Using virtual livestreaming hosts has been a trend that gained attention during this year's Singles Day, according to Xiaofeng Wang, principal analyst at Forrester. Companies such as Jo Malone London and Chinese education company New Oriental have employed this method in order to stay connected with consumers in China and entice them to purchase items. Additionally, businesses are combining ChatGPT-like AI with livestreaming.
In China, livestream shopping is picking up, resulting in the emergence of new tech products ranging from virtual human streamers to mobile data packages. This is as the nation seeks to monetize and innovate in one of the few bright spots in an economy whose growth is slowing. During the Singles Day shopping festival in November, sales of livestreaming e-commerce grew 19% while those on traditional e-commerce dropped 1%, according to McKinsey. With the start of the Covid-19 pandemic in early 2020, retailers have put in much effort to recruit or nurture in-house livestream hosts for their products, spawning online celebritites such as Austin Li who made it to millionaire status with the help of livestream commerce. Daniel Zipser, the Senior partner and leader of McKinsey's Asia consumer and retail practice, opined that "no country in the world has anything at the scale China has" when it comes to livestreaming, especially its commerce aspect. Companies are now experimenting with livestreaming hosts that are either avatars representing actual hosts, or virtual human beings invented from the ground up.
Xiaofeng Wang, a principal analyst at Forrester, commented on how virtual livestreaming hosts were a major trend in this year's Singles Day, noting, "The quality has been greatly enhanced this year, the virtual hosts seem to be more realistic, at least those from Tencent and JD." Wang additionally pointed out that retailers can make use of virtual livestreamers to set themselves apart from the competition, on top of reducing the cost of employing a well-known influencer who could potentially be embroiled in high-profile scandals.
Tencent has developed a product that only needs a 3-minute video and 100 spoken sentences of a user to create a virtual avatar. The company also has the "Zen Video" platform which helps people create promotional videos with the help of a virtual human representative. Moreover, some companies have joined ChatGPT and livestreaming by integrating them with AI. JD.com reported that its Yanxi virtual anchor- based on the company's AI technology- was used for more than 4,000 brands during the Singles Day. One virtual host broadcasted for a whopping 28 hours, as per JD's tech division. Baidu, renowned for its search engine and Ernie AI chatbot, got into e-commerce during the Singles Day by using its virtual human product "Huiboxing" on its "Youxuan" platform. As per the company's stats, virtual people ran 17,000 online streams from October 20 to November 11.
During the period, electronics giant Suning saw virtual human livestreaming contribute over 3 million yuan ($420,000) in gross merchandise value (GMV) on one day, as noted by Baidu. GMV is a metric used to track sales over a period. Huiboxing's head Wu Chenxia reported that the digital human livestreamers are available free of charge to vendors on Baidu's e-commerce platform and are powered by a large language model behind Ernie bot. He also revealed that the product utilizes big data to rapidly generate multiple livestreaming scripts.The sector is being closely monitored by the regulatory authorities. OpenAI's ChatGPT is yet to attain official approval in China. Until late August, when the Chinese authorities gave their go-ahead, Baidu's Ernie bot was not available for general use.
Success in livestreaming relies on a routinely steady video connection. Buyers usually view the material on their cell phones, while sellers may attempt to stream from the farm where they are cultivating the goods. China Unicom and China Mobile, two main mobile providers, have begun to offer data plans tailored for livestreamers in certain areas. These plans partition the network to give livestreamers priority service, which is similar to how buses are given special access on a highway to bypass congestion, explained Joe Wang from Huawei's Information and Communications Technology department.
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5G connectivity's broad availability opens the door to livestreamers who want to broadcast from outdoors or to multiple sites simultaneously, according to Wang. In the future, 5.5G can offer 10 times the download speed of 5G and between two and three times the upload speed, with the possibility of being made available as soon as 2025. Taking advantage of AI capabilities, businesses will be able to swiftly turn 2D images into 3D ones. Wang believes this could lead to the reality of 3D livestreaming within two years.
Meanwhile, companies such as Quantasing that market adult education courses have adopted livestreaming e-commerce – generating GMV of 13.3 million yuan in the month of August. Matt Li, CEO of Quantasing, claimed that they host more than 10 livestreaming events at the same time, and take advantage of technology to decide which products and resources to give the highest priority to in order to achieve the highest revenue.
Despite its rapid growth, livestreaming is subject to rigorous oversight in China. Analysts have also noted that, as purchases made through livestreams are often impulsive, this leads to items being returned in large numbers. Companies such as Jo Malone London and New Oriental have taken to livestreaming retail to stay in touch with their Chinese customer base and increase cash flow. Interestingly, firms are gradually transitioning from using KOLs to their own in-house livestreamers, according to Zipser of McKinsey. He commented, “it is a clear signal that livestreaming is here to stay. Businesses are investing in it and seeing good results”.
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