August 4th, 2016

These viral selfie apps with 1 billion downloads are shaping China’s start-up culture

By: Emily Rauhala      Source: The Washington Post   Date: 3/8/2016

 The selfie, we all know, is an art form. That cast of light. That tilt of the chin. Not that you’re trying.

But at the southern Chinese headquarters of Meitu, the maker of some of the world’s most popular beauty apps, the selfie is also science.

Here in the company’s sparse, oh-so-start-up offices, tables of 20-somethings are using facial recognition and 3-D modeling to build a suite of apps that, quite literally, transform.

Their eye-widening, skin-lightening, chin-narrowing photo apps and “beautifying” video platform are ubiquitous in China, downloaded a billion times in total, according to the company. They are known by fans as “zipai shenqi,” or “godly tools for selfies.”

The company has hundreds of millions of monthly users, valuation in the billions of dollars, according to estimates, and plans for global expansion. If you ­haven’t heard of Meitu, chances are you will. If you’re reading this on your phone, watch this space.

The extraordinary popularity of Meitu says much about today’s China.

When Americans think about China’s Internet, many gravitate to one thing: censorship. While it’s true that the country’s Great Firewall keeps the Web here tightly controlled and painfully slow, Chinese tech firms are flourishing nonetheless, building products that capitalize on the spending power of a billion-plus consumers.

In 2015, four of the world’s top 10 Internet companies ranked by market capitalization were Chinese, according to the data website Statista. China is now the world leader in e-commerce, with ordinary Chinese using their phones to invest, buy groceries or pay for street food.

To compete, U.S. businesses need to understand the forces shaping China’s digital culture and commerce. Understanding Meitu helps.

The company behind some of the world’s biggest beauty apps started out as something much humbler.

When Cai Wensheng and Wu Xinhong founded the company in 2008, “selfie” had yet to be added to the Oxford English Dictionary, and Meitu was a desktop photo processor inspired by Google’s ­Picasa.

Bei Gou, a former portrait photographer who is now Meitu’s senior vice president for product, said the goal was to bring simple photo editing to China, allowing users to, say, quickly crop a shot of Shanghai’s skyline.

The team soon realized that many users seemed focused on one type of editing: fixing their faces. Meitu adjusted accordingly, creating the one- or two-touch “beautifying” options that became their signature.

“We recognized a good concept and optimized it,” Bei said.

Their timing was excellent. In the past five years, China’s Internet population has soared. There are now almost 700 million Chinese Web users, about 20 percent of the world’s Internet users.

That growth is partly explained by the rapid rise of affordable smartphones. Many of the people coming online here are doing so on mobile. And with each new mobile customer comes the potential for taking and sharing a photo or video, whether it’s a pouty selfie or a live broadcast of a tasty lunch.

The focus on beauty and self-expression resonates in particular with Chinese women, who are a rising consumer force. A 2012 Boston Consulting Group report estimated that female earnings in China will grow from $350 billion in 2000 to $4 trillion in 2020.

“Meitu sits at the intersection of two exploding forces: Chinese mobile use and rising Chinese women,” said Jeffrey Towson, a professor of investment at Peking University in Beijing.

“I don’t know if they saw that coming, but they went with it.”

Meitu’s users “went with it,” too, sharing billions of selfies on their social and online dating accounts. The most devoted users, like Apple fanboys, form groups to share news and arrange offline meetups.

Zhu Tingting, a 24-year-old college senior from Nanjing, is among the fans who regularly attend Meitu events. She said, without irony, that Meitu changed her life. She spends about two hours a day taking selfies.

“Nowadays, when girls go out, it just means finding a place to take pictures and post them on social media,” she said.

Though you’d think that an app designed to “beautify” your face might inspire feelings of inadequacy, superfans insist it gives them confidence, providing an escape from real-world pressure.

Wang Bei, a 33-year-old civil servant from Hebei province, said she appreciates the compliments she gets when she posts “beautified” selfies. “I wish I could live in the world of my Meitu phone forever.”

Among the tools the company features: MeituPic, a one-touch beauty app that put Meitu on the map; Meipai, a video platform with flattering filters; and a line of souped-up cellphones with twin 21-megapixel cameras optimized for — you guessed it — selfies.

The challenge for Meitu is how to spin the selfie craze into hard cash.

The company’s revenue comes mostly from in-app advertising and its line of premium, selfie-centric cellphones — a real but modest revenue stream.

Investors are impressed by the size and spending potential of Meitu’s young, female user base. What the company has to do now, analysts said, is to lock in those users by creating a sense of community and new ways for them to spend.

“I’m still looking for a strong business model for Meitu,” said Terry Zhu, a partner at BlueRun, a Beijing-based venture capital firm.

The company’s plan so far seems to lean toward “digital try-on,” which lets users upload selfies and experiment with different looks. It wants to develop what it calls a “beauty ecosystem” where brands and shopping are part of the experience.

Meitu is expanding aggressively. Outside mainland China, it now has offices in Santa Monica and Palo Alto, Calif., and people on the ground in London; Mexico City; Tokyo; New Delhi; Singapore; Hong Kong; Taipei, Taiwan; and Sao Paulo, Brazil.

But there is one important question facing the company as it tries to grow: whether the Meitu conception of beauty will resonate elsewhere.

The app spread quickly in Southeast Asia, but the challenge of “localization” may be harder in the United States, where the idea of one-touch beauty — particularly skin lightening, Meitu’s signature feature — may seem both offensive and out of date.

Last year, in a feature titled “Women photoshop themselves with an Asian beauty app,” BuzzFeed filmed a multiethnic group of American women experimenting with Meitu’s “BeautyPlus” app.

“Wait, there’s a filter called ‘whitening?’ ” asks one.

“Oh, gosh, I look really white,” says another. “It definitely just stripped my brownness away.”

Asked to comment on skin lightening, Meitu emphasizes its push to “localize” its offerings. “It’s fascinating to see how a woman’s definition of beauty changes from one market to the next,” the company said in a statement.

Tech analysts say Meitu can become a global brand even without success in the United States. The sheer size of China’s domestic market means the Web’s center of gravity is shifting east.

“Companies like this will go global, but it all circles back to their Chinese users in some form,” said Towson, the Peking University investment professor.

“If you are the biggest beauty ecosystem in China, you are the biggest in the world.”

Xu Yangjingjing contributed to this report.