Spend-IT: Nykaa’s tech expenditure crosses ₹100 cr-mark

The online beauty commerce platform Nykaa’s tech expenditure crossed the ₹100 crore mark in FY24. It increased from ₹98.3 crore in the previous year to ₹123 crore in the year ending March 2024, registering a growth of 25%. The growth percentage, however, is lower than the 56% increase reported in the last two fiscal years.

Notably, the platform's tech expenditure growth in FY24 was commensurate with its revenue increase. Nykaa reported a 24% increase in revenue to ₹6,385.6 crore.

The investments in the digital infrastructure include improved discovery through personalisation, a sophisticated ad platform, increased availability through tech-led supply chain planning, and improved customer conversions. The company said in its report that technological developments have aided Nykaa’s business outcomes significantly driving top-line growth and strengthening the bottom line. “We improved our information security posture and saw success with our GenAI programme,” the report added. Further, the enterprise-wide risk management framework has helped in prioritizing and developing strategies to mitigate risks proactively.

The company leverages blockchain technology and Electronic Data Exchange to optimise its supply chain. Nykaa’s technology team is focused on enhancing platform capabilities and the consumer shopping experience, investing in digital tools such as Virtual Try-on and Virtual Stores. On the consumer queries redressal front, as of March 31, 2024, Nykaa was able to automate 60% of its chatbot queries. 

The company said in its FY24 annual report that during the fiscal year, it continued investment in physical store expansion and strengthening technology capabilities, ‘with the peak investment largely behind us’. The company did not respond to TechCircle’s queries.

In May this year, Nykaa received Board approval for the merger of fashion and lifestyle brand  Iluminar Media Limited (LBB) with Nykaa Fashion Limited. As per the company, the merger will drive synergies in technology infrastructure along with partnerships with brands and content creation for all businesses. 

Nykaa has also partnered with the Indian Institute of Management Ahmedabad (IIM-A) Endowment Fund to establish the "Nykaa Chair in Consumer Technology." This three-year collaboration aims to promote research and education in marketing, with a focus on the scientific application of digital, social, and mobile technologies in business models, customer behavior, and broader social change. The program will also explore the integration of AI and machine learning insights.