55% will be owned by a division of FSN E-Commerce Ventures, and the remaining 40% will be owned by the Apparel Group. The amount of the investment has not been made public by the corporation.
The group entity will develop multi-brand omnichannel beauty retail operations for Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE), through a company that will be incorporated in the Abu Dhabi Global Market.
This is the first time Nykaa has joined forces in this way to enter a foreign market. Under a new brand, it will be managed by independent professional management.
According to Nykaa cofounder and chief executive Falguni Nayar, the company's e-commerce operations should begin within the next six to twelve months. According to Nayar, the GCC region was chosen by the corporation because of its high per capita use of beauty products and rapid economic development.
At a press conference Nayar said that, “We are impressed with the market from its consumption and penetration of beauty perspective. Add to that you had a very vibrant economy. We see this as a multi-year growth opportunity; I think, GCC countries will grow over 10-20 years and Nykaa wants to be part of that...”.
The Apparel Group, headquartered in the UAE and founded by Sima Ved in 1996, is one of the biggest omnichannel retailers in the Middle East. With more than 2,000 stores spread across 14 countries, it is home to more than 75 lifestyle and cosmetic brands.
“Since its inception in 1996, the Apparel Group has been focused on addressing the changing needs of its diverse customers across our presence in GCC, India, Southeast Asia & Africa. This alliance is going to be a new chapter in our expansion journey as we look forward to leveraging each other’s strengths and offering unique value propositions to our consumers in the GCC region,” Ved told the media.
Nayar claimed that the business would use its digital influencer marketing strategy, possibly even using Bollywood stars, to entice clients in the area to the platform.
According to a report by RedSeer Consulting, Saudi Arabia and the UAE are two of the region's largest markets for personal care and beauty products, with respective markets worth $17.1 billion and $6.6 billion as of 2021. Over the following three years, these markets are expected to grow at a CAGR of 7% and 9%, respectively.
In the past 18 months, Nykaa has purchased five brands, including nutricosmetics Nudge Wellness, a majority investment in the beauty brand Dot & Key, and a minority position in the science-focused Earth Rhythm.
