Siqi Mou was in college when her skin started to change. Acne popped up on her face and she experienced redness and sensitivity. But when she tried the same products her friends used--the ones they swore worked for them--she didn't see the same results.
"Why is there no personalized solution? It's always one size fits all," Mou, now 29, says she recalls thinking at the time. "Even if you walk into a Sephora and try to figure this out yourself, a lot of the time it will end in trial and error and a lot of wasted product that didn't work well on you."
Years later, while she was working in Indonesia as a news anchor for Bloomberg TV, a local beauty company asked Mou to star in one of the brand's commercials. On the advice of her mother, she researched the products' ingredients and found they were made with harsh chemicals that could be detrimental to her skin. She declined the offer and continued to ponder the holes in the cosmetics industry--until 2016, when she actually did something about it. Today, she runs a New York City-based personalized beauty products recommendation business called HelloAva. With about 40,000 customers across the U.S., her fledgling startup generated $350,000 in sales last year. It's now on track to more than triple that amount by the end of 2018.
"It's been kind of an overwhelming experience and at the same time I'm really excited that we are seeing so much demand," Mou says. "I think that's the beauty of being in startup versus being in a big corporation--you see every single immediate result from your effort you put in."
Brains and beauty
HelloAva doesn't make its own products. Instead, it acts like a beauty consultant by helping clients find the right products for building a personalized skin care regimen. Customers start the process by filling out a questionnaire about their skin and sending a selfie to the company's chatbot on Facebook Messenger, text message, or a desktop computer. The system also asks customers which products they are interested in and any problems they want to address, like wrinkles or dark spots.
HelloAva's algorithm selects an array of products, and then a licensed aesthetician confirms the choices before sending the customer to the checkout page. Customers are typically given two options for each skin care category they select, including moisturizer, eye cream, toner, and face wash. Users can also chat with aestheticians if they have any questions about the recommendations and the company's skin advisers will follow-up with clients two weeks after a purchase.
The secret ingredient, says Mou, is HelloAva's A.I. technology, which she says uses reference data on other clients from similar age and demographic groups. It'll also keep tabs on each customer's past conversational history with the company and recent purchases. Its database now contains more than 2,000 products, representing 80 brands, which Mou says may soon scale into vitamin and supplement companies. That growth has helped convince the likes of Danhua Capital, First Cut Ventures, and Long Capital Ventures to invest $1.5 million in the company.
"What a company like HelloAva is doing--and the value it are providing--is tapping into the growing demand for e-commerce," says IBIS World retail industry analyst Anya Cohen. She adds that there's a high level of confusion online about which products someone should buy. "HelloAva is providing a space and a service to consumers who want a little more direction."
HelloAva is not the only ones. IBIS doesn't differentiate beauty tech companies like HelloAva from others, but the market for the beauty industry overall is growing rapidly. It's expected to jump to $27.8 billion in 2022 from $22.1 billion in 2017. Much of that growth is coming from beauty tech companies, affirms Cohen.
That can be a mixed blessing, says Cohen. HelloAva competes with brands like Proven and Beauty by Design, which make bespoke products for individual customers. So they might be missing out on customers who want to buy actual personalized products, and for whom recommendations may not be enough.
As for Mou, the struggle of battling bad skin has paid off. "If I had never gone through this experience, I would have never figured this out," Mou says.