Whalesbook
Nykaa Aims to Boost 82°E with Scale
The potential deal hinges on Nykaa's market leadership, its 42 million beauty customers, and its ability to build repeat orders and scale to help turn around the flagging 82°E brand, according to sources familiar with the matter.
82°E Struggles with Pricing and Sales
The direct-to-consumer (D2C) business, launched by Padukone in late 2022 as a premium skincare label, has faced significant challenges. Steep prices, averaging ₹2,500 for 50-ml jars, an unclear market focus, and intense competition from digital-first brands have contributed to its struggles. Regulatory filings show that 82°E's revenue fell 30% to ₹14.7 crore in FY25, leading to a loss of ₹12.26 crore.
Nykaa's Strategy: Building the 'House of Nykaa'
Nykaa, which competes with Reliance Retail's Tira, Sephora, and Shoppers' Stop Beauty, has been actively pursuing its 'House of Nykaa' strategy through strategic acquisitions. The retailer has previously bolstered its portfolio with brands like Nudge Wellness, Dot & Key skincare, and clean beauty label Earth Rhythm. Nykaa reported strong Q3 FY25 performance with a 156% year-on-year increase in net profit to ₹68 crore on consolidated revenue up 27% to ₹2,873 crore.
Celebrity Brands Thrive with Corporate Backing
Analysts suggest celebrity brands often thrive by partnering with established corporates for scale and profitability. Star power primarily helps drive initial consumer interest. This trend is evident with Alia Bhatt selling a stake in Ed-a-Mamma to Reliance Retail Ventures and Virat Kohli partnering with Agilitas.
India's Beauty Market: A Growth Engine
India is poised to be the world's fastest-growing beauty and personal care market, forecasted to reach sales of $34 billion by 2028. E-commerce is leading this growth, fueled by easier access to premium labels and increasing discretionary spending, particularly from tier 2 and 3 cities.