Nykaa IPO

FSN E-Commerce Ventures Ltd. IPO - SWOT Analysis

Strengths:

Nykaa’s profit for FY2021 amounted to INR 61.94 Crores in comparison to a restated loss of INR 16.34 Crores for the previous financial year. Its EBIDTA amounted to INR 2.441Cr for FY2021, along with an EBITDA margin of 6.61 per cent.

Apart from its profitability, its capital efficiency and strong business model add to its strength. It also has a proprietary stack that has evolved with reference to present challenges and possible future hurdles.

Weaknesses:

Security breaches along with cyber-attacks pose as weaknesses. Furthermore, the dependency on reliable and secure networks and mobile usage along with third-party data centre hosting services and additional third-party providers potentially weaken Nykaa.

Opportunities:

Nykaa has taken advantage of it having been well-received online and has begun to expand upon its offline, physical store presence. It currently boasts around 80 physical stores spread across 38 cities in India.

Taking advantage of the offline space to cater to additional clientele could further expand its client base.

Threats:

A potential threat to Nykaa’s success is its dependency on the domestic growth of the online consumer industry.

The industry within which it operates is highly competitive and must be met with caution. Owing to the fact that it lacks control over the quality of products sold by its vendors, it can incur legal liabilities and reputational harm in case of authenticity issues and product defects.