Home News The Game-Changing Impact of AI Virtual Hosts on China’s E-Commerce Livestreaming Industry

The Game-Changing Impact of AI Virtual Hosts on China’s E-Commerce Livestreaming Industry

The Game-Changing Impact of AI Virtual Hosts on China’s E-Commerce Livestreaming Industry
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China’s massive live-streaming e-commerce sector is known for peddling everything from lipsticks, food and drink to smartphones, cars and even a rocket launch service. It can easily generate tens of billions of dollars in sales overnight during major retail events like Singles’ Day.

While major Chinese cities like Shenzhen and Hangzhou are in a race to establish a global live-streaming e-commerce hub, a number of Chinese tech companies are now pushing generative artificial intelligence (AI) technology to create virtual live-streaming hosts capable of round-the-clock sessions, further raising the stakes in this sector.

Generative AI refers to the algorithms, such as those that power ChatGPT and similar services, which can be used to create new content, including audio, code, images, text, simulations and videos.

This application for generative AI underscores how the technology is bringing sweeping disruptions to certain traditional occupations in China and the broader job market.

New generative AI-powered virtual hosts could disrupt the jobs of more than 400,000 human live-streamers across platforms such as Alibaba Group Holding’s Taobao Live, Tencent Holdings’ WeChat, ByteDance-owned Douyin and Kuaishou Technology. Alibaba owns the South China Morning Post.

The cost of a virtual host to run the online marketing campaigns of small vendors and major brands is much lower than that of a human live-streamer, according to Hugo Huang, founder of Guangzhou-based virtual host provider Sansongshuzi.

Huang’s company offers a virtual host for 500 yuan (US$70) each month to appear in either short videos or live-streaming sessions.

By contrast, the typical cost for a human host and renting a physical studio would average at about 50,000 yuan per month.

A number of major brands involved in China’s live-streaming e-commerce market have already expressed interest in experimenting with generative AI-driven virtual hosts, according to Gao Zilong, chief operations officer at WH Zones, a Beijing-based start-up that develops and operates virtual influencers.

Without elaborating, Gao said large consumer brands, including a local electronics giant and an international cosmetics conglomerate, are now working with his company to launch from August online campaigns that use virtual live-streamers, which are modelled after certain human celebrities.

He indicated that the combination of virtual host technology and a human celebrity’s influence on a strong local fan base would help boost online sales for a brand.

At present, both two-dimensional (2D) and three-dimensional (3D) simulation technologies are used to develop virtual hosts. While 2D hosts are more cost-effective, 3D hosts offer what Gao describes as “better creativity”.

For 3D virtual hosts to match what human live-streamers do, the ultimate cost for using them would be even higher than hiring a live host, according to Gao.

Despite the enthusiasm for virtual hosts in China’s live-streaming e-commerce market, this AI application is still at an early stage.

“So far the application is still limited,” said Zhang Yi, chief executive at research firm iiMedia. “It is at the stage where people are debating whether this business model can be widely promoted.”

Other than the cost benefit, Zhang said young people online “are likely to be attracted to a digital person and embrace the new tech”.

At a recent corporate event organised by Baidu in Hangzhou, capital of eastern Zhejiang province, the online search giant and AI advocate introduced a workflow based on its large language model – the technology used to train its chatbot Ernie Bot – to input keywords such as “Thai golden pillow durian”, “monthly sales of 100,000” and “no less than 300 words” to generate a script that human hosts used for introducing products.

That solution also provided other content used by the hosts to interact with their online audience during the live-streaming session.

Beijing-based Baidu said that a certain vendor used the same solution to sell tickets to the Shanghai Disneyland, helping generate sales of 540,000 yuan in a month.

Despite the advantages that AI brings in generating content for live hosts or in creating virtual live-streamers, some platforms still prefer how humans perform.

Sansongshuzi’s Huang indicated that Douyin and Kuaishou still favour human live-streamers.

“Virtual live-streamers will be downplayed by those platforms,” he said, “But we haven’t seen e-commerce platforms [such as Taobao] limit virtual live-streamers’ traffic.”