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Informist, Tuesday, Nov. 12, 2024

By Aman Aryan

MUMBAI – The elevated retailer-funded discounting in the beauty category on horizontal platforms is expected to moderate over coming months and year, FSN E-Commerce Ventures Ltd.'s management said in a post-earnings conference call Tuesday. The aggressive discounts in the beauty category are due to an expected softness in the growth of their other core categories, the management said.

Unlike retailers, the beauty brands have already moderated their discounts meaningfully and are against the retailer-funded discounting on their products as it tends to commoditise the category in the long-term, the management said. The company's beauty vertical posted a strong performance in the September quarter with a 29% on-year rise in its gross merchandise value and 24% on-year rise in its revenue for the quarter. 

However, the company said its fashion vertical's performance was subdued in the first half of the current financial year due to a seasonal weakness, as most festivals and the wedding season are concentrated in the latter part of the year. While the fashion vertical's gross merchandise value grew just 12% on year in the first half, its revenue grew 22%. For the September quarter, the company's fashion vertical posted 10% on-year growth in gross merchandise value and 22% on-year growth in its revenue.   

Even though the company has been adding new customers, the cost of customer acquisition for the beauty vertical has not gone up, the management said. The additional cost incurred was due to the company adding new customers at an accelerated pace, the management said. The second edition of Nykaaland, a flagship event of FSN E-Commerce, was a "resounding success" and saw a footfall of 25,000, the company said. This beauty festival is a category-building or an upper-funnel activity for the company as it creates brand awareness and the cost of the festival is recovered from the brand partners and sponsors, the management said.  

FSN E-Commerce's management said with the newly launched "Foot Locker" website, the company has come up with the ability to roll out more ".com(s)", or websites, for its brand partners. "The first one has been executed with footlocker.in. and similarly, even entire Nykaa tech stack is being developed by Nykaa's tech team...," the management said. 

FSN E-Commerce reported its September quarter earnings Tuesday post market hours. The company's consolidated net profit was INR 100.4 million for the latest quarter, up 71.6% on year. The company's consolidated revenue rose 24.4% to INR 18.75 billion for the September quarter. Tuesday, the shares of the company closed at INR 177.81 on the National Stock Exchange, down 2.8%.  End

Edited by Akul Nishant Akhoury

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