Nykaa Exclusive: Fashion Business Set to Break Even, Says CEO Falguni Nayar

The fashion vertical of FSN E-Commerce Ventures, which operates beauty and fashion platform Nykaa, is approaching break-even as the business gains scale and operational momentum, according to founder and CEO Falguni Nayar. Speaking to NDTV Profit, Nayar said the company has seen a significant improvement in profitability metrics in its fashion business, particularly at the EBITDA level, after years of investment in building the platform.

While she stopped short of giving a specific timeline, Nayar indicated that the segment is moving closer to profitability. “We always share a clear path to profitability. Investors have seen a large improvement in EBITDA in the fashion business in the last quarter,” she said.

"Breakeven is just the first step. After that we have to build profitability from there."

Fashion Business Gaining Scale

Nykaa entered the online fashion market around 2018-2019, several years after establishing its leadership in beauty and personal care. She said the fashion category is structurally larger than beauty and offers a significant long-term opportunity. Fashion retail in India is roughly five times the size of the beauty and personal care market, making it a strategic expansion for the company.

Building the fashion platform required a different operating model compared with Nykaa's beauty business, she noted. Unlike beauty-which is largely retail-led-the fashion vertical functions more as a marketplace model, allowing sellers greater control over pricing and inventory.

Over the past few years, Nykaa has invested heavily in technology, seller infrastructure, and discovery tools tailored to fashion shopping.

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Brand Partnerships Strengthening Platform

The company has also focused on onboarding global and premium brands to strengthen its fashion offering. Nykaa recently partnered with Foot Locker and has also tied up with Nike to operate the Nike India online store, moves that Nayar said have helped boost investor confidence in the fashion strategy.

The platform aims to position itself slightly more premium than mass fashion marketplaces, with a focus on curated brands and trend-driven assortments.

Alongside marketplace expansion, Nykaa has also been developing its own fashion labels. These include brands such as Nykd by Nykaa, Twenty Dresses, RSVP, and MIXT by Nykaa. However, Nayar said the company is currently prioritising strengthening the platform and brand partnerships rather than aggressively expanding its in-house fashion portfolio.

In contrast, Nykaa's beauty business continues to benefit significantly from owned brands, which typically offer higher margins than third-party retail sales.

Technology and AI to Drive Next Phase

Nayar also highlighted the growing role of artificial intelligence across Nykaa's digital platforms. Tools such as virtual try-ons, skin analysers, recommendation engines, and AI-driven search are increasingly being used to personalise the shopping experience.

AI is expected to improve product discovery and customer conversion rates, while also helping reduce operational costs through automation in areas such as content creation and customer service.

Looking ahead, Nayar remains optimistic about the broader consumption outlook in India. Rising incomes, a young consumer base, and growing discretionary spending are expected to drive demand across beauty, fashion, and lifestyle categories over the coming decade. "We believe India will continue to be a strong consumption economy, and it will be a big decade for retail and e-commerce," she said.

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