Nykaa Bets on Brand Loyalty Pass to Combat Rising Competition

CONSUMER-PRODUCTS
Whalesbook Logo
AuthorRiya Kapoor|Published at:
Nykaa Bets on Brand Loyalty Pass to Combat Rising Competition
Overview

Beauty e-tailer Nykaa is rolling out Glam Pass, a brand-linked loyalty feature starting at ₹39, offering discounts on select cosmetic brands. Piloted in Mumbai, this move aims to boost repeat purchases and defend market share against aggressive rivals like Amazon, Flipkart, quick-commerce platforms, and Tira. The strategy targets deeper customer engagement in India's rapidly growing loyalty market.

Beauty marketplace Nykaa is rolling out a brand-linked loyalty feature named Glam Pass, designed to reward repeat purchases on select cosmetic and skincare labels including NYX Professional Makeup, Minimalist, and Nykaa Cosmetics.
Priced from ₹39, the pass offers shoppers a 10% discount, capped at ₹300, on their initial three purchases, valid for three months. The feature is currently live for select users in Mumbai.

Rollout and Strategy

The program is expected to expand to other major cities, such as the National Capital Region and Bengaluru, in the coming weeks. Unlike broad loyalty programs such as Amazon Prime or Flipkart Black, Glam Pass is intended to remain brand-specific. This approach focuses on providing targeted benefits for labels shoppers already prefer, rather than distributing generic perks across a large marketplace.

Competitive Landscape

Glam Pass represents Nykaa's strategic bid to defend its market share and enhance repeat purchasing frequency amidst escalating competition. The company leads the online beauty retail market with approximately 20% market share, followed by Amazon India at nearly 15% and Flipkart at around 10%. However, quick-commerce platforms like Blinkit and Swiggy Instamart are expanding their beauty offerings, leveraging faster delivery as a key differentiator.

Fashion and lifestyle marketplaces such as Myntra are also investing heavily in their beauty categories. Furthermore, Reliance Retail's beauty venture, Tira, and the increasing direct-to-consumer efforts by brands themselves add to the competitive pressure on Nykaa.

Loyalty Market Growth

Loyalty programs have become a critical retention tool in India's increasingly competitive retail sector. The Indian loyalty program market is projected to grow significantly, with valuations expected to rise from approximately $4.3 billion in 2025 to nearly $17.1 billion by 2035. This expansion is fueled by consumer demand for personalized engagement and the adoption of data-driven reward systems.

While platforms like Amazon and Flipkart have popularized wide-ranging benefits including faster delivery and exclusive deals, Nykaa's brand-centric model offers flexibility in managing margins and promotions. It also enables individual brands to co-fund rewards and directly influence repeat purchasing behavior.

Performance Metrics

Nykaa's beauty retail segment demonstrated robust growth in the September quarter, with gross merchandise value (GMV) increasing by 28% year-on-year to ₹3,551 crore. This performance contributed to the firm's overall operational revenue jumping to ₹2,345 crore. The company's net profit also surged by 243% to ₹34 crore during the same period. Despite the positive results, Nykaa's shares opened marginally lower at ₹269.15 on Tuesday.

Disclaimer:This content is for educational and informational purposes only and does not constitute investment, financial, or trading advice, nor a recommendation to buy or sell any securities. Readers should consult a SEBI-registered advisor before making investment decisions, as markets involve risk and past performance does not guarantee future results. The publisher and authors accept no liability for any losses. Some content may be AI-generated and may contain errors; accuracy and completeness are not guaranteed. Views expressed do not reflect the publication’s editorial stance.