Lights, Camera, EDIT
With 10 million monthly active users
in India, photo-editing apps are carving out a ₹100 crore market
Yet another girly app,” Panduranga MB, 26, told himself as he
tried Meitu’s photo-editing app, BeautyPlus. He had just taken a selfie on his
mobile phone and the facial recognition tech in the app allowed him to change
the sharpness of his nose, the shade of his skin, size of his eyes and remove
scars — basically anything to beautify his picture. A few minutes later, he was
hooked on to an app he hadn’t even heard of 24 hours ago.
The graphic designer from Bengaluru had downloaded the app after
Meitu Inc offered him a job. All he knew about the company was that it was a
Chinese developer with a stable of artificial intelligence-led beauty apps. The
app’s features reminded him of Photoshop, a graphics editor from Adobe widely
used by professionals like him. This was Photoshop for dummies. He knew a thing
or two about people’s obsession with sharing their photos on social networks —
95 million photos are posted on Instagram every day, and 100,000 are uploaded
on Facebook every minute. Several surveys have suggested over 50% of users edit
their photos before posting these online. “Users need these apps.” He did the
math and joined the company.
Like Panduranga, a lot of digital natives are oblivious of the
magnitude of Meitu’s user base. At last count, its apps — Meitu has over 15
photo-editing apps — have been downloaded on 1.2 billion devices across the
world. The company refuses to share country-specific numbers, but sources say
it has a user base of 100 million in India across platforms and devices.
Meitu is not the only success story in this space. Taiwanese
company Perfect Corp’s YouCam Perfect app is used by 15 million Indians every
month. PicsArt, a US-based photo-editing app, gets over 23 million monthly
active users from India. B612 and Sweet Selfie, beautification apps of South
Korean and Chinese origins, respectively, are other prominent members of this global
Android download club of 100 million. Closer home, approximately 10 million
users are trying out one or more of the 20 leading photo-editing apps on a
monthly basis.
However, the rapid rise of photo-editing apps in India has gone
largely unnoticed in the public discourse. This is despite there being at least
10 photo-editing apps among the top 100 free apps on Android.
Major tech players, however, sensed the potential in
photo-editing apps early on. Google acquired the photo-editing app Snapseed way
back in 2012. Motorola launched its own stock photo-editing app called Moto
Photo Editor last year. “At present, all handset makers are looking to include
AIled beauty mode in their camera phones,”
says Gaurav Nigam, product head at Lava International. A one-time
purchase of tech from these photo-editing apps can cost original equipment
makers anywhere between ₹2 crore and ₹5 crore.
There is nothing girly about them, either. A lot of app
developers in this genre say men contribute to over 40% of their user base.
Experts peg the market size for such apps at ₹100 crore in India. It is a business brimming with potential,
and India is a market these players cannot ignore.
Meitu, for one, counts India as its biggest overseas market. In
China, Meitu is a proprietary eponym: the company’s gamut of 20 products
include selfie phones, selfie-editing apps, and photo- and video-sharing
platforms. Together, they fetch Meitu 300 million monthly active users (MAUs)
in mainland China, according to the listed company’s annual report of 2017-18.
Outside China, it has over 110 million MAUs. “We are competing against Snapchat
and Facebook. I’m not saying it, the numbers are,” says Priyanka Sharma,
Meitu’s India business development manager.
Meitu’s India journey started in July 2016 with the launch of
BeautyPlusMe, now rebranded as PlusMe. It’s a 3x lighter version of Meitu’s
flagship photo-editing app, BeautyPlus, and meant for users in tier-2 and -3
India who can’t afford to download a 48MB app on their phones. PlusMe became
India’s most trending app on Android that year. Then, in 2017, the company
launched BeautyPlus in India, along with other popular beauty apps such as
MakeupPlus and AirBrush. BeautyPlus now ranks 30th on Play Store’s Top Free
Apps chart in India, much ahead of cab aggregators such as Ola and Uber,
hyperlocal majors like Swiggy and the one-time-millennial-favourite Snapchat.
Globally, market research company App Annie ranked BeautyPlus among the top 8
non-gaming apps on iOS for three consecutive years from 2014.
Sharma says a lot of her friends from school use BeautyPlus.
They don’t go public about it, though. She figured this out when some of them
forgot to remove the app’s watermark from their pictures. That’s the challenge
in India, she says. People don’t want to openly talk about using these apps.
“They post edited pictures of themselves but want their friends and followers
to believe that ‘this is how I woke up’.”
Marketing beauty apps in India is a challenge, says Vinita
Joshi, Meitu India’s former marketing manager. “They’ll use it in private and
abuse it in public.”
BeautyPlus has tried to tackle this challenge by roping in
celebrities like Shilpa Shetty to post pictures using its filters. It also
introduced popular movie filters, such as the royal look of Deepika Padukone
from Padmaavat for women and the gory but powerful appearance
of Ranveer Singh from the same movie for men.
“This is only a means to retain and refine the user base,” says
Sharma.
Most of these apps spend next to nothing on customer
acquisition. Rajat Gupta, head of growth marketing at Times Internet (it is
part of the same group that brings out ET Magazine), had led the
launch of B612, a selfie-editing app, in 2014 when he was working with the
mother brand Line Corp. “People took to B612 because it allowed them to edit a
photo by showing filters even before you clicked the picture.” There was no
budget set aside to promote B612. His mandate was to promote Line messenger
(which was endorsed by actor Katrina Kaif ). Everything else was in the
periphery.
Four years hence, Line messenger is long forgotten, while B612
is one of the top five photo-editing apps in India. For those wondering about
the name, B612 is the asteroid from the famous French novella, The
Little Prince. “The product manager had read a lot of fantasy stories in
his childhood,” quips Gupta.
The realisation that there was no competition in the men’s
segment in the photo-editing app world made Bengalurubased developer Sunitha
Gadigota look at the space. In December 2016, she launched Hairy — a hairstyle
editing app for men. Today, it is the fourth-most popular photography app in
India on Android. Men in tier 2 and 3 towns sometimes download at least two
photo-editing apps, says Lava’s Nigam. Some of these downloads happen because
entry-level smartphone users from small towns are not able to go back to
default settings on the first app. Gadigota’s company Pixel Force runs several
other photo-editing apps for both sexes. She earns ₹3 crore annually from in-app
advertising, her only revenue stream.
Monetisation strategies have not evolved in proportion to user
growth in this category.
Meitu has failed to turn in a profit in the decade since its
launch in China. It did reduce its losses to $7 million last year, down 91%
compared to the previous year. The company still intends to “focus on user
growth, retention and marketing” for its products in India.
US-based photo-editing apps such as PicsArt and VSCO rely on a
second subscription-based app to make money. PicsArt has PicsArt Gold while
VSCO has VSCO X (VSCO X alone has over a million paid users globally). “We
surpassed one million paid users faster than subscription-based businesses like
Spotify and Slack,” says a VSCO spokesperson. India forms 1% of VSCO and VSCO
X’s user base.
Another company trying to cash in on its add-on app is Perfect
Corp. It uses its app, YouCam Makeup, to create a shopping ecosystem that
brings beauty brands closer to customers. There are two ways these apps can do
that: by sharing their tech with brands for in-store demonstration — which
helps users see how several makeup products will look on their skin without
manually trying them on — and by roping the brands into the app’s interface and
have users try on their products through the app’s AR-VR muscle.
In-app demonstration helps a brand reach out to aspiring
customers beyond metros. “You can’t have a MAC store or a shop selling
authentic Bobby Brown and Avon products in, say, a city like Lucknow, but you
can have YouCam Makeup app anywhere,” says Tanuj Mishra, India director of
business development for Perfect Corp.
YouCam Makeup has 3.5 million MAUs in India. At present, L’Oréal
is using its virtual try-on technology. The Paris-based company also acquired
ModiFace, an AI-based makeup app, recently.
A lot of photo-editing apps have a secondary makeup app that
they don’t focus on when it’s actually the one that can make them profitable,
says Gurgaon-based Mishra. Meitu is also banking on its second app Makeup Plus
to kick-start monetisation in India.
French cosmetic products chain Sephora has seen a 30% conversion
rate for users who try products through its Virtual Artist app, says Vivek
Bali, COO at Sephora India. “We should be launching it in India soon.”
Internationally, these apps have become the way of doing
business in the beauty industry, says Nykaa founder Falguni Nayar. It’s a
relief when you don’t have to wash your face every time after you’ve tried a
makeup product. You just have to hit reset on your phone or a tablet in a
store.
However, virtual tech has its limitations. Ultimately, it’s a
photo showing how a product may look on you. For many users, it is a
shortlisting engine at best. That said, it is critical to most players in the
beauty segment, says Maneesh Mittal, chief of omnichannel at Shoppers Stop. The
retailer is actively working with a few photo-editing apps to roll out pilot
projects, he adds.
Since freemium revenue is a challenge, perhaps commerce is the
next logical step for these apps to monetise their large user base.
Shephali Bhatt
ETM29JUL18
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