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  • Writer's pictureLeaf Digital

Embracing the Chinese AI Revolution in Marketing

Updated: Feb 20

Today, the significance of artificial intelligence (AI) is impossible to ignore. Historically, USA has taken the lead in the AI market, boasting innovations such as OpenAI's ChatGPT. However, China's journey in AI development has been marked by unique challenges and distinct opportunities. One major challenge stem from the fact that only 1.5% of the world's websites are in Chinese, in contrast to the dominant 56% in English. This linguistic discrepancy presents a significant hurdle in terms of data availability for AI models. Moreover, China's online landscape is subject to rigorous censorship, which further complicates the progress of AI tool innovation within the nation.

Robot hand pointing at light

AI technologies in China

Despite these challenges, Chinese President Xi Jinping has a vision that emphasizes a joint effort towards "hard" technologies, including industrial AI applications. This strategic shift is aimed at reducing China's reliance on Western technology and igniting groundbreaking developments in AI.

As a result, the Chinese AI technologies is poised for rapid evolution in the coming years. Currently valued at 14,75 billion USD, China's AI market has the potential to more than double within the next two years. Beijing's ambitious goal is to surpass the United States and become the world leader in the AI sector by the year 2030. This aspiration signifies a profound transformation that is bound to reshape not only the Chinese AI landscape but also the global AI arena.

baidu ernie bot logo

Baidu’s Ernie Bot (文心一言)

An example on Chinese efforts to challenge USA’s leading position is Baidu's Ernie Bot, which has been in the works since 2019 and was officially launched in March 2023. Ernie Bot faces several challenges on its path to rivalling ChatGPT. While it is based on the AI-driven deep learning model, Ernie (short for "Enhanced Representation through Knowledge Integration"), it notably shies away from addressing harmful or politically sensitive topics, marking a limitation. It also lags slightly behind in performance, with a higher rate of errors and a reduced understanding of complex questions. On the upside, Ernie Bot possesses image-making capabilities, distinguishing it from ChatGPT.

How can foreign brands utilize AI in marketing?

Foreign brands seeking to expand their market presence in China must recognize the transformative power of the Chinese AI revolution in marketing. China's vast internet consumer base and the ability to engage with consumers in innovative ways have led to the widespread adoption of AI applications in consumer-facing industries. These applications are revolutionizing brand marketing, influencing purchasing decisions, and creating new and exciting consumer experiences. One example of this AI-driven transformation is the online retailer's introduction of ChatJD in February. This innovative tool provides shoppers with personalized product recommendations and equips sellers with automated smart pricing and advertising solutions. By leveraging AI, has not only enhanced the customer experience but also optimized its operations.

The Role of AR and VR in Brand Marketing

Augmented reality (AR) and virtual reality (VR) technologies are emerging as powerful tools for brands. These platforms not only offer novelty but also create immersive experiences that go beyond traditional shopping. A particularly effective strategy is the gamification of content, which transforms standard brand interactions into interactive experiences. When combined with the capabilities of AI, this approach not only cultivates a unique brand experience but also fosters a sense of community among consumers. This strategy resonates particularly well with the digitally savvy younger generation, driving increased engagement and potential business growth.

Chinese man with VR glasses waving around with his arms

The rapid growth of AI and the broad adoption of AR and VR technologies are poised to significantly influence branding and marketing. Personalized and targeted advertising, as well as tailored content, are set to play an increasingly pivotal role in the industry. From AI chatbots to AI-generated voices and automated marketing tools, the efficiency and effectiveness of these innovative solutions are predicted to skyrocket. To remain competitive and maintain market share, businesses must fully embrace this evolving trend and harness the power of AI and emerging technologies to captivate their target audiences.

The rise of AI influencers

One of the new developments in the Chinese digital realm is the emergence of AI influencers, often referred to as "synthfluencers." These digital idols present a more manageable and, for some, a safer alternative for brands compared to traditional human influencers. This shift comes in response to risks and unpredictability associated with human brand ambassadors, such as in 2021, when prominent brands severed ties with Kris Wu due to rape and sexual assault sentences.

In May 2021, China introduced one of its first virtual influencers, Ayayi. Ayayi has an impressive follower base, with over 817,000 fans on Weibo and 127,000 on Xiaohongshu. Her success has led to collaborations with renowned fashion houses. Thanks to these high-profile affiliations, Ayayi has become one of China's most popular KOL’s, not only among virtual influencers, but also among traditional idols.

Virtual influencers provide brands with unprecedented control over their image and how they wish to be perceived. They offer the freedom to curate the aesthetics that best align with their brand identity. Furthermore, the absence of geographical and physical limitations makes these digital influencers even more appealing for brand partnerships.

The emergence of virtual influencers reflects shifting consumer behaviors, particularly among China's youth. Gen Z prioritizes online goods over physical ones, indicating a growing emphasis on the virtual world. This isn't confined to purchasing digital products but extends to the realm of virtual idols. Virtual influencers, remarkably, exhibit higher engagement rates than their human counterparts, making them an increasingly effective marketing choice. In fact, they yield three times more engagement, underscoring their potential for lucrative opportunities in various areas, including sales and promotions.

Choosing a virtual influencer requires a degree of deliberation just like selecting a real one. Brands must consider the alignment of the virtual influencer with their label's DNA and image. They must also know the type of content that resonates best with their followers and select platforms that are most conducive to promoting their products. The rise of AI influencers in China marks a remarkable transition in brand promotion, offering both creative and strategic opportunities in an ever-evolving digital landscape.

AI for Live Streaming: AI-powered virtual hosts

In line with AI influencers, the utilization of AI-driven virtual hosts in the world of live streaming has become a game-changer in China's e-commerce market. One of the most compelling benefits of employing virtual hosts is the significant cost reduction. Instead of paying a human host for each live stream, businesses only need to make a one-time investment in AI technology. This results in substantially lower operating costs.

The advantages of using virtual hosts:

  • Cost Efficiency: Hiring a virtual host costs approximately 20,000RMB annually, making it a cost-effective choice when compared to human streamers. If a brand conducts four hours of daily streaming, the cost of employing a human streamer would amount to around 200RMB per hour, totaling about 24,000RMB a month, which already exceeds the yearly cost of a digital streamer.

  • Continuous Availability: AI hosts work tirelessly without needing breaks, providing businesses with the ability to achieve more in less time. Their round-the-clock availability ensures a seamless and dependable experience for shoppers, which is not always the case with human streamers who may have off days or require rest.

Platforms like Yanxi, a Chinese artificial intelligence platform, enable users to create digital avatars for live streaming purposes. AI facilitates the setup of a virtual streaming studio and even prepares the sales pitch. Users simply need to choose a virtual host and a promotional product. A digital avatar is created using data, obtained from short, high-quality footage of a real person performing designated body movements for 5 to 10 minutes.

However, the rise of AI hosts also brings forth ethical issues that brands must consider. While AI hosts offer numerous advantages, they also replace real human workers, a matter of significance in a Chinese society that already struggles with high unemployment rates, particularly among the youth. Balancing the efficiency of AI hosts with the ethical implications they carry is a critical aspect for brands to contemplate as they navigate this evolving landscape.

The Future of AI in Marketing

The rapid advancement of AI, combined with the widespread adoption of augmented reality (AR) and virtual reality (VR) technologies, is fundamentally reshaping the marketing landscape. AI is no longer a distant concept but a powerful tool that businesses must embrace to thrive in the evolving market. From AI chatbots, AI-generated voices and automated AI marketing tools to AI influencers and virtual hosts, these innovative solutions are expected to become much more efficient and effective.

In this dynamic environment, companies must proactively integrate AI into their marketing strategies to engage with their target audience effectively, maintain market share, and stay competitive. Innovation and AI go hand in hand, offering a transformative future for businesses willing to adapt and explore the possibilities of AI-powered marketing.

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