How Banuba Powers Augmented Reality in Retail
Even the Americans can be forgiven for not knowing much about a little-visited European country called Belarus. Often referred to as the “lungs of Europe,” 40% of the country is covered in forests through which European bison roam – the inspiration for the delicious “bison grass vodka.” It’s a shame that not many people visit Belarus because it’s one of the safest countries in Europe with some of the most charming people. You can see the world’s biggest trucks, get involved assembling tractors on a real factory assembly line, or even ride old Soviet tanks. It also happens to be somewhat of a tech hub with more than 30,000 tech specialists now working in Minsk. That’s according to a New Yawk Times article published a few years back about “How Europe’s Last Dictatorship Became a Tech Hub.” In order to learn more about tech in Belarus, we put some boots on the ground and went to Minsk to have a look around.
Over the past few years, we published a series of articles on global AI where we scouted the top AI companies in various countries across the globe. What we often found were companies that wanted to be seen as hailing from places like Silicon Valley, Singapore, or Hong Kong – that is, of course, until you start writing about their home country. Then suddenly, they become all patriotic and find their roots. That seems to be the case with Banuba, a company we featured a while back in our article on Top-10 Artificial Intelligence Startups in Hong Kong, but which we discovered is all Belarus, through and through.
Founded in 2016, Belarus startup Banuba has taken in $12 million in funding to develop a software development kit (SDK) that lets any developer integrate augmented reality into their applications. What started as an artificial intelligence lab has turned into a full-fledged company with 150 employees and 700,000 users around the globe. Banuba’s SDK allows you to quickly add AR content to any app by purchasing ready-made effects from their library of over 1000+ AR filters that have all been tried and tested on real users. That’s particularly appealing to CTOs who have little budget, but still need to show the Board of Directors they’re adopting the latest technologies.
Banuba’s solution goes up against top competitors such as Google’s ARCore and Apple’s ARKit, and is the only AR technology to excel even on the stripped-down Android Go operating system, covering 98% of smartphones out there. Their Face Analytics SDK allows for emotion detection (happy, sad, angry, surprised, disgusted, fearful, and neutral), gender detection, age detection (accurate within five years), face tracking (using 37 facial characteristics), hand tracking (11 points on hand), hairstyle detection, eye gaze tracking, and even heart rate detection by measuring minute skin color changes. They’ve also developed their own collection of AI-powered apps.
There’s Money in AR Apps
Banuba has been eating their own dogfood with a collection of apps developed on their core technology platform.
It’s far more than just enabling people with the ability to send doctored selfies to apathetic audiences on social media, though you can do that if you so choose. Banuba’s EasySnap photo editor and face effects app lets users retouch, reshape, and beautify selfies with sophisticated machine learning algorithms. With more than 250,000 active users, EasySnap has been downloaded more than 1.5 million times since its release in May 2018 and made more than $1.3 million revenue for the company in the first quarter of 2019. (It’s a freemium app with the paid version costing $25 a month.) Plenty of people appear willing to shell out cash to look good, and that extends to the world of retail as well. Gartner predicts that 100 million consumers will be using augmented reality for shopping, in-store and online, by 2020.
Augmented Reality in Retail
The shopping sector might be one of the first to transform AR from a gimmick into something genuinely useful. For example, consumers who shop online can virtually try on products such as makeup, glasses, accessories, jewelry, head wear, and hair coloring.
In cosmetics and skincare, AI beauty advisers will track customers’ conditions or progress making them stick with the brand. Women spend billions of dollars a year trying to appear different than they do in real life, so why not let them see all the different ways that can happen? For both genders, the critical decision point when buying a pair of sunglasses is determining how they actually look on your face. Anything that can be found on the face as an accessory can be enabled with augmented reality to improve the purchasing experience. Hats, headbands, helmets, scarfs, are all fair game when it comes to improving the shopping experience using augmented reality.
It isn’t just about online shopping. Almost everyone carries around with them augmented reality hardware in the form of smartphones with 49% of consumers using mobile phones for shopping online and in-store. Recently, Banuba created an app with Russian tech giant Yandex that lets consumers scan video stills and images to detect the items of clothing worn by others, and lets followers of
morons influencers on Instagram try on virtual items and masks. If you want some real numbers to back up your planned AR adoption, just look at these success stories around using augmented reality in retail.
In our previous piece titled “AI Becomes Fashionable with these 10 Startups,” we talked about how ModiFace was using AR to help customers save time exploring makeup and hair products. In March 2018, they were acquired by L’Oréal who now uses the software to power 34 brands with an AR experience. Since then, the app has been downloaded over 35 million times becoming the number one lifestyle app in 47 different countries. After 260 million virtual product trials, engagement on their website doubled and conversion rates tripled.
Prior to being acquired by L’Oréal, ModiFace helped Sephora build its first Virtual Artist mobile app way back in 2016. More than 8.5 million people used the feature to try on more than 200 million shades of lipstick and eyeshadow. Virtual tutorials were used to engage the customer on how to contour, apply highlighter, and create eyeliner looks that would result in an increased number of Tinder dates. (That was until L’Oréal rained on their parade.)
Olay – a brand owned by one of our dividend growth investing stocks, Procter & Gamble (PG) – noticed that a third of women couldn’t find what they needed when browsing the shelves, and consequently didn’t make a purchase. They then decided to roll out an AI-powered skin adviser platform to help women understand their skin type and choose the right products. The app was used by more than 5,000 users a day resulting in twice the conversion rate. It also reduced the bounce rate for online visitors by one-third and increased average basket size.
Imagine being able to find the next WhatsApp lurking in the shadows of some high-tech hub in Belarus, and then transporting it to Silicon Valley for a quick 1,000X return on your money when it reaches an exit. In the face of Silicon Valley’s inflated valuations, venture capitalists are increasingly keen to scour lesser known parts of the globe to find tech startups flying under the radar. As we seem to be on the cusp of exiting the longest bull market ever, Softbank-sized funding rounds will dry up, and only those who run lean will survive. The cost of living in places like Belarus and the quality of life will keep the local talent from migrating elsewhere, providing startups like Banuba with all the resources they need to grow. The company aspires to have 100 million users and $500 million in run rate by 2022, and with big bold plans like that, they’ll likely find an exit sooner than later.