The Future of Livestreaming: Why AI Avatars Are Outperforming Humans—and What This Means for Investors
In a groundbreaking shift that’s reshaping the e-commerce and livestreaming landscape, AI-generated avatars are not just competing with human hosts—they’re outselling them. This was vividly demonstrated on June 15, 2025, when Chinese livestreaming pioneer Luo Yonghao and his co-host Xiao Mu took to Baidu’s Youxuan platform, leveraging digital avatars crafted from Baidu’s advanced generative AI model. The result? A staggering 55 million yuan ($7.65 million) in sales over six hours—surpassing Luo’s previous human-hosted livestream by a wide margin.
Why does this matter? Because it signals a seismic shift in how consumer engagement and sales conversions are achieved in the digital age—and savvy investors need to pay close attention.
AI Avatars: The New Sales Powerhouses
Luo Yonghao’s avatars were trained on five years of his video content, enabling them to mimic his unique style and humor in real time. This isn’t just a gimmick; it’s a sophisticated blend of machine learning and behavioral analytics that creates a highly personalized shopping experience. Wu Jialu, head of research at Luo’s company Be Friends Holding, calls this a “DeepSeek moment” for China’s livestreaming and digital human industry. DeepSeek, China’s answer to OpenAI, has been disrupting global AI markets with cost-effective, open-source models that rival ChatGPT.
From an investor’s perspective, AI avatars drastically reduce operational costs. No more large production teams, expensive studios, or breaks—these digital humans can stream 24/7, scaling sales efforts exponentially. This efficiency is a game-changer for e-commerce platforms and brands looking to maximize ROI on marketing spend.
The Livestreaming Boom: China’s Digital Marketplace Evolution
Livestream shopping in China exploded during the pandemic as traditional retail channels faltered. Platforms like Douyin (TikTok’s Chinese counterpart) have become dominant e-commerce players, with livestream sales surpassing those of JD.com, China’s second-largest e-commerce company, according to a recent report by Worldpanel and Bain & Company. This trend has eaten into Alibaba’s market share, signaling a broader shift toward interactive, real-time commerce.
Tencent and other tech giants are also in the race, developing AI-driven digital anchors and virtual human livestreamers. The Singles Day shopping holiday in late 2023 saw several companies testing these virtual hosts, underscoring the rapid adoption of this technology.
Challenges and Regulatory Hurdles
Despite the technological advances, hurdles remain. Livestreamed products often face high return rates due to impulse buying, which can impact profitability. More critically, regulatory compliance is becoming a major challenge. Platforms like Douyin have introduced restrictions on AI avatars, especially if they fail to engage authentically with viewers or violate advertising standards.
For investors and advisors, this means due diligence is more important than ever. Companies that can navigate regulatory landscapes while innovating with AI will emerge as winners. The ability to train digital humans to comply with advertising laws and platform-specific rules will be a key competitive advantage.
What Should Investors Do Now?
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Identify Leaders in AI Livestreaming Tech: Companies like Baidu and DeepSeek are at the forefront of generative AI for digital humans. Monitoring their partnerships and platform integrations can reveal early investment opportunities.
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Watch for Cross-Border Expansion: Wu Jialu hints at future multilingual livestreams, opening vast new markets beyond China. Investors should look for firms with global ambitions and scalable AI solutions.
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Evaluate Platform Policies: As regulations tighten, platforms that enforce strict compliance may weed out less reliable players, creating a more stable investment environment for compliant companies.
- Consider Consumer Behavior Trends: With impulse buying driving high return rates, companies innovating in personalized recommendations and post-sale customer service will likely sustain growth better.
What’s Next?
The AI avatar revolution in livestreaming is just beginning. Expect to see:
- Increased AI-human hybrid models: Where avatars handle routine interactions and humans step in for complex engagement.
- Enhanced personalization: Using AI to tailor product pitches based on real-time viewer data.
- Expansion into new sectors: Beyond consumer electronics and food, industries like fashion, beauty, and even luxury goods will adopt AI livestreaming.
A recent McKinsey report projects that AI-driven personalization could boost e-commerce revenues by up to 15% globally over the next five years. This aligns perfectly with the rise of digital avatars, which offer scalable, personalized, and cost-effective sales channels.
Final Takeaway
For investors and financial advisors, the rise of AI avatars in livestreaming is a clarion call to rethink digital commerce strategies. The companies that harness this technology effectively while navigating regulatory complexities will not only capture market share but redefine consumer engagement. At Extreme Investor Network, we see this as a pivotal moment—one where AI-driven digital humans transform e-commerce from a cost center into a profit powerhouse.
Stay ahead of the curve by tracking AI innovation in livestreaming, understanding platform dynamics, and anticipating global expansion. The future of retail is not just digital—it’s digitally human.
Source: AI avatars in China just proved they are better influencers