AI is Transforming the Beauty Industry

Haut.AI, the creator of SkinGPT, a generative AI platform, and a hair analysis SaaS, has secured €2 million in external funding from strategic investors LongeVC and the venture capital division of Grupo Boticario’s shareholders. The fundraising is intended to aid Haut.AI in broadening and growing its no-code software for personalized skincare e-commerce and advancing research and development in multimodal generative AI specifically designed for skin analysis. In recent years, international beauty industry giants have increasingly invested in AI. How will AI impact the beauty industry?

Enhancing the overall product shopping experience to be more precise and effective

Estonia-headquartered Haut.AI, a European startup specializing in generative AI, is leading innovation in beauty and skincare intelligence tools like Skin and Hair SaaS, alongside SkinGPT. Today, they announced securing €2 million in seed funding from LongeVC, a venture capital firm focused on biotech and longevity, as well as the VC division of Grupo Boticário shareholders—a globally renowned beauty conglomerate. This funding aims to aid Haut.AI in extending and amplifying its no-code skincare e-commerce personalization software, with research and development concentrated on multimodal generative AI specifically tailored for skin analysis.

Allegedly, this technology holds promise in identifying skin concerns in their early stages and suggesting tailored remedies. It also can provide analogous solutions for maintaining healthy hair. Moreover, generative AI shows the potential to significantly improve the accuracy and efficiency of the entire shopping experience within these specific product categories.

Haut.AI states that the company offers highly personalized skincare and beauty experiences. Its SaaS platform has been trained on 3 million image data points and can assess over 150 unique multi-dimensional facial biomarkers, enabling interactive, tailored aesthetic recommendations—simply from a quick snapshot selfie. The Haut.AI platform has been utilized by leading global beauty, skincare, and pharmaceutical brands, including Beiersdorf and the largest beauty retailer in the United States, Ulta Beauty.

As early as May this year, Haut.AI introduced SkinGPT, a virtual skin care trial platform capable of simulating image-to-image transformations for any skin condition based on clinical assertions. Haut.AI also employs generative AI to scrutinize its system for biases, addressing challenges commonly encountered in data sets by many tech companies.

The new SkinGPT skin simulation platform from Haut.AI enables users to upload their photos. Generative AI utilizes these images to create synthesized visuals, predicting how an individual’s skin might change over time, under various conditions, and with the use of different skincare products.

Anastasia Georgievskaya, co-founder and CEO of Haut.AI said, “At Haut.AI, we’re not just enhancing skincare commerce with generative AI—we’re redefining it. We’re democratizing access to precise skincare analysis, ensuring our partners can serve everyone, regardless of age, gender, or geography. We envision a world where skincare isn’t about guessing; it’s about brands understanding the uniqueness of their customers shopping online and delivering a data-driven experience that benefits both brands by increasing sales and customers who get better value for money.”

Paulo Braga from Grupo Boticário’s shareholders’ VC arm said: “In Haut.AI, we see not just a startup but the future of skin wellness. Anastasia and her team have a compelling vision and the technology to back it. The way people buy cosmetics online today is similar to the experience of buying electronics or books but the customer journey is far from being equal. We’re excited to be part of their journey.”

In the list of the 10 beauty technology innovations to watch curated by Cosmetics Design, Haut.AI secured the second position. Moreover, several of these top ten innovations showcase the advancements of AI within the beauty industry. This underscores the likelihood that in the future, AI will become an indispensable driving force within the beauty sector.

Beauty giants accelerate their deployment of AI

In fact, in recent years, international beauty giants have significantly increased their investment in technology, especially in AI, aiming to enhance consumer experiences from production to final consumption.

As a global leader in the beauty industry, L’Oréal set the strategic goal of becoming a global “beauty tech company” as early as 2018. AI has been a focal point of L’Oréal’s attention.

In June this year, L’Oréal invested in Rembrand, an AI-driven embedded advertising platform. Rembrand’s generative AI technology, based on big data and deep learning, autonomously generates realistic visual content. Through intelligent algorithms, Rembrand seamlessly integrates products into audiovisual content, making them appear naturally connected to the storyline. This seamless product placement not only avoids disrupting the audience’s viewing experience but also enhances brand exposure and memorability.

Rembrand’s uniqueness lies in the innovation and scalability of its generative AI technology. This technology adapts to various forms of audiovisual content, whether it’s movies, TV shows, or online video content, enabling efficient product placement. This enables brands to better connect with their target audience and build a positive brand image among viewers.

At this year’s Import Expo, L’Oréal showcased 17 beauty tech products for the first time, the most in its history, including four making their debut in Asia.

L’Oréal introduced several technological advancements in the realm of beauty tools, including the Paris K-SCAN AI Smart Analyzer, Armani Beauty’s Meta ProfilerTM Skin Microscope, Shu Uemura’s 3D shu: brow Smart Beauty Device, and L’Oréal’s HAPTA Ultra-Precise Smart Makeup Applicator, the world’s first handheld ultra-precise smart makeup device designed specifically for consumers with limited arm mobility.

Additionally, L’Oréal collaborated with the Chinese AI marketing company, Mogic AI, providing services such as promotional videos and insightful reports. The collaboration encompasses brands like Kiehl’s, Helena Rubinstein, and Yves Saint Laurent. It offers content strategy-based and AI technology-driven content scalability and automated production, generating copy, images, and videos to help brands effectively promote products, enhance marketing efficiency, and boost customer conversion rates.

L’Oréal’s technological advancements predominantly focus on beauty tools, showcasing their commitment not only to product innovation but also to delivering a comprehensive and more profound experience throughout the entire makeup process for consumers.

In addition, Estée Lauder collaborated with Google Cloud at the end of August, leveraging generative AI to transform the online consumer experience.

Estée Lauder expressed intentions to explore new applications of generative AI on its brand websites as part of its mission to enhance luxury digital experiences. Through this collaboration, ELC and Google Cloud aim to jointly explore AI-driven solutions to better understand consumer sentiments.

Google Cloud’s gen AI capabilities will facilitate real-time monitoring of consumer emotions and feedback, enabling Estée Lauder to proactively address consumer concerns, respond to external trends, and ultimately enhance the consumer experience. Estée Lauder is also developing a new generation of AI business applications on Google Cloud’s Vertex AI platform to streamline operations and business workflows, reducing operational costs while creating new productivity opportunities.

Furthermore, Shiseido announced in July through its official account on the social platform Xiaohongshu that it would enlist the endorsement of four virtual digital personalities, including “fashion blogger” AYAYI, “virtual idol” Noah, “AI artist & fashion designer” MUSE, and “AI artist & technology development officer” ALPHA, to endorse its product “Red Waist Freeze-Dried Powder.”

Shiseido is not alone in this trend, as nearly 20 beauty brands have introduced virtual spokespersons or collaborated with virtual personalities. As early as July 2019, SK-II launched its virtual spokesperson, Yumi. Brands like L’Oréal, Perfect Diary, and Flower Knows have also collaborated with virtual digital personalities.

How does AI transform the beauty industry?

According to the InsightAce Analytic report, AI in the beauty and cosmetics market is estimated to be worth $3.22 billion in 2022 and is projected to grow to $15.75 billion by 2031, with a forecasted compound annual growth rate (CAGR) of 19.6% between 2023 and 2031.

AI has a wide-ranging impact on the beauty industry and plays a significant role in three key areas.

Firstly, it significantly affects product research and innovation by reducing product development cycles. Through machine learning and algorithmic analysis, scientists can expedite the research and development process, discover novel chemical formulations, or more effective ingredients, and introduce more innovative and impactful products. For instance, P&G collaborated with the AI company Moodify to develop perfumes, marking a significant milestone in using AI for scent control and fragrance design.

P&G has expressed readiness to leverage Moodify’s unique odor control capabilities based on digital scents. The use of innovative AI technology enhances product development, design, and speed-to-market, reducing the time and cost of product launches, and thus achieving scalable, sustainable, and compliant production.

Secondly, AI significantly influences intelligent sales and marketing, saving brands time and costs. AI can analyze vast amounts of consumer data, aiding beauty brands in understanding consumer buying habits, trends, and demands. Such data analysis assists in formulating more effective marketing strategies and launching more appealing products and services targeted at diverse demographics.

For instance, L’Oréal’s investment in Rembrand, an AI-driven embedded advertising platform, is a significant departure from traditional product placements, which often entail lengthy negotiations and resource-intensive arrangements. Rembrand, utilizing generative AI technology, offers brands and advertisers a more efficient and flexible product integration method. Through Rembrand’s platform, brands can seamlessly embed their products into audiovisual content, bypassing prolonged negotiations and intricate arrangements, thereby saving considerable time and effort.

Moreover, the emergence of virtual digital personalities not only eliminates the negative impacts of celebrity endorsements on brands but also helps save substantial marketing costs. These digitally created personas, resembling human images and possessing adaptability, better align with brand images and marketing messages, innovatively visualizing product functionalities and advantages.

Lastly, AI empowers consumers to access enhanced customer service and consumption experiences. AI technology enables virtual try-on experiences, allowing consumers to instantly observe various makeup effects through real-time photos without physically applying cosmetics. This technology assists consumers in making better choices regarding makeup products suitable for their skin tones and styles.

Additionally, AI provides personalized beauty recommendations based on individual skin tones, textures, and preferences. By analyzing user-uploaded photos or completed questionnaires, systems can recommend the most suitable makeup and skincare products, offering tailored beauty solutions.

For instance, L’Oréal showcased technological innovations at this year’s Import Expo including several AI-powered products. The Paris K-SCAN AI Smart Analyzer examines hair and scalp issues using multiple light sources, while Armani Beauty’s Meta ProfilerTM Skin Microscope is a high-precision miniature skin detection device. Shu Uemura’s 3D shu: brow Smart Beauty Device, the first handheld smart eyebrow makeup tool, effortlessly tailors eyebrow designs in seconds based on users’ natural brows and facial features. These AI-powered products enhance customer service and experience.

Overall, AI-driven personalization, customization, and data-driven methodologies have revolutionized the beauty industry, spanning from product research and development to consumer consumption, elevating consumer experiences and aiding brands in better understanding market demands to introduce more competitive products.





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