NATIONAL INSTITUTE OF FASHION

TECHNOLOGY

MID TERM ASSIGNMNENT CONSUMER

BEHAVIOUR

NYKAA

SUBMISSION BY- RAJESH KUMAR

MFM/21/1274

RESEARCH ABSTRACT
Beauty and personal care industries used to rely heavily on the shop
experience of touch, feel, and smell. We had no idea that businesses
like beauty and personal care would eventually migrate to digital
platforms. We are all aware that the evolution of e-commerce sites has
made life in the world easier, simpler, and time-saving. The beauty and
personal care industries are no exception to the digital mode, as
evidenced by changing trends.

This paper discusses how e-commerce platforms have changed the

way people prefer online shopping over physical shopping, as well as
the factors in uencing consumers' purchasing behaviour when it comes
to cosmetic and beauty products on an online platform called Nykaa.

INTRODUCTION
Nykaa, an Indian e-commerce startup based in Mumbai, Maharashtra,
is the country's most popular beauty buying destination. It features
650+ brands and serves over 1000 cities across India, with 25 of them
being high-end brands such as MAC, Clinique, Estee Lauder, NYX,
Bobbi Brown, and others. Nykaa also o ers 33 physical locations that
are divided into two categories: Nykaa on trend and Nykaa luxurious.

Nykaa has done a fantastic job of reaching out to the market. It has
used Porter's value chain framework as a tool to calculate competitive
advantage based on market price variations. The variations in Nykaa's
business activities and relative pricing and costing philosophy are the
focus of this investigation. It has a lower operating cost and commands
a good premium.

This analysis is divided into 2 types

• Primary value chain
• Supporting value chain
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 PRIMARY VALUE CHAIN

The primary value chain usually works on 5 categories

• Inbound logistics- which deals with the warehousing and material

handling.

• Operations- which deals with the raw materials being turned into
nished goods, also the consumer data is collected from the database
to build the companies strategies based on the consumer buying
behaviour.

• Outbound logistics- this deals with the distribution of the nal

products to the end consumers.

• Marketing & sales- This is the primary activity aimed at establishing a

sales channel via which Nykaa's potential clients can purchase its
items. This category includes activities such as channel selection,
price strategies, ad campaigns, and promotional e orts, among
others.

• Services- this deals with the post sales activities such as tracking the
post-sale data information and maintaining it for further progress of
the company.

SUPPORTING VALUE CHAIN

The supporting value chain is used to support the primary value chain
of the company and these are further classi ed into 4 activities

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• Firm infrastructure- It deals with the general management, quality
management, nance & accounting, planning & legal services of the
company.

• HRM- It deals with the activities like recruitment, selection & hiring
employees, training & development etc. This is the activity that
supports the company and does not have any negative e ect on the
competitive advantage of the company.

• Tech-development- It deals with the activities such as eld testing,

tech-selection, component & feature design and process engineering.

• Procurement activities- The procurement activities are used to make

input purchases like raw materials, lab equipment, machinery needs
etc. to the company. This is also used to evaluate the company’s on-
going performance.

Nykaa operates on an inventory-based e-commerce approach, in which

goods are acquired directly from manufacturers and held in Nykaa's
warehouses. These items are now sold directly from the warehouse,
resulting in a huge pro t margin.

The brand SEPHORA, which sells only high-end items, is Nykaa's main
competition. Nykaa, on the other hand, sells a wide range of products,
from high-end to low-end. If you look closely, you will notice that Nykaa
sells every well-known brand. Nykaa did not cater to a single
demographic, but rather to a diverse range of demographics spanning
from low to high socioeconomic status. Nykaa has grown in popularity
throughout the country as a result of this. Nykaa buys products directly
from the manufacturers, allowing it to earn a signi cant percentage on
the sales. Nykaa does not provide discounts on any goods; instead, the
brands provide the reductions so that their commission is not reduced.
That is why Nykaa is less expensive and saves customers time by
eliminating the need to go to the market. So, whether a consumer
receives a discount, a gift certi cate, or a free item, it is from the
original brand, not Nykaa. Nykaa has reached break-even point after 5
years of ups and downs, and the company is now pro table. Apart from
selling other brands, Nykaa has launched its own product line,
emphasising to all types of customers that the things they are looking
for are also available under their own brand name. Nykaa now has 50
percent recurring clients, demonstrating that their retention game is
good, and they work hard on the other 50 percent of the market. As a
result, Nykaa has grown to become India's largest beauty buying
destination. Nykaa has a 33 percent share of the online cosmetics
business in FY 2018, according to a recent piece in the Economic
Times.

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RESEARCH PROBLEM

Nykaa is one of the most popular shopping platforms in the beauty and
cosmetics sector, but no academics have looked into the rm in depth
or investigated what elements may in uence consumer purchasing
behaviour while using Nykaa as a platform for purchasing beauty items.
So, what are the things that in uence Nykaa's consumer purchasing
decisions?

LITERATURE REVIEW
KEYWORDS:
• Consumer buying behaviour

• online buying behaviour

• factors in uencing the buying behaviour.

"Consumer Buying Behaviour refers to the selection, acquisition, and

consumption of goods and services for the satisfaction of their
demands," write Dr. S.A. Mohamed Ali and Ramya N in their research
paper. Various processes play a role in consumer purchasing decisions.
There are numerous aspects that in uence a person's decision to
acquire anything. And, as the authors point out, a purchase decision is
the consequence of all of the factors that in uence a consumer's
decision.

FACTORS INFLUENCING CONSUMER BUYING BEHAVIOUR

Several factors that in uence the consumer buying behaviour are:

1) Internal or psychological factors

2) Social factors

3) Cultural factors

4) Economic factors

5) Personal factors

The elements listed above are used to assess a customer's motivation,

perceptions, beliefs, attitude, role, status, culture, subculture, social
class, income, lifestyle, occupation, and personality, among other
things. Who, what, why, how, when, and where do they buy are the ve
questions that underpin any knowledge of consumer purchasing
behaviour.

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 "Consumers determine if, what, when, and from whom to buy,"
according to A.K. Rastogi's 2010 study. They can purchase the things
through a variety of channels." We will discuss online shopping
behaviour because this paper is about an e-commerce platform.
Consumer personality, situational considerations, product
distinctiveness, previous purchasing experience, and most signi cantly,
faith in online shopping all in uence how people feel about shopping
online.

"Online shopping behaviour is a crucial part of e-commerce that is

often given less importance when compared to other factors like
technology, digital marketing, and so on," Prasad A and Gudimetla S,
2019, wrote in their study of women's digital shopping behaviour with
regard to beauty and personal care products. Online shopping
behaviour explains a consumer's overall view and appraisal of a
product when they are purchasing it, which can result in a negative or
positive outcome. The preferred time of purchase, the buyer's intention,
a consumer's demographic and cultural backgrounds, and other
characteristics that in uence a consumer are all variables that can be
used to measure behaviour.

The authors of a study, Bhatt S and Bhatt A,2012, stated that variables
such as time, product availability, a ordable pricing, e-retailer
promotions, and simplicity of payment methods encourage young
brains to buy more online. We all know that persons between the ages
of 20 and 35 are the most active users of the internet. As a result, most
e-retailers keep this age group in mind before promoting a brand.

Another study by Anjana SS, 2018, found that buyers go through a

sequence of processes before purchasing a product. They assess the
product to ensure that its features t the demands and expectations of
the customer. These requirements include good quality at a reasonable
or a ordable price, as well as value-added features for the user.
Consumer buying patterns di er when it comes to product quality,
price, features, packaging, and so on. Consumers are in uenced by
fashion and changing trends, which in uence their purchasing habits.

Marketing Mix

PRODUCT
Product is one of the most important components if the Nykaa .Com..
The distinctive Characteristics of the product by Nykaa com. A Passion
for Beauty are:-
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MAKEUP

SKINCARE

HAIRCARE

APPLIANCES

PERSONAL CARE

NATURAL CARE

NATURAL
MOM & BABY

HEALTH & WELLNESS

MEN

FRAGRANCES

LUXE.

Quality
Nykaa com A Passion for Beauty maintains the high quality of products

High product quality is maintained by adding value during di erent
stages of the value chain
Nykaa com A Passion for Beauty procures req. materials from reliable
and trusted suppliers only These raw materials are processed under
carefully maintained environments to maintain high and consistent
quality of the products.

Ease of use
The products manufactured and sold by Nykaa com A Passion for
Beauty are relatively easy to use

All products come with a user manual, which is easy to understand and
which provides simple instructions for products use
The consumers can also call the 24/7 helpline to understand details
about product usage

Price

Geographical pricing
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 Nykaa com A Passion for Beauty is able to penetrate di erent regional
markets to penetrate di erent regional markets optimally with the use of
geographical pricing
For o shore locations, geographical pricing also allows Nykaa com A
Passion for Beauty to cover shipping and customs expenses

Geographical pricing also allows Nykaa com A Passion for Beauty to
maintain consistent revenue growth by altering pricing in di erent
markets based on local currency value.

Premium Pricing
By using premium pricing of some of its product ranges, Nykaa com.

A Passion for Beauty encourages Favorable brand and product
perceptions in target consumer groups. Premium pricing for products
also encourages a favorable quality perception of Nykaa com A Passion
for Beauty products amongst consumers.
With premium prices, Nykaa com A Passion for made some of its
product ranges exclusive by restricting sales and production.

This in turn leads to perception luxury in consumption products.

BundlePricing
For some product ranges, Nykaa com A Passion for Beauty is also
known to use bundle pricing strategy popularly

Nykaa com A Passion for Beauty also uses bundle pricing sales
Bundle pricing increases the trail rate for consumers Nykaaa com A
Passion for Beauty experiences higher return on the cost of gaining a
new customer With bundle pricing, Nykaa com A Passion for Beauty is
also able to control costs and prices by lowering marketing and
distribution expenses The use of bundle pricing also adds value to the
umbrella brand name of nykaa.com A passion for Beauty.

Promotion
The marketing strategy for Nykaa com A Passion for Beauty also places
high importance on the promotional tactics and strategies used. The
promotional strategies allow the Nykaa com A Passion for Beauty to
interact with the consumers and in uence them directly. Nykaa com A
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 Passion for Beauty uses a 360-degree approach in its promotional
activities, and makes use of the following means of promotion.

Swot Analysis

INVENTORY MANAGEMENT

Nykaa's business plan is based on a series of strategic business

operations that culminate in the delivery of the nal order to the
consumer as a product. The inventory model, exhibiting inventory as
selling products, and order ful llment are the three essential features of
its business concept.



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 Inventory Model
Nykaa operates on both online and o ine channels and to do so
e ectively, they keep appropriate inventory in their warehouse. The
inventory model is especially e ective at delivering items to customers
faster because it eliminates the need for other sellers to ful ll the order.
It also ensures quality because the product is obtained directly from a
speci c brand without the need for intermediaries.

Displaying goods in online and of ine stores

Nykaa sells beauty and wellness items online and has several o ine
stores in various locations to serve the country's citizens. Clients
purchase the product directly from local retailers. In the case of an
online store, the product range is displayed on the basis of the
inventory on hand. As a result, the company must constantly monitor
stock availability and demand.

Order ful llment

Nykaa guaranties that product will be delivered within 1 to 4 days of the
order being placed. Nykaa eventually pro ts from the discounts they
receive for purchasing products from direct brands. They bene t from a
high product margin because they buy in bulk, and the end user
bene ts from dependability, quality, and a reasonable price.

RESEARCH METHODOLOGY

OBJECTIVES:
1) To study and analyse the online consumer buying behaviour.

2) To assess the behavioural level of customers of di erent age group.

3) To understand the factors in uencing the consumer buying behaviour

with respect to Nykaa.

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HYPOTHESIS FORMULATION:

1) H0: Age has no signi cant e ect on consumer buying behaviour

Ha: Age has signi cant e ect on consumer buying behaviour.

2) H0: Price has no signi cant impact on consumer buying

behaviour.

Ha: Price has signi cant impact on consumer buying behaviour.

3) H0: Quality has no signi cant impact on consumer buying

behaviour.

Ha: Quality has signi cant impact on consumer buying behaviour.

4) H0: Availability of brands have no signi cant impact on consumer

buying behaviour.

Ha: Availability of brands have signi cant impact on consumer

buying behaviour.

5) H0: Social media/social media in uencers have no signi cant

impact on consumer buying behaviour.

Ha: Social media/social media in uencers have signi cant impact

on consumer buying behaviour.

6) H0: Brand name has no signi cant impact on consumer buying

behaviour.

Ha: Brand name has a signi cant impact on consumer buying

behaviour.

RESEARCH DESIGN:
The research design applied was descriptive design. This design helps
to describe a population, situation or a phenomenon. This was mainly
used to answer the questions like what, when, where, when and how.

RESEARCH METHOD:
Quantitative approach is the method used in the research. This method
helps to analyse the data statistically or we can say that numerical
analysis is done through questionnaires and surveys. Quantitative
method focuses more on gathering numerical data and generalising it
across groups of respondents or to explain a particular phenomenon

PRIMARY DATA:
Primary data was collected through an online questionnaire to a set of
respondents who are believed to have desired information.

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SECONDARY DATA:
Various published articles regarding consumer buying behaviour and
about the company Nykaa were referred for the secondary data
collection.

SAMPLING DESIGN:
Convenient sampling was adopted in selecting the respondents to
collect the data. Data has been collected from a sample of 146
respondents.

STATISTICAL ANALYSIS OF DATA:

The collected data were carefully analysed and evaluated. Statistical
tools such as chi-square test and multilinear regression analysis were
applied to interpret the data to draw meaningful results.

DATA ANALYSIS
Interpretation: It is seen from the above pie chart and the table 1.1, that the
males constitute 33.10% and females constitute 66.90%. Here it is evident that
female play the major role.

Interpretation: From the above table 1.2, we can see that 77.2% of the
respondents fall under the age group of 20-25, 14.5% of the respondents fall
under the age group of 25-30, 3.4% of the respondents fall under the age group
of 15-20, 2.8% & 2.1% under 30-40 and 40 & above respectively.
Interpretation: From the above table 1.3, we can see that 77.2% of the
respondents have said that they buy beauty products online and 22.7% have
said that they do not purchase cosmetic products online.
Interpretation: From the table 1.4, it is clearly seen that 60% of the
respondents from 77.2% chooseNykaa as their online shopping platform for
buying beauty products which is a huge number. And the rest are the 17.2%
respondents who choose other platforms over Nykaa.
Interpretation: From the above table 1.5, we can see that 18.62% respondents
are impulsive customers, 15.17% are discount customers, 13.10% are the loyal
customers, 7.59% are the new customers and 5.52% are the potential customers.
These sum up to that 60% of the customers who chose Nykaa as their platform.
22.76% of respondents who do not purchase beauty products online and the rest
are the 17.24% who purchase beauty products online but do not choose Nykaa
as their platform to purchase. These two sum up to the 40% of the respondents
who fall under the option “did not opt” as shown in the table.
Interpretation: As we can see from the above table 1.6, 19.31% of the
respondents are highly reliable and 26.90% of them are reliable from the total
of 60% of the respondents who choose Nykaa. 13.10% of the respondents are
neutral about the reliability.
 Interpretation: From the above table 1.7, we can see that 20.7% are strongly
satis ed with the brand, 30.3% are satis ed and 9.0% are neutral about the
satisfactory level.
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Interpretation: As we can see from the above table 1.8, that 13.8% of the
respondents from the 60% of the respondents who chose Nykaa have responded
“no” when asked if they would choose any other platform similar to Nykaa.
30.3% have responded “maybe” which means they do not have a clarity about
it. 15.9% have responded that they would choose.
Interpretation: As we can see from the table 1.9, amongst the 22.76% of the
respondents who do not purchase beauty products online, 10.3% of the
respondents said that they never got the need to buy. 4.8% of the respondents
said that they are not interested in beauty products and 7.6% of the respondents
said that they prefer of ine shopping over online as of ine gives more
personalized experience.
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QUESTIONARE
CONCLUSION
As per the speci ed objectives, the study was accomplished successfully.It is
concluded that the mentioned factors in the research have good in uence on the
consumer buying behaviour.

REFERENCES

Anjana, S.S., 2018. A study on factors influencing cosmetic buying behaviour of

consumers. International Journal of Pure and Applied Mathematics.

Bhatt, S. and Bhatt, A., 2012. Factors influencing online shopping: an empirical
study in Ahmedabad. The IUP Journal of Marketing Management.

Jadhav, V. and Khanna, M., 2016. Factors influencing online buying behavior of
college students: A qualitative analysis. The Qualitative Report.

Sharma, A., Bhola, S., Malyan, S. and Patni, N., 2013. Impact of brand loyalty on
buying behavior of women consumers for beauty care products-Delhi region. Global
Journal of Management and Business Studies.

Rastogi, A.K., 2010. A Study of Indian Online Consumers & Their Buying
Behaviour. International Research Journal.
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