BEIJING — Livestream shopping is taking off in China, driving development of new tech products such as virtual human streamers and mobile data packages.

It’s an attempt to monetize — and innovate — in one of the few bright spots for an economy that’s largely slowing in growth.

Livestreaming e-commerce saw sales surge by 19% during the latest Singles Day shopping festival in November, while sales via traditional e-commerce dropped by 1%, according to McKinsey analysis.

Since the onset of the Covid-19 pandemic in early 2020, retailers in China have rushed to hire or develop in-house livestream hosts to sell products. Individuals, such as online influencer Austin Li, have become celebrities and overnight millionaires through using livestream commerce.

“Livestreaming, particularly livestreaming commerce, is something no country in the world has anything at the scale China has,” said Daniel Zipser, senior partner and leader of McKinsey’s Asia consumer and retail practice.

Now companies are testing out livestreaming hosts that are digitally created humans — either avatars that represent an actual human host, or a virtual human being created from scratch.

That use of virtual livestreaming hosts was a trend that stood out during this year’s Singles Day, said Xiaofeng Wang, principal analyst at Forrester.

“The quality has improved a lot this year, the virtual hosts look more real, at least the ones I’ve seen from Tencent, JD,” she said.

Wang added that using virtual livestreamers is a way for retailers to differentiate themselves from others, as well as reduce the cost of hiring a famous influencer, who might also carry the risk of being involved with celebrity scandals.

Tencent has launched a product that only needs a three-minute video of a user along with 100 spoken sentences to build a virtual avatar.

The company also has a “Zen Video” platform that lets people create simple promotional videos with a virtual human spokesperson.

Some companies are also combining ChatGPT-like artificial intelligence with livestreaming.

Online retail giant JD.com said its Yanxi virtual anchor product — based on the company’s AI model — was used in livestreaming sessions for more than 4,000 brands during Singles Day this year. One virtual streamer broadcast for 28 hours straight, according to JD’s technology arm. 

Baidu, best known for its search engine and Ernie AI chatbot, got into online shopping this Singles Day with the first at-scale use of its virtual human livestreaming product “Huiboxing” on its “Youxuan” e-commerce platform. The company claims virtual humans ran 17,000 streams from Oct. 20 to Nov. 11.

During that time, electronics giant Suning saw virtual human livestreaming contribute more than 3 million yuan ($420,000) in gross merchandise value on a single day, according to Baidu. GMV measures sales over time.

The digital human livestreamers are currently free for merchants to use on Baidu’s e-commerce platform and are based on the large language model behind Ernie bot, said Wu Chenxia, head of Huiboxing, adding the product uses big data to create multiple livestreaming scripts in an instant.

Regulators have their eye on the sector.

OpenAI’s ChatGPT isn’t officially accessible in China. Baidu’s Ernie bot wasn’t available for widespread use until late August when Beijing gave the green light.

Livestreaming success is also dependent on consistent video connection.

Potential buyers are almost always watching on their mobile phones, while sellers may try to livestream from the field where they are growing the produce.

Mobile service operators China Unicom and China Mobile have started to sell data packages geared toward livestreamers in parts of the country.

These packages splice the network so that livestreamers get priority service, similar to how an express lane on a highway may only allow buses to use it to avoid traffic, said Joe Wang of Huawei’s ICT department.

All that is based on having widespread 5G connectivity, which allows livestreamers to broadcast outdoors or simultaneously on multiple platforms, he said.

Looking ahead, 5.5G will theoretically increase download speeds by 10 times compared to 5G, and upload speeds by two to three times, Wang said. He expects 5.5G will reach consumers as early as 2025, while AI’s development is letting businesses quickly turn 2D images into 3D ones.

That means, Wang said, that 3D livestreaming may be a reality in about two years.

In the meantime, even companies such as Quantasing that sell adult education courses have jumped on the bandwagon by hosting livestreaming e-commerce – generating GMV of 13.3 million yuan in August.

CEO Matt Li said Quantasing holds more than 10 livestreaming sessions at once, and uses technology to decide what types of products and resources to dedicate to each one in order to generate the most revenue.

As fast as it’s grown, livestreaming is subject to China’s stringent regulation on content.

Analysts have also pointed out that livestreaming sales are often impulse buys, leading to many product returns.

From Jo Malone London to Chinese education company New Oriental, companies have turned to livestreaming sales as a way to stay connected with consumers in China and get them to spend money.

Importantly, businesses are shifting from using influencers, known as KOLs in China, to in-house livestreamers, McKinsey’s Zipser said.

“It is a clear indication [livestreaming] is not a hype, but it is something that companies are embracing and putting resources behind and the result of that is something that is here to stay,” he said.

Chinese stocks soared Tuesday as Beijing pledged to ramp up measures to bolster China’s sputtering economy.

Hong Kong’s Hang Seng Index surged more than 3%, China’s tech-heavy ChiNext rose 1.8% and the Shanghai Composite Index increased 1.81% on Tuesday morning in Asia.

Chinese property developers Country Garden and Longfor soared 14.3% and 20.7% respectively. Sunac rose 12.5%, China Vanke was up 11.02% and China Overseas Land and Investment grew 11.39%.

A day earlier, Chinese real estate stocks tumbled on renewed debt fears. The Chinese government cracked down on the property sector’s debt levels in August 2020.

The stock rebound comes after China’s top leaders pledged on Monday to ramp up policy support to boost domestic consumption as the post Covid rebound has been slower than expected.

According to official data, China’s gross domestic product in the second quarter increased 6.3% from a year ago, performing worse than the 7.3% economists predicted. This was a 0.8% growth from the first quarter, and was slower than the 2.2% quarter-on-quarter pace recorded in the January to March period.

China’s top leaders met Monday for the much-anticipated Politburo meeting and hinted at moves to “adjust and optimize” property policy in what the leadership called a “torturous” economic recovery.

State news agency Xinhua quoted the 24-member Politburo as saying “the economy is facing new difficulties and challenges.” That’s mainly due to weak domestic demand, operational challenges for companies as well as “a grim and complex external environment,” it said.

“The meeting emphasized that it is necessary to actively expand domestic demand, give full play to the basic role of consumption in driving economic growth, expand consumption by increasing residents’ income,” according to Xinhua.

“It is necessary to boost the consumption of automobiles, electronic products, and home furnishing, and promote the consumption of services such as sports, leisure, and cultural tourism,” said the report.

Hong Kong-listed shares of internet giants rose on Tuesday. Alibaba shares soared 4.7%, while Tencent was up nearly 4%. Meituan and Baidu shares were higher by 5.7% and 6.8% respectively.

In the electric vehicle space, Xpeng soared 11%, Li Auto was up 4.15% and BYD rose 2%.

“This is a reconfirmation that the [Chinese] policymakers have heard the market concern on more support needed for the domestic economy,” said Xiaolin Chen, head of international at KraneShares, on CNBC’s “Street Signs Asia” Tuesday.

“They want to achieve the 5% GDP target of this year. The first job they need to do is to create jobs for the labor force in China,” said Chen.

“I do certainly see some encouraging language released from the statement that removed a lot of the concerns of people having a high focus on real estate market, employment, private investment, and so on. So far, the language has been encouraging.”

SINGAPORE — Shares in Chinese tech firms mostly rose in mixed Asia-Pacific trading on Monday, with oil prices falling more than 3%.

The Hang Seng index in Hong Kong advanced 1.05%.

Shares of Meituan soared 10.89% while Tencent climbed 2.86%, as of the final hour of trading in Hong Kong on Monday.

Meituan on Friday posted better-than-expected revenue for the last three months of 2021. The company’s revenue for the fourth quarter came in at 49.52 billion yuan ($7.78 billion), above mean analyst expectations for a 49.2 billion yuan print, according to data from Refinitiv Eikon.

The Hang Seng Tech index remained in positive territory, rising 2.13%. Some Chinese tech stocks, however, slipped: Baidu edged 0.63% lower while JD.com dropped 3.06%.

“Even if you look now, where we see very significant and sharp falls so that valuations now are at much more reasonable levels, I think it’s still quite difficult for investors … to really build the courage to go back in at these levels,” Mark Konyn, group chief investment officer at AIA, told CNBC’s “Squawk Box Asia” on Monday.

The broader Asia-Pacific markets struggled for direction on Monday.

Mainland China’s Shanghai composite gained 0.07% to close at 3,214.50 while the Shenzhen component shed 1.017% to 11,949.94.

In Australia, the S&P/ASX 200 closed fractionally higher at 7,412.40. Singapore’s Straits Times index also climbed 0.38% in afternoon trade.

MSCI’s broadest index of Asia-Pacific outside Japan traded 0.11% lower.

Oil prices declined in the afternoon of Asia trading hours, with international benchmark Brent crude futures down 3.52% to $116.40 per barrel. U.S. crude futures slipped 3.97% to $109.38 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.2 following a recent climb from below 98.7.

The Japanese yen traded at 123.61 per dollar, weaker than levels below 120 seen against the greenback last week. The Australian dollar was at $0.7512, having risen from below $0.74 last week.

Correction: This article was updated to accurately reflect the moves of the Japanese yen during Asia trading hours on Monday.