Artificial intelligence to spruce up your looks: Co-founder of tech startup SkinKraft on data-enabled personal care

Indian cosmetics industry is going through an unprecedented growth phase. The country is expected to constitute five percent of the total global market and will be the fifth in revenue terms by 2025.

It is estimated that one in three women will move towards customised products by 2025. The trend is slowly catching up in India and it is not restricted to the affluent metro dwellers. As more and more people are moving towards customised beauty care products, a handful of innovative startups across the globe are exploiting the potential of data analytics, artificial intelligence, and machine learning to transform skincare solutions.

In India, this transformation is spearheaded by SkinKraft, a Hyderabad-based startup. Established in 2017 by three resourceful technology entrepreneurs Chaitanya Nallan, Veerendra Shivhare and Sangram Simha, the company has already assisted more than four lakh women. Data is at the core of SkinKraft as it customises each kit according to the individual’s needs through its proprietary 'SkinID'.

Nallan, an alumnus of IIT Kharagpur and International School of Business Hyderabad, has years of experience in building and growing high-performance tech startups. In an email interaction with CNBC-TV18, the young entrepreneur talks about the concept of SkinKraft, its business strategy and the road ahead.

Edited excerpts from the interview:

With AI and customer insights, companies are now able to get unique information about an individual’s skin -- skin characteristics like type, skin issues, lifestyles, environment, and geographic location, that give an accurate picture of the individual to base their customised solution on.  At SkinKraft, data is at the core. Data aids us in understanding the skin profiles of individuals better and match it to the right set of products. It also assists us in further improving the efficacy of our products and further expand to new products that a particular skin profile needs. Technologies like ML will further change the landscape of skincare, haircare and the beauty industry in the next three-four years leading to even more personalised choices.

SkinKraft was born out of two undeniable truths about the current skincare industry. First, women trying to find even basic skincare products are often caught in an unrewarding cycle of experimentation. Second, despite growing levels of frustration among their consumers, skincare brands continue to churn out generic formulations catering to the mass market. Skin type, skin issues, skin support systems, pigmentation levels, skin damage levels, hydration levels, and several other aspects make an individual’s skin unique and have to be catered uniquely. So, a generic product, mass-produced by an FMCG company cannot be the most effective way to care for your skin. In fact, these products encourage trial-and-error skincare which in the long term leads to premature aging of the skin. This led us to build our customised skincare brand – SkinKraft.

At SkinKraft, skincare starts with the customer. Through a holistic assessment of the customer’s skin, similar to a dermatologist assessment, we create a skin profile. A detailed analysis is given to the customer in which we explain the problem areas and also the ingredients required to manage their skin. Along with this, we recommend a customised skincare regimen that includes the ingredients corresponding to the specific requirements as outlined in the customer’s skin profile. SkinKraft has generated over a million skin profile records until now.

When we initially started, the main challenge was to create awareness around the new and innovative concept of ‘customisation’. It was about breaking the current habit of buying generic, off the shelf product, or ‘keyword’-centric product. Instead of positioning ourselves in the market, what we did was drive awareness and conversation around the subcategory of customization itself -- how it differs from the traditional setup and more importantly empowering the customers with the knowledge and hence the confidence of picking the right products.

The Indian cosmeceutical and cosmetics industry currently has an overall market standing of $6.5 billion from a global market of $274 billion. It is expected to grow to $20 billion by 2025. The regulatory framework around cosmetic products came to place in India in late 2011. It came as a measure to regulate and prevent the offering of low quality and false cosmetic products in India and to convey consistency to the import arrangement of such items.

Till now, we have not faced any regulatory challenges.

Our customers are taken through SkinID, a dermatologist-approved questionnaire pertaining to their skin type, skin concern and lifestyle choices which has a direct and indirect implication on their skin health. Once the responses are recorded, the algorithm evaluates all the parameters and the customer is classified into one of 72 broad profiles, each of which breaks down into thousands of combinations. Depending on the individual’s current skin health and needs, a customised kit is then created to include a customised cleanser and moisturiser. Currently, we are catering to skin issues such as dark spots, dark patches, skin lightening/tanning, and acne. We have recently expanded to anti-aging products and will be adding customised sunscreens to the regimen next. We will also launch customised shampoos and conditioners by December.

Indian beauty and personal care industry is estimated to be worth $8 billion. Overall we are witnessing the market moving towards ‘premiumisation’, with the premium segment growing at 6.3 percent, as compared to 1.1 percent for the mass market.  Indian brands have a sizeable presence in the mass category, while premium markets are largely dominated by international brands.

Some of the customised skincare brands abroad that have been disrupting the skincare market include Skinsei, Skin Inc and Function of Beauty. Data-driven customisation as a concept has emerged only in the last few years in the country. In India, Clinique has introduced custom-blend hydration systems that offer unique combinations that enable personalisation.

There are few players who are working in the ‘customisation’ category, but nobody is doing at a mass scale as we are. Our biggest competitor is the current behaviour of customers -- buying mass-produced products.

We believe that in the next 5-10 years, consumption pattern in the beauty industry will shift significantly from mass-produced products to customised products across segments like skin, hair colour, etc. This is because of the confluence of three significant trends: Mass internet adoption enabling feedback loops and user input, AI-enabled understanding of ingredient effectiveness and modern manufacturing technologies.

We are expanding the lineup of our skincare range to include customised sunscreens, anti-aging products with more powerful and efficacious ingredients. We are also set to launch our customised hair care products by December 2019.