The cosmetics industry has usually stayed shielded from the impact of an economic slump but it wasn’t spared by the pandemic this time. With lockdowns dominating most of the year, people’s desire to wear makeup has diminished rapidly. Just like any other industry today, the retailers had no option but to look for alternatives to grab their customers’ attention online.
Perfect Corp. made the most out of this opportunity by using their virtual beauty try-on technology and to take it to the next level, the company has raised a Series C of $50 million led by Goldman Sachs.
The Taiwanese company is best known for its beauty app YouCam Makeup that currently supports over 300 global brands including prominent ones like Estée Lauder and L’Oréal Paris. The company led by Chief Executive Officer, Alice Chang, was launched in 2014 and now has grown to about 50 million monthly active users. The company has rapidly expanded its offering from augmented selfies to live streams and tutorials by beauty influencers, and multiple social networking features along with a ‘Skin Score’ feature.
Their technology has applications for offline retail, e-commerce stores, and even social media. It worked with Google to create an AR-powered try-on feature for Google Search that debuted last month. Even YouTube used it previously for its makeup try-on features. Snapchat used their technology to integrate beauty try-on features into their app.
Perfect Corp.’s total capital has jumped up to almost $130 million with the latest round of funding. They previously raised $25 million Series A in October 2017. The latest infusion of funds is set to be used for developing technology for multichannel retail and kickstart more international offices, apart from the 11 it already has.
Xinyi Feng, Managing Director in the Merchant Banking Division of Goldman Sachs, stated, “The integration of technology through artificial intelligence, machine learning and augmented reality into the beauty industry will unlock significant advantages, including amplification of digital sales channels, increased personalization and deeper consumer engagement.”
Launch with GS, Goldman’s $500 million investment initiative to assist entrepreneurs across boundaries, will also witness participation from Perfect Corp.
Using facial landmark tracking technology, the company’s platform creates a ‘3D mesh’ over the users’ faces that makes their try-on views more realistic. Clarifying the major concern for privacy, the company’s Chief Strategy Officer, Louis Chen, affirmed that no user data, including photos or biometrics, is stored by the company.
90% of Perfect Corp.’s clients comprise of cosmetic or skincare brands while haircare, hair coloring, or other accessories being the rest. The ultimate objective of the company is to closely replicate the experience a customer could have while trying on the products at a retail outlet. To state an example, Chen said that their platform offers seven lipstick textures for the consumers to not just evaluate the color of the product but also the texture, like matte, glossy, shimmer, or metallic.
The demand for skincare has seen a substantial rise despite a dip in the sales for makeup during the pandemic. NPD Group, through a study in September 2020, discovered that American women are actually experimenting with more categories of products than they were doing the year before. This presents a great opportunity for brands to diversify and to capitalize on it, Perfect Corp. recently introduced a tool called AI Skin Diagnostic solution. The tool can be employed to flow down recommendations to the users through skincare websites. It helps grade facial skin on eight metrics such as moisture, wrinkles, and dark circles and has been verified by dermatologists.
Earlier, YouCam Makeup was a popular product among Gen Z shoppers who are more familiar with modern technology. But post the pandemic, all kinds of shoppers are dependent on this channel which requires brands to create platforms that are easy for everyone to adapt to. McKinsey’s report about the pandemic’s implications on the beauty industry says, “the use of artificial intelligence for testing, discovery, and customization will need to accelerate as concerns about safety and hygiene fundamentally disrupt product testing and in-person consultations.”
“Depending on the geography of the brand, in the past probably only 10%, no more than 20%, of their business was direct to consumer, while 80% was going through retail distribution and distribution partnerships, the network they already built over the year,” stated Chen.
Perfect Corp. has capitalized on the impact of the pandemic by offering its platform as a SaaS since beauty companies have no option but to invest more in their e-commerce divisions now. Moreover, it started offering additional features such as remote consultation tools that are helping beauty and skincare consultants to replicate the salon experience at home on a video call with their clients.
“Every single thing we are building now is not a siloed technology. It’s now always combined with video-streaming,” added Cheng.
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