AI Salesman: China's e-commerce platforms set to get AI-hosts for announcing deals during sale livestreams

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.

The emergence of new generative AI-powered virtual hosts has the potential to significantly disrupt the livelihoods of over 400,000 human live-streamers across various platforms, including Taobao Live from Alibaba Group Holding, WeChat from Tencent Holdings, Douyin and Kuaishou Technology, which is owned by ByteDance. Even Alibaba, which owns the South China Morning Post, is part of this landscape.

According to Hugo Huang, the founder of a Guangzhou-based virtual host provider called Sansongshuzi, the cost of employing a virtual host for online marketing campaigns is much lower compared to hiring a human live-streamer. He states that his company offers a virtual host for only 500 yuan (US$70) per month, capable of appearing in short videos or live-streaming sessions.

In contrast, the typical expenses involved in hiring a human host and renting a physical studio would amount to about 50,000 yuan per month, making the use of virtual hosts a far more cost-effective option for businesses, both small vendors and major brands alike. This significant cost difference is likely to accelerate the adoption of AI-powered virtual hosts and may lead to the displacement of many human live-streamers from their current jobs.

Several major brands in China’s live-streaming e-commerce sector have shown keen interest in exploring the possibilities of generative AI-driven virtual hosts. According to Gao Zilong, the COO of WH Zones, a Beijing-based start-up specializing in virtual influencers, large consumer brands, including a local electronics giant and an international cosmetics conglomerate, are collaborating with his company to launch online campaigns using virtual live-streamers. These virtual hosts are designed to resemble specific human celebrities.

Gao believes that combining the technology of virtual hosts with the influence of popular human celebrities within their local fan base can significantly enhance a brand’s online sales.

Currently, there are two types of virtual hosts being developed: two-dimensional (2D) and three-dimensional (3D) simulation technologies. While 2D hosts are more cost-effective, 3D hosts offer greater creative potential.

However, Gao points out that in order for 3D virtual hosts to match the capabilities of human live-streamers, the overall cost of using them would be even higher than hiring a live host.

Despite the enthusiasm surrounding virtual hosts in China’s live-streaming e-commerce market, this AI application is still in its early stages. Zhang Yi, the CEO of research firm iiMedia, comments that the application is currently limited, and there is ongoing debate about whether this business model can be widely adopted.

Apart from the cost benefits, Zhang believes that young people online are likely to be attracted to digital personas and are more open to embracing this new technology. The appeal of virtual hosts to the younger generation could contribute to the further development and adoption of this AI-driven approach in the live-streaming e-commerce market.

During a recent corporate event organized by Baidu in Hangzhou, China, the renowned online search giant and advocate for artificial intelligence (AI) showcased a new workflow based on its large language model, which is also the technology behind its chatbot Ernie Bot. This workflow allows users to input specific keywords related to products, sales targets, and content length, and in return, it generates a script that human hosts can use to introduce products during live-streaming sessions. Additionally, the AI-powered solution provides other content that hosts can use to engage with their online audience effectively.

Baidu shared a success story of a vendor who used the same AI solution to sell tickets to Shanghai Disneyland, resulting in impressive sales of 540,000 yuan in just one month.

While AI brings significant advantages in generating content for live hosts and creating virtual live-streamers, some platforms still prefer human performance. Huang from Sansongshuzi mentioned that platforms like Douyin and Kuaishou continue to favor human live-streamers over virtual ones. He emphasized that virtual live-streamers might not receive as much attention on these platforms, but e-commerce platforms like Taobao, owned by Alibaba, have not limited the visibility of virtual live-streamers on their platforms. The competition between AI-powered virtual hosts and human live-streamers is still ongoing, and their coexistence is evident across different platforms in the live-streaming e-commerce market.

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