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Team Name: Sebela AR

University: Babson College

BIG IndeaBounce 2023 finalist

Concept: Sebela AR is a makeup virtual try-on for e-commerce brands where our product allows their visitors to try on their product online to increase conversions.

Challenge: During our customer discovery of talking with 21 e-commerce makeup brands, we found their biggest pain point to be converting their online visitors into paying customers. Retailers allow their customers to try on makeup in person, thus solidifying their satisfaction and trust in buying the product. But online, people don’t get the chance to see the products themselves, meaning e-commerce brands lose out on a lot of potential profit.

Solution: E-commerce brands need a way to convert their visitors into paying customers. Sebela AR brings the retail experience of trying on makeup products to the online world. Imagine shopping online for a new lipstick, but you don’t know if the color will work with your skin tone. With Sebela, you can just click the “Try It On” button and our web app opens, showing you in your camera feed… but with the lipstick on! You’ll love it so much more than if you only had a stock photo to decide. Virtual try-on technologies using Augmented Reality have been proven to increase sales for companies like Decorte, where sales were boosted by 85%, and Tarte, with 200%.

The Market: There are over 5000 makeup ecommerce brands in the USA alone (IBISWorld) and over 95% of them do not have access to affordable virtual try-on technology for their online customers. With more startup makeup brands launching online instead of through retail due to the lower barriers of entry, they must find a way to bring the successful retail experience online. We project that our product average annual sale price for each brand will be $3,000 (based on competitor pricings). Thus, our projected revenue if we capture all the makeup brands in the US would be $15,000,000. The color cosmetics industry worldwide is projected to increase by a CAGR of 7.4% from 2017 to 2023 (Allied Market Research), thus there will be more brands in need of Sebela AR to increase their sales and establish customer trust in their products.

Competition: There are currently other virtual try-ons on the market. However, these competitors charge a lot for their technology ($5000-$30,000 per year). Since the cost of their technology is too expensive for the majority of brands, they were only able to capture a small portion of the market. In addition to that, these virtual try-ons are not scalable solutions, since brands have to work with development teams to integrate and deploy it into their stores. Because it costs a lot of time and money for both parties, it is only worth it for big multi-million dollar brands to use the technology. On the flip side, the more affordable AR technology is not realistic or accurate, rendering it useless to the customer and therefore the brand. This leaves a big gap in the market for Sebela AR to be the product that is both affordable to the majority of brands and high enough quality to meet their standards. Additionally, Sebela AR will also be very scalable as it will have a simple user interface, so brands can easily create their own virtual try-ons and deploy to their stores using a Shopify app.

Value Creation: Our business model will be an annual contract, with multiple package options based on how many products the brand wants to have try-ons for. Our projected SOM is $1.2 million if we are able to capture all indie and startup makeup brands in the US. Our SAM is $15 million if we were to capture all makeup brands in the US. Lastly, our TAM is $1.6 billion if we capture all global makeup e-commerce companies in the color cosmetics market. We project that the average annual contract sale price would be around $3000. Currently, we have 7 small startup brands working with us in our 30-day pilot program, where we will track value metrics that our AR technology will create such as conversion rate, refund rate, and number of samples requested. After establishing credibility and showcasing our value through this program, we will secure annual contracts with our partnered brands and transition to bigger brands.

The Team: We are a team of 3 co-founders who all have experienced the struggle of buying the right makeup products online. Our mission statement for building Sebela AR comes from remembering the moment when we tried on well-fitting makeup and felt empowered. We want to bring that experience online to everyone who doesn’t have the time or means to try on makeup in stores, so they can truly experience makeup anywhere they may be. The Sebela AR co-founders are Anh Thu, Lily, and Neal. Anh Thu (CEO) is a junior at Babson College, studying Tech Entrepreneurship and Design. She has experience with growing her own e-commerce business, selling home gym equipment to generate over 40k in revenue in high school. This has translated over to understanding the needs that e-commerce brands have with virtual try-ons. Lily (CTO) is a sophomore at Olin College of Engineering, where she was given the Clare Boothe Luce research award to create assistive AR technology for people who are blind/visually impaired, so they have an easier time applying makeup. Her expertise in Augmented Reality helps with building Sebela AR’s virtual try-on technology. Neal (Head of Engineering) is a sophomore at San Jose State University, and has created numerous coding projects with over 100,000 users. His experience with building full-stack web applications guides us in shaping Sebela AR to be fully accessible to all brands.