Hey folks, welcome back to Paradox Weekly.
Last month, Nykaa crossed ₹10,000 crore in revenue for the first time.
She is right, you do trust Nykaa.
You trust it more than the chemist, more than a brand's own website, more than the salesgirl at the counter who earns a cut on whatever she can push.
That trust is the most valuable thing Nykaa has ever built.
It is also, the most profitable thing it now sells.
Let me explain.
Think about how you actually shop there.
You want a vitamin C serum, or a perfume, or a face wash you have not tried.
You do not read every label.
You glance at what sits near the top, what is wearing the "bestseller" tag, what has four-and-a-half stars and ten thousand reviews.
And you trust that the order on your screen means something because it feels like a choice “you’ve” made.
Falguni Nayar built Nykaa in 2012 on exactly that feeling.
A clean, honest shelf in a market full of fakes, expired stock, and counters that pushed whatever paid the fattest commission.
In 2015, three years in, Nykaa launched its first in-house brand.
The shop you trusted to stay neutral had stepped down onto its own shelf, and stood next to the brands it was helping you choose between.
For years that barely mattered but in 2026 it’s a different story.
Last year, Nykaa's own brands grew 49% to ₹3,176 crore, while the platform around them grew 28%.
The slice Nykaa owns is compounding more than twice as fast as the slice it rents to everyone else.
And you already buy these brands without realising they are Nykaa's.
Dot & Key, their largest skincare brand, is now running at an annualised GMV of more than ₹1,500 crore.
Kay Beauty, the makeup line Nykaa built with Katrina Kaif, has become one of the company's biggest beauty brands.
Its perfume label Moi is now the #1 non-luxury perfume brand on Nykaa
Nykaa does not even like calling these private labels.
It calls them "owned brands," because, as Adwaita Nayar put it, private labels carry "the connotation of being cheaper."
These are designed to feel like brands you would have picked anyway, and Nykaa keeps far more of every rupee when you pick them.
By Adwaita Nayar's own account, an owned brand earns the company a gross margin of 65 to 80%.
The same sale of a brand it merely stocks for you earns 40 to 50%.
To be more explicit: the company said that its profits rose because its recommendations were increasingly pointing at itself.
And this isn’t hidden, in fact they are proud of it.
And they should be because it is a beautiful piece of business.
Amazon used the data its own sellers handed over to copy their best products and slide its in-house versions to the top of search (AmazonBasics).
Reuters exposed it in India in 2021, and the EU eventually forced Amazon to sign binding promises to stop.
Amazon's whole problem was that it needed something it was not supposed to touch which was the seller's data.
Nykaa needs none of that.
It already holds the thing Amazon was reaching for, handed over freely, years ago.
Your trust in the ranking.
It only has to place its own bottle where you have already been trained to believe the best one lives.
None of this is new, and none of it is illegal.
Store brands are older than e-commerce.
DMart was built on them, Reliance leans on them, and half the reason anyone keeps a Costco card is a tub of Kirkland.
A good one is often genuinely cheaper than the brand beside it, which is a real gift to whoever is paying.
Some of Nykaa's brands were bought and the company says they win on merit and that it does not tilt the shelf.
That can all be true but the conflict still sits there, every single time you open the app.
Nykaa is now pushing these brands off its own app and onto every other shelf in the country through it’s offline network, and there’s where the conflict rises.
Every "bestseller" or "recommended for you" tag or product that floats to the top of your search is answering a question on your behalf.
For twelve years, that question was roughly: what is best for me?
But the question now is: what is best for Nykaa?
The most valuable thing in Indian retail was the half-second where you trust it.
Nykaa spent twelve years earning that half-second from you, fairly and brilliantly, and it has now become the most profitable thing the company owns.
It is the business model finally working exactly as designed.
The only mistake left to make is yours, if you keep believing the shop that sells its own brand will still tell you, on the day its own brand is not the answer.
I think Noice and Nykaa brands didn’t get into trouble because they had great products that customers love or would be happy to repeat and not just copycats the way Amazon approached it.
Hit reply: Have you bought a Nykaa brand before without knowing it’s owned by them?
I read every email.
Until next week,
Pratham