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In this interview with TechBullion, Alice Chang, the visionary CEO of Perfect Corp., shares her journey from co-founding CyberLink to pioneering the AI and AR-driven transformation in the beauty industry. Perfect Corp., spun off from CyberLink in 2014, has grown into a global leader with innovative solutions like YouCam apps and AI-powered virtual try-ons for makeup and skincare. The company serves over 700 beauty and fashion brands worldwide, leveraging cutting-edge AI technologies to enhance online shopping experiences.
Alice discusses the company’s growth trajectory, driven by increasing demand for both B2B and B2C AI solutions. With a robust focus on skincare diagnostics and GenAI features, Perfect Corp. continues to expand its market footprint while driving sustainability through digital innovations. She also highlights the strategic investments in AI development and potential M&A opportunities aimed at sustaining momentum in a rapidly evolving market. As Perfect Corp. anticipates revenue growth of 12-14% in 2024, Alice remains optimistic about leveraging AI to meet rising consumer expectations for personalized beauty experiences.
Please tell us more about yourself.
Hello, I am Alice Chang, the founder, CEO, and Chair of Perfect Corp. I was born in Taiwan and earned a degree in Business Administration from National Taiwan University. I later attended UCLA’s business school, where I met my husband. After returning to Taiwan, I worked as an investment banker at Citigroup and also taught computer science. In 1997, my husband and I co-founded Cyberlink, a company that provided software preloaded onto 90% of global computer shipments.
As the PC market matured in 2014, I helped create YouCam Perfect, a free app that allowed users to edit their photos. Due to the app’s success, I led a team of 80 employees to spin off the group from CyberLink and formed Perfect Corp. Today, Perfect Corp. has grown to over 330 employees and serves over 700 beauty and fashion brand clients worldwide, offering services such as virtual try-ons for make-up and Skincare analysis. Today, YouCam’s suite of apps has around 1 million paying subscribers and it continues to grow nicely.
Our goal is to address the pain points of both brand clients and consumers, helping them achieve their vision of beauty. Our AI and AR technologies are designed to provide a personalized and enjoyable online shopping experience.
Your Q3 2024 financial results show steady revenue growth, particularly in AI and AR solutions. Could you elaborate on what’s driving this demand and how Perfect Corp. plans to sustain this momentum?
For AI and AR solutions there are additional opportunities in both our B2B and B2C segments. Over the past few quarters, our B2C business has become the biggest growth driver for Perfect Corp and has seen sustained growth in paying subscriber numbers which underscores the enduring global demand for AI photo and video editing, creation, enhancement, and beautification features, spanning all age groups and geographies.
With regards to our B2B business, although the overall macroeconomic rebound has not yet materialized, as evidenced by the weaker-than-expected performance from our brand clients year-to-date, we see encouraging signs that give us optimism for future growth in the B2B segment. We remain confident in our ability to collaborate closely with our clients as they prepare for the upcoming rebound in growth and investments.
We continue to invest in AI technologies to reshape the landscape and drive innovation and efficiency in the beauty and fashion industries. Over the past few years, we have expanded into the skincare sector, which has a greater addressable market compared to the makeup sector. We made significant strides in expanding our portfolio with AI-powered skin diagnostics. Our skincare AI initiative positions us strategically in a skincare market that is projected to grow significantly in the next few years, driven by increasing consumer awareness of skin health and the pursuit of better skin and aesthetic beauty.
At the same time, we are in discussion with large enterprise clients for PerfectGPT, which focuses on the beauty and fashion industry. Given the direction of AI, we foresee PerfectGPT as an AI-powered personalized beauty assistant that will become a standard feature on all brand websites in the future.
With over $163 million in cash reserves, what are the company’s primary investment areas or initiatives for the coming year? Are there specific technologies or markets you’re looking to expand into?
The company generates cash on a quarterly basis and is cash flow positive. This financial strength allows us to invest in sales and marketing initiatives for growth in the coming quarters, as well as in research and development to drive our expansion over the next few years.
We are committed to investing in AI technology development to enhance our core capabilities. Our software leads the way in creating innovative GenAI solutions that improve user experience and streamline operations in the beauty and fashion industries. We expect healthy growth as our cutting-edge technologies attract new clients and expand our market reach across both existing and new verticals. By prioritizing research and development in AI, we are well-positioned to meet our customers’ evolving needs and seize emerging opportunities in the beauty and fashion landscape.
Management is also open to synergistic mergers and acquisitions that could help increase our revenue and markets from the current level. We will explore all potential opportunities and will keep the investment community informed as new developments arise.
Perfect Corp. has maintained a stable base of key customers. What strategies are in place to both retain existing clients and attract new ones, especially as competition grows in the AI-powered beauty and fashion tech sector?
Our competitive advantage stems from our deep understanding of key pain points faced by our brand clients and consumers. Our YouCam suite of apps has consistently grown in paying subscribers over the past few years, highlighting the ongoing global demand for AI-driven photo and video editing, creation, enhancement, and beautification features, spanning all age groups and geographies. Our suite of AI YouCam mobile apps continues to receive regular updates and feature enhancements, incorporating innovative digital solutions powered by cutting-edge AI technologies for photos and videos.
One example can be found in our YouCam Video app. With Thanksgiving approaching, we have introduced new video editing features that allow users to create personalized holiday family videos. YouCam Video enables users to add animated filters, music, text, and preset festive elements, along with a filter that overlays the video giving a warm and special touch to holiday messages and memories.
We also offer tailored solutions for brands, as well as a self-service skin analysis platform for non-medical aesthetic clinics. Our software solutions have consistently demonstrated the ability to boost customer engagement, increase sales conversion, raise average order values, and reduce return rates.
Sustainability and social responsibility are key components of Perfect Corp.’s identity. Could you discuss any recent initiatives or commitments that highlight these values within the organization?
Our partnership with brands has yielded positive results from an ESG perspective. For example, by using virtual try-on hair color simulation, one brand reduced the use of plastic by up to 56 tons annually, eliminating the need for physical hair color and hair manicure samples. This innovation not only helps brands offer better products and services but also contributes to a more sustainable future for both consumers and society.
Eco-friendly digital solutions provide a unique and engaging shopping experience while eliminating the need for physical product samples, helping to preserve the planet’s resources. Virtual try-on technology is already available across several product categories, including makeup, hair color, and nail polish, with more categories to be added in the future. Going digital is one of the most effective ways for individuals and businesses to adopt more sustainable practices.
With a forecasted revenue growth rate of 12-14% for 2024, what external market conditions or internal strategies do you believe will most influence your ability to achieve this target? Are there specific challenges you’re anticipating?
Our YouCam suite of apps has been a key driver of revenue growth over the past few years. This success is largely attributed to the continuous introduction of new enhancements powered by GenAI, including features like AI Avatar, AI Fashion, AI Hairstyle, AI Selfie, AI Headshot, AI Studio, AI Color, and advanced AI photo and video editing tools. These innovations offer users sophisticated options for beautification and enhancement, setting new standards in digital creativity and demonstrating our commitment to ongoing innovation. Additionally, we leverage real-time data on app usage to quickly adapt and refine features based on user behavior and Feedback.
Despite headwinds in our B2B business, we are seeing strong momentum as we approach the final quarter of 2024. We expect to continue renewing contracts with existing brand clients while expanding our presence in the skincare sector. We have made significant progress in expanding our portfolio with AI-powered skin diagnostics, and our Skincare AI initiative positions us strategically in a market projected to grow rapidly in the coming years. This growth is driven by rising consumer awareness of skin health and the increasing demand for improved skin care and aesthetic beauty.
To read more about Perfect Corp. (NYSE: PERF), click here, or tune into their “Beautiful AI” podcast on Apple or Spotify.
