In a groundbreaking development, artificial intelligence has proven itself as a formidable force in the world of influencer marketing and e-commerce.

A recent live-streaming event featuring AI-generated avatars shattered expectations, earning $7.65 million—surpassing the revenue generated by their human counterparts.

This milestone underscores the transformative power of AI in reshaping the future of retail and entertainment.

Breaking Records with Digital Avatars

At the center of this revolution is Luo Yonghao, one of China’s pioneering streamers and founder of smartphone company Smartisan.

In collaboration with Baidu, Luo employed AI-powered versions of himself and his co-host Xiaomu to engage audiences in real-time on Baidu’s “Youxuan” live-streaming platform. Over the course of more than six hours, the duo promoted a range of products, including electronics, food items, and consumer goods, raking in 55 million yuan ($7.65 million).

This performance eclipsed Luo’s earlier live-streaming attempt just a month prior, which lasted slightly over four hours and resulted in significantly lower sales figures.

The success of the AI-driven broadcast has sparked widespread excitement across the industry, with analysts hailing it as a turning point for live-streaming and digital content creation in China.

“AI avatars represent a pivotal shift in how brands connect with consumers,” said one industry expert. “They combine efficiency, scalability, and innovation, offering unparalleled opportunities for businesses.”

How AI Avatars Are Changing the Game

The AI-powered avatars used in the broadcast were developed using Baidu’s advanced generative AI models. These systems analyzed five years’ worth of video material to learn Luo’s mannerisms, comedic timing, and conversational style, ensuring the digital versions felt authentic and relatable to viewers.

One of the most significant advantages of AI avatars is cost reduction. Traditional live-streaming setups require large production teams, expensive equipment, and studio rentals.
By contrast, AI avatars eliminate many of these expenses, allowing companies to scale their operations efficiently. Moreover, unlike human hosts who need breaks, AI avatars can operate continuously without fatigue, maximizing productivity.

The Rise of Live-Commerce in China

Live-stream shopping has exploded in popularity in China since the onset of the pandemic, becoming a dominant channel for both retailers and individual sellers. Platforms like Douyin (the Chinese version of TikTok), Taobao Live, and JD.com have embraced this trend, with Douyin surpassing JD.com last year to become the second-largest e-commerce platform in the country.

According to a report by Worldpanel and Bain & Company, live-streaming accounted for a substantial portion of online sales growth in 2023. As economic growth slows, many individuals have turned to live-streaming as a way to earn income through commissions and virtual gifts.

Challenges Ahead for AI Avatars

While the potential of AI avatars is undeniable, there are challenges that must be addressed before they achieve widespread adoption:

High Return Rates : Products sold during live-streams are often impulse buys, leading to higher-than-average return rates.

Regulatory Compliance : AI avatars must adhere to strict advertising guidelines to avoid misleading consumers or violating regulations.

Viewer Trust : Building trust with audiences accustomed to interacting with human influencers may take time, especially if viewers perceive AI avatars as less genuine.

Despite these hurdles, the benefits far outweigh the risks. AI avatars offer a level of consistency and customization that traditional influencers cannot match. For example, they can tailor recommendations based on viewer preferences, enhancing engagement and conversion rates.

Beyond Commerce: Expanding Applications of AI Avatars

The implications of this technology extend beyond live-streaming commerce. Other Chinese tech giants, such as Tencent, are already exploring ways to integrate AI avatars into news broadcasting and customer service roles.
During last year’s Singles’ Day shopping festival, several companies experimented with virtual hosts to promote products, signaling a broader trend toward digitizing human interactions.

Analysts predict that as AI technology continues to evolve, its applications will diversify further. From personalized education platforms to immersive gaming experiences, the possibilities are virtually limitless.

Conclusion: A New Era of Digital Influence

The success of AI avatars in live-streaming represents a paradigm shift in how we think about influence, commerce, and digital interaction. By combining cutting-edge AI with proven marketing strategies, companies can unlock new levels of efficiency and creativity.

As Luo Yonghao aptly put it, “The effect of the digital human scared me.” Indeed, the rise of AI avatars marks the beginning of a new era—one where technology redefines what it means to be an influencer.