AI, 5G technologies help e-tailers boost sales via livestreaming

Competition in China's booming livestreaming e-commerce segment — the practice of promoting products via live broadcasts on online channels — is intensifying, as major e-tailers step up efforts to bolster sales and attract a more diversified customer base by leveraging cutting-edge technologies, such as artificial intelligence and 5G, experts said.

Meanwhile, short-video platforms are doubling down on efforts to expand their presence in livestreamed shopping, with online traffic shifting from traditional e-commerce platforms to apps such as Douyin and Kuaishou, while an increasing number of brands are aggressively moving toward starting their own livestreaming activities, they added.

An AI-powered digital human of Liu Qiangdong, Chinese e-commerce giant JD's founder and chairman, appeared in the firm's livestreaming rooms on April 16 to promote a variety of products, including meats, edible oil, eggs, milk, air conditioners and televisions.

The virtual avatar almost perfectly replicates Liu's facial expressions, body language, gestures, voice and accent, capturing even the subtlest movements of his fingers. Liu's avatar generated over 20 million views within the first hour and landed 50 million yuan ($7 million) in sales throughout the live broadcasts.

Other major e-commerce platforms have accelerated their layout in the application of digital humans in livestreaming activities. Tmall, Alibaba's business-to-customer e-marketplace, has launched AI virtual models to provide users with a more personalized shopping experience.

Leading Chinese retailers are gearing up to fully exploit content-led retail innovations like e-commerce via livestreaming, according to a report from consultancy Bain &Co. It noted that retailers can still win by adapting and combining shopping and entertainment through livestreaming and other innovations.

Chinese shoppers are willing to devote their attention to more novel platforms that blur the boundaries between entertainment and retail, particularly in livestreaming e-commerce provided by short-video platforms such as Douyin and Kuaishou, the report said.

Zhu Keli, founding director of the China Institute of New Economy, said e-commerce via livestreaming will not only improve the consumer shopping experience, but also attract more online traffic and bolster sales of e-commerce platforms.

With the rapid development of 5G, AI and other cutting-edge digital technologies, livestreaming will be more widely applied in e-commerce and become an important driving force promoting the growth of e-commerce, Zhu said.

Data from market consultancy iiMedia Research showed that revenue of China's livestreaming e-commerce sector reached 1.7 trillion yuan last year, up 16 percent year-on-year. This figure is expected to reach 2.14 trillion yuan in 2025.

"Livestreaming has become a key method widely adopted by consumer brands to retain existing users, attract new customers and boost sales revenue," said Cui Lili, director of the Institute of E-commerce at the Shanghai University of Finance and Economics.

Cui said there is an interdependent relationship between top livestreaming influencers and platforms, and that livestreaming hosts or internet celebrities should disseminate high-quality content to attract more user traffic, not just sell products.

Moreover, online retailers should make strategic adjustments to reduce their dependence on top livestreaming anchors and support new anchors, she said.

"Livestreaming could allow hosts to interact with customers in real time and answer their queries, which will significantly improve shopping experiences and lure more shoppers to purchase online," said Chen Tao, an analyst with internet consultancy Analysys in Beijing.

Chen said such services have gained popularity among the younger generation of consumers, and play a vital role in helping online retailers gain new data flow in lower-tier cities and even rural areas.

"As competition in the livestreaming e-commerce sector is heating up, livestreamers will no longer be limited to a certain online marketplace and choose different platforms to increase their exposure and rev up sales," said Jiang Han, a senior researcher at the Beijing-based think tank Pangoal Institution.

Jiang further said that the authorities should formulate and improve relevant laws and regulations to better regulate the sector, ensuring its healthy development, as well as strengthen the supervision and testing of product quality, and protect the legitimate rights and interests of consumers.

He also called for establishing a ranking system for livestreaming e-commerce and giving the assessments of anchors and merchants to improve the transparency and integrity of the sector.

Livestreaming featuring virtual hosts has emerged as a new trend. Global consultancy Forrester said more business-to-consumer brands are using virtual hosts to attract digital-savvy and novelty-seeking young consumers, as they cost less than human talent and reduce risks such as celebrity scandals.