Nykaa ad spends in FY25 up nearly 35% from last year

Nykaa has increased its marketing and advertising spends to Rs 995 crore in FY25, marking a jump from Rs 739 crore in FY24, a nearly 35% rise. This accounted for 12.5% of the company’s annual revenue, up 94 basis points from the previous year.

The increase was fuelled by brand-building initiatives and large-scale campaigns focused on long-term customer acquisition.

According to the company, marketing investments were strategically directed towards enhancing brand equity through high-impact platforms such as Nykaaland and Nykaawali Shaadi, both of which aimed to engage new audiences and strengthen Nykaa’s market presence.

The results of these efforts were visible in the company’s customer metrics where over nine million new customers were added during the year, taking the cumulative customer base to more than 42 million, a 28% year-on-year growth.

The company’s CFO said the increased marketing allocation in FY25 was a conscious choice to support long-term category creation and scale. “Key initiatives aimed to boost brand equity, resulting in marketing expenses rising to 12.5% of revenue. This strategy helped us acquire over nine million new customers,” he said, adding that the campaign-led approach contributed to deepening engagement and sustaining brand relevance in an evolving beauty market.

Nykaa’s in-house brand portfolio continued to gain momentum, with the House of Nykaa brands collectively clocking over Rs 2,100 crore in gross merchandise value (GMV) in FY25.

Adwaita Nayar, MD and CEO, said the portfolio has grown at a five-year CAGR of 52%, driven by brands such as Nykaa Cosmetics, Dot & Key, Kay Beauty and Nykd. Dot & Key crossed Rs 900 crore in GMV in FY25, while Kay Beauty and Nykaa Cosmetics achieved GMVs of Rs 240 crore and Rs 350 crore respectively. These brands, built entirely in-house, now retail not only online but also across 237 Nykaa Beauty stores and over 38,000 offline points of sale, indicating a strong omnichannel scale.

“What makes this model unique is our full-stack brand-building capability from R&D, sourcing and manufacturing to content, influencer marketing and distribution, all under one roof,” said Nayar.

She added that this approach enables faster brand rollouts, higher marketing efficiency, and improved consumer loyalty. Mature brands have maintained healthy contribution margins, supported by better repeat rates and increased category penetration.

The report mentioned, underlying Nykaa’s strong performance is a broader shift in the Indian beauty and personal care market, which is being driven by new consumer cohorts, rising digital adoption, and an expanding premium segment.

Gen Z and millennial audiences are playing a key role in shaping consumption trends, particularly in Tier-II and Tier-III cities. These digitally native consumers are setting new standards in beauty with preferences rooted in authenticity, inclusivity and transparency. Social media has been instrumental in democratising access to beauty trends, enabling consumers in smaller cities to keep pace with their metro counterparts.

India’s beauty sector is also witnessing the rise of homegrown brands that are responding to local consumer needs with differentiated offerings. Innovations in product formats and ingredients have allowed these brands to scale rapidly, often with the help of strategic partnerships.

Another notable trend is the stepification of beauty routines, especially among younger consumers. Skincare, haircare and makeup are no longer reserved for special occasions, and multi-step routines have become a daily norm, leading to increased usage of diverse product categories.

At the heart of Nykaa’s consumer engagement strategy is digital content and influencer marketing, as per the report. As consumer preferences become more niche, micro-influencers and beauty creators are emerging as critical voices in the discovery and recommendation process. This trend has helped brands foster stronger consumer trust and loyalty through educational, personalised content.

Technology too is playing a critical role. The use of artificial intelligence for personalised product suggestions and augmented reality tools for virtual try-ons is improving customer experience, reducing purchase hesitation and driving higher conversion rates.