, we have seen consistently NSV underperforming the GMV. So any thoughts there would be helpful?
Falguni Nayar
No, I think what we were telling you earlier was that on — basically this is reflective of all the brands who sell on our platform and the discounts in the industry had been going up over the last five, six quarters because of competitiveness amongst all the brands. A lot of international brands are coming into the country, lot of domestic brands which already have been there for a long-time are competing with each other and a lot of D2C brands were also jumping into the picture. So that had led to additional competition and as a result, the brands were discounting to compete with each other. So there is some amount of that reflection in there.
Siddhartha Bera
Understood. And second is on this DPC business, again, I mean if I look at the profitability, it’s been at least at the EBITDA level, it’s been stuck at a certain range for quite some time now with offsetting factors always coming from a bigger push towards growth, do you think at some point or at a certain scale, we should start touching that double-digit type of profitability in the near — next futures, next few years.
Falguni Nayar
Yes, I think like what I’ve been trying to say is that it is — most of the investment we have done a lot of improvement in many of the direct cost items. And I think marketing, which is also direct cost item, we have chosen to invest little bit more than say a year-ago when it was at 9.5% for beauty and now it’s at 10.1%. We don’t see this as something — some business getting adverse. We see as a conscious strategy and decision to invest more in marketing to accelerate our growth and that you can see in terms of acceleration in our customer acquisition and in our growth and we do believe that that’s been very valuable.
I think the next line that we need to really work on is other expenses, which have been 12.6% a year-ago and only 12.5% now. There could be some improvement in controlling those expenses and we would like to do that. And yeah, so I think net-net, we do believe that over-time, we like to control both marketing expenses, bring them down and control other expenses, bring them down and those two can lead to improvement in EBITDA margin for Beauty vertical.
Siddhartha Bera
Got it. And lastly, on the gross profitability side for the BPC, do you think there are further levers where we can look to sort of improve that from where we are already like higher-growth in the House of Brands or some other areas where you can think that we’ll continue to improve our gross profitability or this is largely probably at a level where we need to look at more other costs to sort of improve the overall profitability?
Falguni Nayar
No, I think while gross profit margin is quite healthy, yeah, I think I wouldn’t say that there are no drivers at all available to e-commerce businesses. I mean, advertising is one such driver charging for or maybe faster delivery in some you know at a future date or a whole bunch of stuff. But I think we have a very large business. So what all will move the needle is a key question mark rather than are there ways in which we are improving our gross profit margin. We are of course improving. We showed earlier that even in B2B business, we’ve had improvement in gross profit margin. We have had some improvement in our gross profit margin in overall in beauty business like it’s moved up from 42.2% a year-ago to 43.4% now.
So I don’t think that it’s — I wouldn’t say that it’s a very healthy number and I don’t want to give you belief — I don’t want you to believe that, oh, it’s going to go up soon, but I also would not like to admit that there is no ability to improve that. And yeah, as a company, we keep trying to improve our gross profit margin. But because it’s a very large number on a large business, you have to do a lot of initiatives so that it can move the needle.
Anchit Nayar
Yeah, maybe I can add. I would say that each of the individual businesses that sit within the beauty vertical have certain opportunities to improve gross margin. For example, for the multi-brand retail business, if the premiumization of the category plays out nicely, then that is also margin-accretive. If you — if ad income, as I spoke about earlier in — if that revives — continues to revive and if we continue to create more opportunities for brands to advertise on our platform, that could be gross margin positive.
And for B2B as well, there are — there are things the team is working on to improve gross margin, as you said, House of Brands. But I think where it gets very complex is that this vertical is a combination of those businesses. So sometimes even if each business is independently improving their cost structure, improving their margins, if one business that is smaller than the other grows faster naturally off of a smaller base and becomes a larger percentage of the total mix, you know at a consolidated level that can look like it’s staying flat. So I hope you understand that complexity also. But what I can assure you is that each of the underlying businesses have improved their respective margin profiles over the past several quarters and years for that for that matter.
Siddhartha Bera
Got it, thanks a lot, ma’am.
Operator
Thank you. That was the last question we can take today. You may reach-out to Nyka’s Investor Relations team for any additional queries. I would now like to hand the conference over to management for closing comments.
Falguni Nayar
No, thank you very much. We really enjoyed this participation with all of you. I hope we’ve been able to answer most of your questions. And I also want to thank my team on this side who have participated in this call and provided you access to that thought process. So thank you very much everyone who have participated in this call. And with that, look-forward to connecting with you in future.
Anchit Nayar
Thank you.
Adwaita Nayar
Thank you.
Vishal Gupta
Thank you.
P Ganesh
Thank you.