Bengaluru, June 14 -- Ask a beauty shopper where they would buy a Charlotte Tilbury lipstick or a Rare Beauty blush, and chances are Nykaa will feature on top of the list. Ask the same shopper where they would buy a dress, and the answer is far less predictable.

For years, this gap in consumer perception has defined the challenge facing the company's fashion marketplace, Nykaa Fashion. While the company's beauty business became synonymous with reliable cosmetics and global brand launches, its fashion arm struggled to become the first destination consumers thought of when shopping for apparel.

But for the first time in a while, there are signs the vertical may be making progress.

Fashion's gross merchandise value (GMV)-the value of all ...