AI-generated digital avatars are gaining traction across China’s livestream e-commerce platforms. According to Sixth Tone, over 993,000 digital avatar companies have so far registered on the business database Tianyancha, and more than 400,000 of these companies were established in 2023 alone. This development could lead to more live streams being done by AI bots.

As of 2023, China’s livestream e-commerce market reached $691 billion, growing 35% year-over-year. Digital avatars generated over $46.9 billion in revenue last year, with forecasts projecting this figure to reach $90.1 billion by 2025, per research firm iiMedia.

During the “618” shopping festival in June 2022, AI hosts represented over 5,000 brands, attracting over 100 million views and generating over 5 million interactions, reports e-commerce platform JD.com.

Technology and Implementation

The technology enables live streamers to multiply their output through digital replicas. According to AI video generator HeyGen, one prominent example is Xue’er, a 28-year-old live streamer who partnered with Nanjing-based AI company Silicon Intelligence in 2018.

HeyGen reports on X that with just one hour of high-definition video footage captured from multiple angles, Xue’er created digital avatars that simultaneously handle 5-10 e-commerce live streams. According to the post, her AI clones generated over $50 million in sales within 18 months.

HeyGen states that the creation process utilizes 3D rendering, motion capture, and machine learning to craft avatars that mimic human behavior—entry-level technology costs as little as a few hundred dollars, while state-of-the-art solutions command thousands.

Business Implications

As Jing Daily reports, AI clones offer cost advantages for brands and influencers by eliminating expenses for studio space, sound engineers, makeup artists, and other support staff. The avatars can stream continuously without breaks, potentially increasing sales opportunities.

Business influencer Liu Run, who has over 1 million followers on Douyin, noted that few viewers could distinguish his AI clone from himself. He uses his digital replica to produce educational content on management and entrepreneurship.

Major technology companies, including Baidu, Tencent, Alibaba, and Microsoft spin-off Xiaoice, are developing AI cloning technology for the Chinese digital human market, which IDC forecasts will reach $1.5 billion by 2026.

Consumer Response and Concerns

Consumer reception remains mixed. 

According to Jing Daily, when actor Calvin Chen used an AI clone for a 15-hour livestream selling chicken feet to his 9 million followers, he lost 7,000 followers within three days despite labeling the content as AI-generated.

Some platforms are implementing regulations in response to concerns. Douyin has banned live streams conducted solely by AI and introduced guidelines requiring clear labeling of AI-generated content. Content creators must also register using their real identities.

Ying Jie, a lawyer at Shanghai Kangming Law Firm, confirmed for Sixth Tone that operators of digital avatars remain legally liable for false advertising or other issues during broadcasts. He added that using someone’s likeness without consent could result in legal consequences.