Virtual influencers are shaking up China’s online retail
Brands seek to mitigate the footfall in their brick and mortar stores through live-stream shopping, which has exploded.
In recent years, we’ve seen virtual characters take on increasingly independent and creative roles. Gone are the days of video games and anime shows; these digital beings have taken up a plethora of different roles such as pop idols with an endless supply of original songs, runway models with full, vivid backstories and even AI-powered brand mascots who’s better even than Li Jiaqi and Kardashian at making the sale.
Since the onset of the Covid-19 pandemic, this trend of virtual idols has moved into the fast lane in China. Brands seek to mitigate the footfall in their brick and mortar stores through live-stream shopping — whereby well-known personalities and mere mortals alike demo, recommend and offer discounts on products in real-time over the internet — which has exploded.
We’re clearly entering a brave new world, but how did we get here, what’s the appeal, and what are the challenges and opportunities for brands?
According to official figures, there were more than 10 million e-commerce live-streaming events in China in the first half of 2020, with 560 million people tuning in, an increase of 126 million year on year.
But while some of the country’s top live-streaming influencers (KOL) are indeed raking it in, one virtual gift at a time, they are now facing fresh competition from a new breed of brand advocates who promises to be on time, blemish-free and full of beans, 24/7, 365. Enter virtual live-streamers…
The rise of the virtual influencer (KOL)
Luo Tianyi is China’s best known and most profitable virtual idol. The grey-haired anime-style tween made her debut at the height of the pandemic alongside real-life KOL Li Jiaqi, AKA, “the Lipstick King”.
After the unlikely duo’s appearance for Taobao’s “Cloud ACG Carnival” in May hooked in almost 3 million viewers, China’s biggest shopping site doubled down a month later, employing VR royalty in the form of Japan’s Hatsune Miku for another live stream, attracting over 10 million virtual gifts and page views.
Prada is among the first Western brands to embrace this trend in China, teaming up with Alibaba (via T-Mall) and Aimee, T-Mall’s virtual model. The slender, porcelain-skinned influencer glamorously shows off pieces from the brand’s 2020 Spring-Summer collection.
The start-up scene is also abuzz with activity in China. Shanghai-based, artificial intelligence mini-corn (that’s budding-unicorn in laymen’s speak) Xmov and media company, Beijing Cishi, introduced China’s first artificial intelligence influencer, Ling, back in May 2020.
Using proprietary full-stack end-to-end AI technology, Ling’s facial expressions, body and finger movements can all be rendered in an extremely life-like manner through something CEO Chai Jinxiang calls “intelligent characterization through modeling and AI performance animation“, a far-cry from the often robotic mobility issues characteristic of Luo Tianyi and other “anime-style” virtual idols.
Aside from developing its leading lady, Xmov provides it’s motion-capture rendering services to commercial clients such as brands and agencies. In a live-streaming situation, Xmov renders the character in real time, which means they can interact with consumers in a much more enriching and visually satisfying way, thereby engaging the audience even deeper.
The company just completed an undisclosed (upwards of a hundred million RMB) series A round of funding on June 25th from investors including Sequoia. Hurrah, we’re rootin’ for ya!
Not surprisingly, it’s young Asian consumers who are particularly seduced by virtual sellers. The economy of idols is massive among Gen Z, roughly defined as people born between the mid 1990s and early 2010. According to QuestMobile, a Beijing-Based market research company, around 390 million Chinese are following or know about virtual idols, with $5.65 billion spent on them in 2018.
This tech-savy demographic find themselves attracted like shallow moths to a beautiful flame to these flawless and ageless idols.
According to Miro Li, founder of Chinese consulting company Double V, female virtual idols are best at selling electronics and gaming paraphernalia to Gen Z guys, while male characters are best at selling beauty, food and fashion products to women. In a country where male celebrities are sometimes used to sell feminine hygiene products, this somehow makes perfect sense.
What of the West?
The West is also grabbing virtual idols by their neon pigtails in quite a similar way. Instead of live-streaming, they’re taking more to the likes of Instagram and TikTok (while it lasts). Noonoouri from Joerg Zuber of creative agency Opium Effect is the quintessential case study.
As per her bio on Virtual Humans, a kind of [unsolicited] agency for virtual influencers of sorts, “Noonoouri has worked with most of the top brands in the fashion industry and continues to wow consumers with her unique look. She balances her platform between social good and promotion. She’s vegan, advocates for sustainable fashion, and refuses to wear furs while making countless cameos with fashion brands all around the world.”
Noonoouri is officially represented by IMG Models.
While Noonoouri, with her big smoky eyes and slender, exaggerated frame alludes to a modern-day rendition of a Betty Boop and Jessica Rabbit love child, an aspect that’s still of upmost importance for most Western audiences is having a life-like appearance, according to Diederik van Middlekoop of sonic branding company Amp.Amsterdam. He says that even though the West loves interacting with tech and AI, the experience must still be anchored in reality for these unimaginative audiences.
What’s the catch?
The advantages of virtual live streamers are clear. Gone are the days when you have to worry about your brand ambassador Tweeting something that makes the CMO facepalm so hard it can be considered self-slapping. They’re unbound by union rules (well, for now… we’ve got our eyes on you SAG!), time and geography. They offer something exciting and appealing to the latest generation to enter the “consumer” tranche.
“Virtual live streamers allow audiences to build a relationship with the character through interaction,” says Ty Curtis of FIN Design and Effects, a post house that’s been conducting extensive research into virtual idols for clients. “It’s not just a passive experience like watching an ad. It provides much deeper engagement through interactivity.”
But these virtual show ponies definitely do not come cheap, costing brands upwards of seven digits to create a truly unique, functional and proprietary character, and that’s separate from the cost to operate them! A one hour live-broadcast usually runs from the hundreds of thousands of dollars, depending on whether real KOLs are brought in for support.
As of today, voice remains the single biggest challenge to this budding realm. Without a voice that is natural to the ears, virtual influencers are still bound to working with a human counterpart. They’re also less able to connect emotionally than their flesh and bones rivals. Think about it, to this day, not even Apple has been able to crack that nut. Siri sounds nice, but she’s leaps and bounds away from giving Billie Holiday a run for her money.
“Even when you use a real person for the voice, it’s going to sound somewhat robotic because you can’t really convey emotion,” explains van Middlekoop, who’s spent the last two months recording himself saying the world’s most complicated sentences for a voice-first character his company is soon to launch. “This is why a robot voice, even if it comes from a real sample, has some robotic characteristics that can make people feel uncomfortable.”
A look towards the future
In this day and age, the relationship between humans and technology is set to intertwine even more in the coming decades, making it all the more important that brands invest into their virtual DNA, now. “I see [virtual live streamers] as the progression towards the assimilation between digital and physical,” says Curtis. “The more work we do in this field, the better the quality will get until we can’t tell the difference between what’s real and what’s not.”
It’s clear that virtual live-streamers have yet to reach their peak. According to Shanghai-based iResearch, China’s live-stream shopping market was worth $66 billion in 2019, and could more than double this year. As far as online retail goes, virtual idols are likely to play a bigger role. “Virtual and interactive entertainment is a hot trend nowadays,” a spokesperson for Taobao Live told the SCMP. “We are dedicated to introducing various pan-entertainment virtual hosts to enrich our content and innovate in user interactions.” Alibaba-owned Lazada in Southeast Asia and Amazon are also rolling out video streaming platforms. Surely, it’s only a matter of time before the whole world gets onboard.
by Crystal Reid