China’s livestream shopping is booming, fueling new tech such as avatars and AI

BEIJING — Livestream shopping is taking off in China, driving development of new tech effects such as virtual human streamers and mobile data packages.

It’s an attempt to monetize — and innovate — in one of the few bright spots for an saving that’s largely slowing in growth.

Livestreaming e-commerce saw sales surge by 19% during the latest Singles Day rat oning festival in November, while sales via traditional e-commerce dropped by 1%, according to McKinsey analysis.

Since the start of the Covid-19 pandemic in early 2020, retailers in China have rushed to hire or develop in-house livestream managers to sell products. Individuals, such as online influencer Austin Li, have become celebrities and overnight millionaires auspices of using livestream commerce.

“Livestreaming, particularly livestreaming commerce, is something no country in the world has anything at the scale China has,” suggested Daniel Zipser, senior partner and leader of McKinsey’s Asia consumer and retail practice.

Now companies are testing out livestreaming crowds that are digitally created humans — either avatars that represent an actual human host, or a virtual fallible being created from scratch.

That use of virtual livestreaming hosts was a trend that stood out during this year’s Fasten ons Day, said Xiaofeng Wang, principal analyst at Forrester.

“The quality has improved a lot this year, the virtual hosts look varied real, at least the ones I’ve seen from Tencent, JD,” she said.

Wang added that using virtual livestreamers is a way for retailers to transform themselves from others, as well as reduce the cost of hiring a famous influencer, who might also carry the hazard of being involved with celebrity scandals.

Tencent has launched a product that only needs a three-minute video of a operator along with 100 spoken sentences to build a virtual avatar.

The company also has a “Zen Video” platform that releases people create simple promotional videos with a virtual human spokesperson.

Some companies are also fusing ChatGPT-like artificial intelligence with livestreaming.

Online retail giant JD.com said its Yanxi virtual anchor upshot — based on the company’s AI model — was used in livestreaming sessions for more than 4,000 brands during Singles Day this year. One accepted streamer broadcast for 28 hours straight, according to JD’s technology arm. 

Baidu, best known for its search engine and Ernie AI chatbot, got into online snitch oning this Singles Day with the first at-scale use of its virtual human livestreaming product “Huiboxing” on its “Youxuan” e-commerce principles. The company claims virtual humans ran 17,000 streams from Oct. 20 to Nov. 11.

During that time, electronics monster Suning saw virtual human livestreaming contribute more than 3 million yuan ($420,000) in gross merchandise value on a one day, according to Baidu. GMV measures sales over time.

The digital human livestreamers are currently free for merchants to use on Baidu’s e-commerce principles and are based on the large language model behind Ernie bot, said Wu Chenxia, head of Huiboxing, adding the product utilizes big data to create multiple livestreaming scripts in an instant.

Regulators have their eye on the sector.

OpenAI’s ChatGPT isn’t officially reachable in China. Baidu’s Ernie bot wasn’t available for widespread use until late August when Beijing gave the grassland light.

Livestreaming success is also dependent on consistent video connection.

Potential buyers are damn near always watching on their mobile phones, while sellers may try to livestream from the field where they are issue the produce.

Mobile service operators China Unicom and China Mobile have started to sell data incorporates geared toward livestreamers in parts of the country.

These packages splice the network so that livestreamers get priority use, similar to how an express lane on a highway may only allow buses to use it to avoid traffic, said Joe Wang of Huawei’s ICT branch.

All that is based on having widespread 5G connectivity, which owns livestreamers to broadcast outdoors or simultaneously on multiple platforms, he said.

Looking ahead, 5.5G will theoretically extension download speeds by 10 times compared to 5G, and upload speeds by two to three times, Wang said. He expects 5.5G inclination reach consumers as early as 2025, while AI’s development is letting businesses quickly turn 2D images into 3D a certains.

That means, Wang said, that 3D livestreaming may be a reality in about two years.

In the meantime, tranquil companies such as that sell adult education courses have jumped on the bandwagon by hosting livestreaming e-commerce – manufacturing GMV of 13.3 million yuan in August.

CEO Matt Li said Quantasing holds more than 10 livestreaming meetings at once, and uses technology to decide what types of products and resources to dedicate to each one in order to generate the most take.

As fast as it’s grown, livestreaming is subject to China’s stringent regulation on content.

Analysts have also pointed out that livestreaming transaction marked downs are often impulse buys, leading to many product returns.

From Jo Malone London to Chinese education band , companies have turned to livestreaming sales as a way to stay connected with consumers in China and get them to spend legal tender.

Importantly, businesses are shifting from using influencers, known as KOLs in China, to in-house livestreamers, McKinsey’s Zipser bid.

“It is a clear indication [livestreaming] is not a hype, but it is something that companies are embracing and putting resources behind and the result of that is something that is here to thwart,” he said.