BEIJING — Artificially generated avatars are proving to be more effective at driving sales than traditional hosts, according to a recent collaboration between Baidu, a leading Chinese technology firm, and renowned livestreamer Luo Yonghao.
During a six-hour livestream session on Baidu’s e-commerce platform “Youxuan” on Sunday, Luo and co-host Xiao Mu engaged with their audience using digital replicas of themselves. This innovative approach yielded an impressive revenue of 55 million yuan ($7.65 million), as reported by Baidu.
In a stark comparison, Luo’s initial livestream on Youxuan, which occurred the previous month, generated significantly lower sales during a four-hour stint focused on consumer electronics and food products.
This marks Luo’s debut in leveraging virtual human technology for sales during livestreams. In a candid moment shared with his 1.7 million fans on Weibo, he expressed his astonishment at the success of the digital avatars: “The digital human effect has scared me … I’m a bit dazed,” he stated, as translated by Finance Newso.
Since starting his livestreaming career on ByteDance’s Douyin in April 2020, Luo has garnered a massive following of nearly 24.7 million. His foray into live selling was primarily driven by a need to alleviate debts stemming from his struggling smartphone venture, Smartisan.
The avatars used by Luo and Xiao were created using Baidu’s generative AI model, which analyzed five years’ worth of footage to emulate the pair’s humor and presenting style, according to Wu Jialu, research head at Luo’s company, Be Friends Holding.
Wu remarked, “This is a DeepSeek moment for China’s entire livestreaming and digital human industry,” referring to the advancements made in artificial intelligence. He compared this milestone to DeepSeek’s disruptive impact in January when it claimed to rival ChatGPT at lower costs with an open-source model.
Digital avatars can dramatically cut costs for businesses as they eliminate the need for extensive production teams or studios. These avatars also have the capacity to stream continuously without interruptions.
Wu noted that Baidu has made significant improvements in its digital human offerings compared to the earlier stages of livestreaming commerce within the last five to six years.
A growing industry
Livestream shopping in China surged in popularity post-pandemic as brands sought new avenues for sales. Increasing numbers of individuals are turning to livestreaming to generate income through commissions and virtual gifts, especially amid slower economic growth.
Last year, Douyin’s livestreaming capabilities led to its ascendancy, surpassing JD.com as China’s second-largest e-commerce platform, further encroaching on the market share held by sales leader Alibaba, as noted in a recent Bank and Bain report. Both JD.com and Alibaba’s Taobao have also integrated livestreaming sales features.
Chinese corporations, including tech titan Tencent, are also creating tools for digital personalities to function in roles like news anchors. Furthermore, at the end of 2023, several businesses began experimenting with virtual human livestreamers during the Singles Day shopping event.
Despite these advancements, analysts warn that products marketed through livestreams often face high return rates due to the impulse nature of purchases.
According to Wu, the primary obstacle to utilizing virtual humans for livestreaming now lies not with technology but in meeting compliance and platform guidelines. To use digital humans, companies must ensure they adhere to regulations regarding product advertising, and they must navigate varying platform rules on allowing virtual hosts.
The platform Douyin, for instance, has imposed restrictions on the usage of this technology, particularly when the avatars do not engage with the audience.
While a date for Luo’s next virtual appearance remains undecided, Wu anticipates it will happen soon, and he envisions a future where digital humans could efficiently livestream in multiple languages, expanding their reach beyond China.
