NEW DELHI, India — The Estée Lauder Cos. has teamed with one of India’s largest beauty players, Nykaa, on a brand incubation initiative aimed at discovering whether the next big beauty brand to hit global markets can come out of that country.
The two leaders of the program are Shana Randhava, vice president of ELC New Incubation Ventures, and Anchit Nayar, chief executive officer of beauty for Nykaa e-commerce. The initiative, called Beauty & You, will carry prize money of up to $500,000 as well as mentorship for the winning brands from the two beauty giants. The application portal opens on Aug. 1, and applications until be accepted until 11:59 p.m. IST on Sept. 30. The jury to help choose winning entries includes Bollywood star Katrina Kaif, who is also the founder of Kay Beauty; fashion designer Sabyasachi Mukherjee, and Samarth Bedi, the executive director of beauty brand Forest Essentials, among others.
More from WWD
“The new initiative will harness the entrepreneurial energy in India,” Randhava said.
She knows about entrepreneurial energy and new initiatives, having headed New Incubation Ventures since 2021, and having studied global markets and emerging brands extensively in the past years.
India has become the third-largest unicorn hub this year, after the U.S. and China — with a fast-growing number of new companies crossing the $1 billion mark over the last two years.
In April 2020, Nykaa became a unicorn, the first solo woman-founded start-up in India to achieve that feat. This year, e-commerce beauty company Purplle was another entrant into the list.
“I’ve been at Lauder for eight years and have spent a bulk of my time looking at emerging brands across the world,” Randhava said, explaining that New Incubation Ventures was launched last year and has closed four investments since. “Globally, we looked at 1,200 brands of which we picked four to make our first investments. This is the model that we are looking to scale globally.”
She said the process began with the clarity and pattern recognition of what it really takes to break through and build a brand that’s going to last. “We’re really looking to build long-term brands with a clear sense of what those criteria should be,” she said. “There was one factor that stood out across all those — the network of support those brands had; we saw they had communities that had really built them up,” she observed, adding that Estée Lauder also had built the depth of its ecosystem across consumers, R&D, and distribution, and these were all important factors.
“We were seeing what is happening in India and thinking, ‘How can we replicate these factors and bring the power of Estée Lauder and the power of Nykaa together to create a platform where we can not only identify the next generation of brands but propel and accelerate them?”
The concept of reaching the entrepreneurs who are imagining how to change beauty, and allow them to benefit from the combined experience and network was a challenge.
“The idea was to find ways to allow the consumers to experience these brands better, and build on what Nykaa has done in terms of democratizing beauty,” she said.
Nykaa, which launched its initial public offering in November last year, has more than 105 physical stores in India, including 51 in the luxe space. It sells more than 4,000 brands, 3.1 million product stock keeping units through its website and mobile applications and has carved out its niche in the Indian beauty market, reaching consumers across 19,000 pin, or postal, codes.
Nayar explained that there was still a way to go. “We think that India is still at a very nascent stage in its own beauty journey,” he said. “If you look at the per capita spend in India, it is in single or low double digits compared to other markets even closer to home — Vietnam, Indonesia, for example. Then you have also got the fact that premiumization in beauty in India is very nascent, it is still single-digit penetration for premium beauty. But the good news is that India is the fastest growing beauty and personal care market in the world and will soon be one of the largest. Today it is a $16 billion market and predicted to be $28 billion in the next five years, which is quite a sizeable, addressable market for both of us. We think the timing is perfect for us to come together to run this program.”
“We think this is a way to give back to the ecosystem which has given to each of us — Nykaa has been a big beneficiary of digital India and ‘Made in India’ — the question was how do we give back and find and really accelerate the next generation of entrepreneurs who build businesses like Nykaa, and bigger ones like Estée Lauder? Can the next big consumer brand come out of India?”
It is also a move for Lauder, which has been in India since 2005. While it has grown its network of physical stores with a long-term vision of the market, the group made its last investment in an Indian brand in 2008, with a minority stake in Forest Essentials, which is based in Indian ayurvedic traditions.
Rohan Vaziralli, general manager of ELCA Cosmetics Private Limited, the Indian subsidiary of Lauder, has been watching the beauty market in India closely, and noted the changing climate. “Today, you are getting a consumer who is much more informed. Earlier we could only address the consumer at the point of sale and we were waiting for the next big mall to come up. Now education has exploded because mediums and platforms have exploded and we are putting out educational material for Estée Lauder in eight languages — on YouTube, Instagram and every other platform that the Indian consumer visits. You are seeing the desire to move up in terms of what consumers are purchasing, the consumption is there. We are seeing the growth,” he said.