Affluent Indians have a new address—a shiny, urban, concrete jungle called Dubai. Geographically positioned perfectly to act as a bridge between their original homes and the rest of the world, Dubai is quickly becoming a haven for Indians seeking aspirations for a luxurious life. With a 3.3 million strong Indian diaspora growing at a rate of 10.7% annually, it's no surprise that India’s favorite homegrown beauty brands too are looking to spread their wings and establish a foothold in this vibrant market.
The most recent brand to jump on the UAE expansion bandwagon is Nykaa, which has already established itself as a market leader in India and become a household name. Founded by Falguni Nayar in 2012, the omnichannel beauty platform that transformed the landscape of the Indian beauty industry by becoming the first beauty company to go public, now has its eyes firmly set on the UAE for its next phase of expansion. The brand, which partnered with the Gulf Cooperation Council (GCC)-based Apparel Group last year, has recently secured $2.5 million from its UAE partner Nessa International (Nysaa Beauty LLC) to expedite expansion in the UAE, along with the opening of its first store in Dubai.
The Rise of Nykaa as a Beauty Giant
From 15 rounds of funding to an oversubscribed IPO that raised $722 million, the beauty giant that defined the beauty industry in India was valued with a market capitalization of $5.39 billion as of March 2024. Born out of a simple mission to make beauty a mainstream possibility, Nykaa aimed to tap into the underserved beauty retail market and disrupted the ecosystem to put India on the global beauty map. Over the years, it steadily captured the hearts and minds of Indian consumers and built a loyal customer base through engaging and educational beauty and personal care content. Today, the brand has become synonymous with beauty in India and become the leader in setting beauty standards and trends. Acting as an incubator for home-grown beauty brands and an efficient, one-stop shop for all beauty and cosmetic needs, the women-centered marketplace records over 1.3 million orders a month and reported more than 24 million users as of September 2023.
By positioning itself not only as a launchpad for home-grown beauty brands, Nykaa’s unwavering commitment to authenticity and customer centricity has made it the retailer of choice for international brands entering the Indian market. The most recent entrant was Rihanna’s Fenty Beauty that chose to partner with Nykaa over its competitor Sephora to make its mark in the region. With more than 174 offline destinations and the strongest e-commerce presence in the country, Nykaa continues to build its enterprise of brands with a sharp focus on innovation and customer satisfaction. Driving profitable growth with 106% year-on-year growth, the brand has done a tremendous job in tapping into the $31 billion Indian beauty and personal care market.
Nysaa, Nykaa’s New UAE Arm
Following its establishment of a dominant market leading position in India, Nykaa is embarking on a journey of global expansion, with the UAE as its first target for international growth. The brand has partnered with the GCC-based Apparel Group to leverage its robust distribution network and complement it with Nykaa’s strong understanding of beauty and personal care to offer a novel omnichannel retail concept named Nysaa. Nykaa holds a majority stake of 55% in this joint venture, while Apparel Group owns the remaining 45%. Designed to be a mutually beneficial alliance, the partnership allows Apparel Group to deploy funds as on as-needed basis to the publicly listed company. With a goal of opening 100 stores in the GCC over the next five years, along with a strong online presence, the collaboration marks the beginning of a pioneering journey in redefining the beauty landscape across the GCC.
Commenting on this significant moment, founder and CEO Falguni Nayar said, “Nysaa’s first store in Dubai marks a significant milestone in our international foray. Our partnership with Apparel Group is a powerful collaboration of Nykaa’s beauty leadership in India and their retail expertise in the GCC region. Having garnered tremendous love and trust among Indian consumers for more than a decade, we are looking forward to recreating an exceptional beauty shopping experience, online and offline, for the discerning consumers of the GCC.”
Nysaa is committed to providing an unparalleled beauty experience for its customers by transcending the boundaries of traditional beauty retail and catering to diverse needs of the GCC clientele. The innovative beauty concept seamlessly blends in-store engagement with digital gratification, resonating with the needs and preferences of the modern beauty consumer in a way that feels authentic and accessible. The first Nysaa store, located in Dubai’s Mirdif City Centre Shopping Mall, boasts a premium selection of beauty products from renowned brands such as Foreo, Indian born-Kay Beauty, Kylie Cosmetics, and many more. Spanning 2,436 square feet, the retail concept focuses on an immersive, personalized in-store experience with knowledgeable beauty advisors on hand and available to assist customers. Additionally, the store invites content creators and customers to create engaging content for social media using Nysaa’s products in the eponymous Nysaa Content Creation booth, further enhancing the interactive in-store shopping experience.
With an estimated 24.1% of the total revenue in the UAE beauty and personal care market expected to come from online sales, Nysaa’s e-commerce first model aligns well with the market trends. Expansion to the UAE allows it to not only further accelerate the presence of other Indian brands in the GCC region, but also allows Nykaa to tap into the growing online consumer market in the UAE to strengthen its overall position as a beauty leader globally.
India’s Evolving Relationship with the UAE
With a significant Indian expatriate community, exponentially growing purchasing power and access to new opportunities that far surpass those available in India, Nykaa’s expansion to the UAE signifies a deeper connection between the two regions. Historically, Indian brands have leveraged their entry into the Middle East to gain access to new customers with familiar ethnicities, wide international networks, and access to new collaboration opportunities. However, in recent years, the market has not only emerged as an important pillar in India’s outreach to the Gulf region as a whole, but has also become a region that provides seamless transition and expansion opportunities for Indian brands across various industries. With ease of access and an existing customer base of clients who in most cases are already familiar with the brands, expansion to the UAE provides the perfect segue for Indian brands in their overarching "going global" strategy.
Drawing inspiration from the success of Indian born fast moving consumer goods (FMCG) brands and international beauty brands that have been able to rapidly build a strong customer base in the UAE, through Nysaa, Nykaa aims to tap into this exponentially growing market. By capitalizing on cultural sensitivities and the consumer demand for trusted brands, expansion to the UAE—especially Dubai—appears almost organic and natural for Indian brands. As the allure of obtaining a Golden Visa in Dubai increasingly attracts more Indian consumers to establish businesses in the UAE, Dubai is becoming a magnet for affluent Indians who are seeking respite from the inefficiencies of financial restrictions in India. By offering an attractive tax-free personal income scheme, Dubai provides a lucrative opportunity for individuals to diversify their financial portfolios and reap the benefits of financial freedom.
What Makes the UAE an Attractive Market for Indian Brands?
As a market that boasts the highest per capita spend on beauty, the UAE beauty and personal care market is expected to reach $1,218 million in 2024 alone. With an influx of new Indian residents continuing to pour into Dubai, many of whom will choose Dubai as their base and others commuting back and forth, there will be an increase in demand for brands and products that they previously purchased in India. This will open up a world of opportunities for Indian brands to diversify their distribution to include the UAE, particularly Dubai.
While engaging and resonating with customers whose likes and dislikes they are already familiar with will undoubtedly facilitate their entry into the market, the UAE also hosts a growing population of Britons, South Africans, Europeans, and Americans. Access to this diverse demographic landscape presents Indian brands with a dual opportunity. They can leverage their existing knowledge of Indian consumers to establish a strong presence in the market, while simultaneously be able to immerse themselves in the opportunity to understand and respond to the preferences of consumers from non-Indian backgrounds. This presents Indian brands with the ability to tailor their products and offerings to cater to a wide spectrum of consumer tastes including Indians with Indian sensibilities, Indians living abroad (NRI) who have spent a significant portion of their lives away from their home countries, and international customers from diverse global markets who are residing in the UAE. Additionally, it also allows Dubai and the UAE to act as a stepping stone in their global expansion plans.
Nykaa’s ambitious UAE expansion underscores the vibrant prospects that the market offers to Indian and global brands at large. Serving as a bridge between cultures, countries, and beauty ideals, Nykaa’s strategic decision reflects the evolving landscape of beauty without borders. As the UAE strives to offer a cosmopolitan environment and works continuously to make the region an attractive melting pot of cultures and individuals of varying ethnicities, the beauty and personal care market will remain ripe with opportunities for brands. Acting as a conduit between East and West, the UAE and Dubai in particular will retain its status as a prime hub for international trade and commerce, providing beauty brands from all over the world access to thrive in this flourishing market. Furthermore, the UAE’s strategic location makes it the perfect springboard for brands looking to enter new emerging markets such as Africa.
