You Can Try Makeup Online Before You Buy It, Thanks To This Woman Entrepreneur

Software entrepreneur Alice Chung has convinced most of the beauty world to offer her virtual try-on technology to shoppers. Now his public company is looking for opportunities in jewelry, apparel, and even plastic surgery and dentistry.

I9:30 am And Alice Chung dressed in her favorite hot pink for the day, but didn’t bother with makeup. She enters her office in a high-rise in Taipei with pink walls, a large portrait of a pink rose and a framed photo of Audrey Hepburn. With the click of a button, she applies a full virtual make-up including pink lip gloss, blush and lilac eye shadow. So persuasive that no one on the other side of his video sessions will be the wiser that day.

Meet the godmother of virtual makeup. Chang, 60, is the creator of virtual try-on technology that has been adopted by beauty giants such as Estee Lauder, Shiseido, Chanel and Revlon. Shoppers who previously had to guess what shade of lipstick, foundation or eyeshadow would suit them are increasingly able to test options online and in stores before buying.

“We let them know exactly what product is best for them,” Chang said, running his fingers through his long black hair. “Instead of having to try, try, try. Or buy and then come back.”

His company, Perfect Corp., has quickly become a dominant player in virtual testing technology, a growing area of ​​investment for retailers seeking increased sales and lower rates of return, especially for online shopping. Backed by $130 million in funding from investors such as Goldman Sachs, Snap, Alibaba and Chanel, the seven-year-old company has trained its technology on hundreds of millions of users, who have used its technology to complete billions of virtual tests.

Perfect Corp’s client list includes 17 of the 20 largest beauty companies in the world, covering more than 450 brands. “He owns 85 percent of the top major companies,” says Piper Sandler analyst Clark Jeffries. “Normally, you don’t get that kind of market share this quickly.”

Tech giants such as Meta, Google and Snap also license his technology to allow users to purchase products on their platforms. 19 million customers, a small fraction of whom are paid subscribers, use the company’s virtual trial and photo editing programs. In total, subscription fees have generated annual revenue of $47 million over the past 12 months, with a rich gross margin of 85 percent.

After braving rocky public markets and continuing her SPAC in October, which briefly valued Chang’s 14 percent stake at $250 million, she’s eyeing opportunities beyond makeup. The next step: presenting the product to hairdressers, clothing brands and even plastic surgeons and dentists.

CHang was born in Taiwan in 1961, in the middle of a decade of martial law, and his parents served in the military before becoming government bureaucrats. “It was a very normal family,” she said. His parents expected him to become a teacher, but instead he studied business administration at National Taiwan University and worked in a bank. She started wearing suits for the first time in her life and experimented with makeup, trying to teach herself in an age before YouTube videos. Her mother, who did not wear make-up, did not help.

Still unsure of what she wanted to do, Chang went to UCLA for business school in 1986, where she met her husband Zhao Huang. They returned to Taiwan together, where he took an investment banking job at Citibank and she became a professor of computer science. Two years later, he joined antivirus software company Trend Micro to help them restructure and prepare for an IPO. He took over not only finance, but also operations and marketing.

In 1997, he took an 80 percent pay cut to start an entrepreneurial venture with his wife, CyberLink, a rare software company in a country known for making computer chips and other hardware. They created a program called PowerDVD that ended up being the default software for much of the world to watch DVD movies on their computers. The pair won business from PC giants such as Dell, HP, Lenovo and others, and eventually their software came preloaded on 90 percent of PC shipments worldwide. Chang served as CEO for 18 years, taking the company public in 2000 and expanding into other types of multimedia software, such as CD burning methods and photo editing. Annual sales increased to $150 million in 2010.

However, as PC sales began to decline, Chang wondered how his company could expand into smartphones. She had become increasingly interested in taking selfies to share with her friends and family, but there was no good way to touch the images. In 2014, he created a free app called YouCam Perfect that allowed users to “perfect” their selfies by whitening their teeth, removing zits or removing dark circles under their eyes. In its first year, it achieved 17 million downloads despite zero marketing.

“The more you try, the more you buy.”

Alice Chang

The request was being approved. “I believe that the search for beauty is the fundamental desire of every human being,” Chang said. He released a second app, YouCam Makeup, which was also free and allowed users to add lipstick, mascara, eye shadow and other virtual makeup to their photos.

However, the fledgling business was still trying to figure out how to monetize its growing success. In 2015, Chang took 80 employees (mostly engineers) and spun off the company from CyberLink, naming it Perfect Corp. He began pitching the technology to beauty brands and made 19 trips to New York, Paris, Tokyo and Shanghai in one year. It insisted that it could increase sales by giving shoppers more confidence to press the buy button.

“If you try harder, you’ll buy more,” Chang said. “It solves every beauty lover’s pain point.”

MWomen Everyone is aware of the pain points he points to. For example, I’ve been dragging my feet on buying a new foundation for months. While I had chosen a product after doing some online research, I knew I still needed to go to the store and ask a salesperson for help in finding the right shade. So I put it off. Then, while reporting this story, I started playing with Clinique’s virtual testing tool. He asked for access to my camera and asked if my skin had warm or cool undertones. I had no clue, so I offered a hint: If the veins on your wrists look greener and you look better in gold jewelry, your skin is warm. If your veins are more purple and you like silver jewelry, that’s great. it’s warm.

Seconds later, she posted a recommendation for my perfect shade (bone) and two accompanying lipsticks (blush and hot red). I checked my before and after pictures on my screen and without a second thought, added both products to my cart. The promise of free samples with my purchase, plus free shipping, sealed the deal.

Many buyers are impressed. Clinique says people who use its virtual trial tool spend four to five times more time on its website and are 2.5 times more likely to make a purchase. The value of the order has increased by 30%.

Jeremy Harris, Clinique’s chief technology officer, said in a company case study posted on its website that the tool is “very real” and shoppers actually enjoy using it.

This kind of comeback has prompted hundreds of brands to add virtual try-on options to their stores and websites in recent years. Nares found that shoppers using the tool tried an average of 27 lipsticks, which helped quadruple conversion rates. After Benefit Cosmetics allowed shoppers to play with the look of their brows—higher the arch, adjust the thickness or lighten the color—the number of people who bought a brow product increased by 113 percent. Aveda found that traffic to the site’s locator increased fivefold after people tried on different hair colors virtually.

This technology has also made its way to stores. Estee Lauder has installed 8,000 smart mirrors around the world where shoppers can see their reflection and easily try on different products. Previously, customers were limited to trying on a few colors on their arm with the help of a sales associate.

The push to create more personalized online experiences for shoppers accelerated during the pandemic when stores were closed, but it’s increasingly become what shoppers expect. According to InsightAce Analytic, a market research firm, beauty brands spent $2.7 billion on AI technology in 2021, which is expected to increase to $13 billion in 2030.

“Now it’s like a table,” Chang said.

Perfect Corp. Advantage It lies in its face tracking technology, which creates a 3D web by identifying 200 facial features in real time. That is, the user can turn his head and the makeup remains in place. Its technology can detect more than 90,000 skin tones, which it says makes it the most comprehensive in the industry. It has more than 500,000 products in its database and can display different textures such as glossy or matte.

“It’s not something anyone can replicate overnight,” Chung said at a conference last year.

The company actually faces little competition. Its closest competitor, ModiFace, was acquired by L’Oreal in 2018. Ulta Beauty has also developed its own experimental tool called GlamLab, but it looks more primitive.

Privacy concerns lurk because the company handles sensitive information about people’s faces. Perfect Corp.’s technology has been the subject of numerous lawsuits alleging that its customers are collecting biometric data from users without their consent. Spokesperson for Perfect Corp. It said the company cannot comment on ongoing litigation as a matter of company policy, but is committed to protecting personal data and has never sold data to third parties.

Economic headwinds are also coming. Many companies are cutting costs ahead of a potential recession, which could mean Perfect Corp has trouble convincing new and existing customers to approve new spending on its technology. Piper Sandler analyst Jefferies said the stock has been a tough sell and investors worry the company’s growth will slow as the economy worsens, e-commerce costs normalize and consumers pull back on spending. That has weighed on the stock, with Perfect Corp. shares losing a third of their value since the company went public.

However, the company expects sales to reach $100 million by 2024. This forecast assumes that existing customers will add more products from sister brands. It is also trying to attract business from smaller, independent beauty brands.

He also sees an opportunity to grow in new verticals. For example, it is considering expanding into plastic surgery and dentistry, where it can help patients see what they will look like after various procedures such as a nose job, brow lift or lip fillers. With regards to marketing materials, this not only helps drive sales, but can also help increase customer satisfaction by setting expectations in advance.

Chang asks if I’ve seen the recent announcement about its launch into jewelry, which allows users to try on rings, bracelets, watches and necklaces. He said: It is one thing to see a product on a model and another thing to see it on yourself.

Empowering shoppers to preview purchases before they pull the trigger will drive sales and thus become a regular part of online commerce, he says. No need to guess, visit the store or consult with a salesperson. “It democratizes the decision-making process,” Chang said. “Let them try and let them decide for themselves.”

More information from FORBESGoldman Sachs-backed virtual beauty app developer goes public with $1 billion SPAC deal


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